Can You Lose Federal Retirement If You Are Fired?

Attorney Justin Schnitzer

Written by: Attorney Justin Schnitzer

Experts In This Article

If you’re at risk of losing your federal job or have already been fired, you might be concerned about your retirement benefits. What happens to them?

This is a serious concern, as the loss of your retirement benefits can substantially impact your financial security after retirement.

This guide will answer all the questions you might have about getting fired from federal employment and your retirement benefits. It’ll help you understand your options and take appropriate steps to safeguard your financial security in retirement.

Can You Lose Your Federal Retirement Benefits If You Are Fired?

Generally speaking, your retirement benefits should be safe. For most federal employees, retirement benefits cannot be ended due to basic disciplinary proceedings or if you are fired. This is assuming your retirement is already vested.

But there are limited exceptions to this rule.

In the case, Morrison v. Department of the Navy, the Merit Systems Protection Board (MSPB) noted that retirement benefits earned over the course of a federal career “are generally available upon separation from federal service, even when the separation is agency initiated.”

So, if you have at least five years of service, you likely won’t lose your retirement benefits if you are fired for the following reasons:

  • Poor performance
  • Gift violations
  • Questionable moral judgment
  • Engaging in political activity when on duty
  • Not reporting conflicts of interest
  • Abusing your position
  • Padding a job for when you retire
  • Credit card abuse

If you face termination from federal employment and are concerned about the potential loss of retirement benefits, the experienced federal employment lawyers at The Law Office of Justin Schnitzer can help you.

We can help you understand your rights and the intricacies of federal retirement benefits and work to ensure your retirement benefits are fully protected.

Contact us today or call 202-964-4878 to schedule a free consultation.

can i lose my federal retirement if fired
Generally speaking, your retirement benefits should be safe.

How can federal employees lose their retirement benefits if fired?

The exceptions to the safety of federal employees’ retirement benefits involve criminal activity.

Under 5 U.S.C. § 8312, you can lose your retirement benefits if you are convicted of a federal crime against the country’s national security. These crimes include:

  • Harboring or concealing persons
  • Espionage
  • Giving defense information to aid a foreign government
  • Rebellion
  • Treason
  • False testimony before a federal court
  • Enlistment to serve against the U.S.

You can check 5 U.S.C. § 8312 for the other numerous crimes that can lead to the loss of your retirement. Related statutory sections cover additional crimes that would make a federal employee ineligible for benefits. The additional crimes include:

  • Fleeing the country to avoid prosecution
  • Refusing to testify about involvement with a foreign government or other interference with national security
  • Providing false information on an employment application about your previous association with groups advocating for overthrowing the government

You don’t have to worry about losing your retirement benefits if you haven’t committed any of these crimes against U.S. national security.

Can federal employees with voluntary early retirement lose their retirement benefits if fired?

The Voluntary Early Retirement Authority (VERA) allows government agencies to temporarily reduce the minimum age and service requirements for retirement benefits.

They may offer additional retirement incentives like monetary bonuses to make an involuntary offer to leave (due to restructuring, downsizing, and other organizational changes) feel a bit more voluntary.

If you’re fired for misconduct, poor performance, or delinquency, you are not eligible for a VERA or a Voluntary Separation Incentive Payments (VSIP). That means you cannot take advantage of these discontinued service annuities, but you may be eligible for a deferred benefit once you qualify.

How can federal employees appeal reduction or loss of retirement benefits?

If you want to challenge the reduction or loss of retirement benefits after being fired, you can appeal the decision. Here are some avenues for appealing:

  • Internal agency: You can initiate an appeal with your federal agency to challenge the decision, typically through your HR department.
  • Merit Systems Protection Board (MSPB): You can appeal adverse personnel actions related to your retirement benefits to the MSPB. It reviews federal employment actions to ensure compliance with the law.
  • Office of Personnel Management (OPM): Appeal the determination of the retirement benefits by the OPM directly to the OPM. It oversees federal retirement programs and can review and even reconsider your benefit reduction or loss.
  • Federal court: You can pursue legal action through federal courts to seek remedies for unjust reduction or loss of retirement benefits.

Consult an experienced federal employment attorney to understand your rights, legal options, and the best course of action.

How can federal employees access their retirement benefits after being fired?

It depends on whether you are eligible for retirement at the time of the removal from federal service.

If you’re not eligible for retirement, you have two options to access your retirement benefits:

  • Initiate a Discontinued Service Retirement (DSR) application, which provides immediate, likely reduced annuity for fired federal employees ineligible for retirement.
  • If you have at least five years of creditable service, you can wait until you’re eligible for retirement to apply for the monthly benefit payments. This is referred to as deferred retirement.

If you were eligible for retirement at the time of separation, you can initiate the retirement process immediately.

If you have been fired for 30 days or less, you can contact your agency to initiate your retirement, but if it has been more than 30 days, you must contact the Office of Personnel Management (OPM) to initiate a retirement application.

Is it better to resign or be fired from federal employment?

Both options have their ups and downs. Resigning from federal employment helps maintain a clean employment record, important for future job prospects. However, being fired could qualify you for unemployment benefits and severance, offering financial support during job transitions.

