If your agency undergoes a major reorganization, reduction in force, or transfer of function, and a significant percentage of the employees will be separated, or will be reduced in pay, the head of your agency can ask the U.S. Office of Personnel Management (OPM) to permit early optional retirement for eligible employees. If your agency gets approval to permit early optional retirements, eligible employees will be notified of the opportunity to retire voluntarily.

Discontinued Service Retirement Because of an Involuntary Separation

The term “involuntary separation” means any separation against the will and without the consent of the employee, other than “for cause” for misconduct or delinquency. The most common cause of an involuntary separation is a reduction in force. Another frequent cause for an involuntary separation is when the location of an office or unit is moved to an area outside the commuting area of the old worksite*. Employees who decline reasonable offers of other positions are not eligible for discontinued service annuities.

If your agency

• makes you a reasonable offer and you choose to decline the offer and resign, you will not qualify for discontinued service retirement, or
• separates you by adverse action procedures for not complying with a directed reassignment to a position that is a “reasonable offer”

your separation would not be qualifying for discontinued service.

Reasonable Offer

• Written offer of another position in your agency and commuting area for which you are qualified, and
• Which is no more than two grades or pay levels below your current grade or pay level.

Commuting Area

Geographic area that usually constitutes one area for employment purposes. It includes any population center (or two or more neighboring ones) and the surrounding localities in which people live and reasonably can be expected to travel back and forth daily in their usual employment.

Eligibility Requirements for Early Optional Retirement and Discontinued Service Retirement Because of an Involuntary Separation

Annuity Computation

Here is how the basic FERS annuity formula is calculated:

FERS Basic Annuity Formula

Reductions in Annuity

In addition to the regular reductions for survivor benefits, unpaid service and refunded service, your annuity would be subject to the following age reduction:

• If you retire under the MRA+10 provision
  • If you have 10 or more years of service and retire at the Minimum Retirement Age (MRA), your benefit will be reduced by 5/12 of 1% for each full month (5% per year) that you were under age 62 on the date your annuity began. However, your annuity will not be reduced if you complete at least 30 years of service, or if you complete at least 20 years of service and your annuity begins when you reach age 60.
  • If you postpone the beginning date of your annuity, the age reduction will be reduced or eliminated.
  • The age reduction applies to both the Civil Service Retirement System and the Federal Employees Retirement System components of your annuity, if you transferred to FERS and part of your annuity is computed under the CSRS provision.
• If you retire under the discontinued service or early optional retirement provision with a CSRS Component
  • If you retire on a discontinued service retirement or early optional retirement because your agency was undergoing a major reorganization, reduction-in-force or transfer of function, and part of your benefit was computed under CSRS rules, the CSRS portion will be reduced if you are under age 55. The reduction is 1/6 of 1% (2% per year) for every month that you are under age 55 at the time of retirement.