How do RIFS (Reductions in Force) affect my FERS Benefits?

Will VERA and RIFs Reduce FERS Benefits?

While VERA and RIF protect your earned FERS benefits, the outcome of those benefits can differ significantly. 

Here’s how each program might affect your benefits:

1. Annuity Payments

   • For VERA recipients, your highest three consecutive years of salary (“high-3 average”) and your years of service will help determine your annuity. However, since federal employees choosing VERA retire earlier, their years of service won’t accumulate past their early retirement date. This typically results in smaller monthly payments compared to retiring at your full retirement age.

   • For RIFs, while your annuity payments remain intact, you might face a reassignment, furlough, or outright separation. This could interrupt the natural progression of pension growth, creating inconsistencies in your long-term financial outlook.

   • For Federal Disability Retirement, your annuity calculation includes your service at the time of retirement plus potential service up to age 60. This projection can result in a higher annuity payment at age 62 compared to VERA or RIF scenarios, which freeze service years at the time of separation.

2. Health and Insurance Benefits

   • Should you qualify for VERA, your federal health and life insurance plans (FEHB and FEGLI) remain in place during retirement as long as you meet eligibility requirements.

   • Employees separated by RIFs who do not meet eligibility status for these benefits may lose group health coverage entirely unless they elect Temporary Continuation of Coverage (TCC). This option often involves added costs and administrative efforts.

   • Under Federal Disability Retirement, you maintain your health and life insurance benefits seamlessly, which provides peace of mind and eliminates the hassle of securing temporary coverage.

3. Eligibility Protection

   • Neither VERA nor RIFs alter the process or eligibility criteria for applying for Federal Disability Retirement. If you already struggle to perform your job due to injury or chronic illness, Disability Retirement serves as a secure safety net that’s unaffected by budget cuts or agency restructuring.

For more information on RIFS click here: Reductions in Force (RIF)

See this article on Fedweek: Agency RIFs, Reorganizations Starting to Take Shape