Whether to resign or be fired from a federal unemployment will depend on your specific circumstances like financial stability, job prospects, and the reasons for leaving your federal job. You should consult with a federal employment lawyer before resigning to understand the outcomes of each option.

Many federal employees about to be fired consider retiring under the impression that it will save the benefits they would lose if fired. But, as debunked above, you’ll remain entitled to your vested retirement benefits if you didn’t commit any of the crimes mentioned.

Let’s dive into this further.

Potential Benefits of Resigning

Resigning from federal employment can maintain the integrity of your employment record. This is important for future job prospects, as most prospective employers ask about previous work experiences. Resigning also gives you control over when you leave, so you can plan and transition into new opportunities smoothly.

However, resigning has some downsides. For instance, you can miss out on benefits like unemployment and severance packages if you resign without a cause. It can also harm any case you file to appeal your removal.

Potential Benefits of Termination

Being fired from federal employment will damage your employment record and may limit future job opportunities. It can also strain your professional relationships.

However, termination makes you eligible for unemployment benefits, which can provide a financial safety net as you search for another job. Some employers can offer severance packages, providing further financial assistance as you transition.

You can challenge your termination through an MSPB appeal.

For Example…

For example, imagine John was a federal employee facing a challenging workplace environment and an investigation for alleged misconduct. Considering resignation to escape the stress, John first decided to consult with a federal employment lawyer, who provided important insights:

  • Legal Options and Rights: John learned about his rights and the legal options available, including defending against the allegations.
  • Retirement and Benefits Impact: The lawyer explained how resigning could affect John’s retirement benefits, which were significant as John was nearing retirement age.
  • Strategic Negotiation: The attorney discussed potential strategies for negotiating a favorable exit that could protect John’s interests, or even clearing his name if he chose to fight the allegations.

Armed with this knowledge, John chose to engage in negotiations with his agency, supported by his lawyer. This strategic decision would allow him to either clear his name or leave his position under far better conditions than simply resigning.

This is just an example of how consulting with a federal employment attorney could help you make an informed decision to safeguard your professional reputation and financial future. Before you decide between resigning or facing termination, consult with a lawyer to discuss your specific circumstances and understand legal options.

Can a fired federal employee be rehired?

Yes, a fired or resigned federal employee can be rehired in another government department or agency.

To be rehired, you must write to OPM to inquire about your eligibility for reemployment. OPM shall investigate the circumstances that led to your resignation or termination to determine your eligibility for reinstatement.

If it deems you eligible for reemployment, you can seek employment in another department or agency of the federal government. You can start searching for a job and applying for positions by submitting an application through USAJOBS.

Just because you worked for the government doesn’t mean you can cut corners. You must meet the qualifications and requirements of the jobs you apply for.

Do you need a federal employment lawyer after being fired?

Do not resign from your federal job before consulting with a federal employment lawyer, even if you’re sure you will be fired. It’ll weaken your chances of appealing your employer’s actions later, so you need an attorney to assess your circumstances and determine whether it is the best course of action.

If you have already been terminated from your federal job, whether you need a federal employment lawyer depends on various factors. You need one if:

  • You believe your termination was wrongful, discriminatory, or in violation of your rights
  • You are unfamiliar with federal employment laws, regulations, and your rights as a federal employee
  • You plan to appeal the termination
  • You have concerns about your retirement benefits
  • You suspect your termination was due to discrimination, retaliation, or a violation of employment laws
  • The complexities of federal employment regulations seem overwhelming

The attorney can review the circumstances surrounding your termination and advise you on your rights, potential legal claims, and best courses of action. If you decide to appeal the termination, they can guide you through the appeals process and help you compile the necessary documentation to build a strong case.

Federal employment attorneys can also negotiate with your employer to secure a fair settlement and severance package and represent you in legal proceedings.

Working with an attorney before your resignation and after your termination can increase your chances of achieving a favorable resolution.

We Serve Federal Employees Nationwide

If you are a federal employee and your rights are being violated, we want to help you.

Schedule a Consultation

or, give us a ring at (202) 964-4878.

Attorney Justin Schnitzer

An attorney can help you protect your retirement

If you have been fired from federal employment, you won’t lose your retirement benefits if you haven’t committed any crime against the United States national security. You can recover your benefits immediately or, if you aren’t eligible for retirement, wait until you are to initiate the retirement process.

Working with an attorney can be instrumental in understanding your rights, navigating legal complexities, and determining potential avenues for recourse. They can help you assess the impact on your retirement benefits, seek reinstatement, negotiate a severance package, and explore legal action for federal employee wrongful termination.

The federal employment lawyers at The Law Office of Justin Schnitzer are dedicated to providing personalized, high-quality legal representation to federal employees nationwide. Contact us today or call 202-964-4878 to schedule your free consultation and learn more about how we can help you achieve your legal goals.

Attorney Justin Schnitzer

Meet the Author:
Attorney Justin Schnitzer

Justin Schnitzer is the managing partner of The Law Office of Justin Schnitzer, and represents individual federal employees and unions in various aspects of federal employment law. His practice is primarily dedicated to federal EEOC and MSPB matters, responses to proposed disciplinary actions and investigations into potential misconduct.