Reemployed Annuitants

Retired DOD employees who return to Federal civilian service are considered reemployed annuitants if their annuity continues during reemployment. However, they are subject to different rules that affect their retirement and benefits. Under Section 1101 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2004 (November 24, 2003), reemployed annuitants rehired by DOD are not considered employees for purposes of title 5 U.S.C., Chapters 83 (Civil Service Retirement System (CSRS)) or 84 (Federal Employees Retirement System (FERS)).

The NDAA FY 2008 amendment addressed the unintended consequences of NDAA FY 2004 for Discontinued Service Retirement (DSR) annuitants who were subject to a reduction in their annuity, yet could not earn credit for their reemployment service with DOD. This amendment resulted in two categories of DOD reemployed annuitants: DSR and non-DSR. The NDAA provisions are summarized below.

REHIRED BY DOD BEFORE NOVEMBER 24, 2003

Under FERS, with few exceptions, once retired and reemployed their annuity will continue with salary offset by the amount of their annuity. Under CSRS, the annuity continues with salary offset by the amount of the annuity for reemployed annuitants who retire on the following: discontinued service retirement (DSR) if reemployed on a temporary or term appointment, unreduced optional retirement, or a voluntary early retirement (VERA). In some cases, reemployment may cause the annuity to stop and the employee is no longer considered an annuitant.

REHIRED BY DOD AFTER NOVEMBER 23, 2003

Reemployed annuitants now include CSRS annuitants who retired under DSR provisions and rehired on a permanent appointment. National Guard Technicians who retired under a special disability due to loss of military membership (because of disability) are included as well. In addition, the NDAA for FY 2004 provides that: all reemployed annuitants must meet certain criteria to be hired within DOD, all appointment types are covered by social security only, there is no retirement contribution election opportunity, reemployment will not increase retirement or death benefits, salary is not offset, and reemployed annuitants are not eligible to participate in TSP.

NDAA FY 2008 Amendment (dated January 28, 2008): Under NDAA FY 2004, DSR annuitants were not able to earn retirement credit for their reemployment service with DOD. This adversely affected DSR annuitants subject to a reduction in their annuity because they did not meet age and service requirements for an immediate annuity at separation. To remedy this unintended consequence, provisions were amended under NDAA FY 2008 to allow DSR reemployed annuitants the opportunity to elect to make retirement contributions to earn further retirement credit in lieu of receiving full salary and annuity. Elections are irrevocable and prospective.

Review the resources below for details on exceptions and Reemployed Annuitants’ eligibility for benefits.