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The Misconception Surrounding Termination and Retirement Benefits Under FERS and CSRS.

One of the most common misconceptions that often kills an employee's chance of challenging an unjust removal is that termination from the civil service will result in a loss of retirement benefits. To the contrary, in most cases, employees are worse off resigning pending termination than actually being terminated.

It appears that a lot of this confusion may come from people misreading the statute for "early retirement." The statute covering early retirement explains that, subject to some exceptions, an employee is only eligible for early retirement if they are terminated for reasons other than "misconduct or delinquency." The term misconduct is applied pretty broadly to include many actions that are arguably performance based, but that is a separate topic altogether. The main takeaway here is that this restriction is only applicable if the employee is trying to take early retirement, which is different than being prematurely forced into immediate retirement. Early retirement is more or less a concession from the government that if you are let go for something like a reorganization within a few years of being eligible for retirement, the government will ease the restrictions and allow the employee to start receiving their annuity right away.

— Immediate Retirement Requirements and Disqualification —

For individuals who qualify for immediate retirement, you will not lose your benefits unless you are terminated for specific reasons, which I explain below. For FERS and CSRS employees, you are eligible for immediate retirement if you have reached 55 (CSRS) or the minimum retirement age (FERS; typically 56 or 57 depending on date of birth) and have 30 years in service, are 60-years-old and have 20 years of service, or are 62 and have five years in service.

For non-VA employees, you are excluded only if you are convicted of a felony that the government considers treasonous. The justification is that a retiree should not receive a paycheck from the same government they plotted to overthrow. For the average employee, this is pretty black and white. Stole a car? Keep your pension. Enlist in a foreign military that is at war with the United States? Lose your pension. For individuals who deal with classified data, keep in mind that one of these crimes is the felony disclosure of classified information. Regardless, even if an employee were to commit one of these felonies, resigning in lieu of termination does nothing to help prevent a criminal prosecution or conviction unless the agency has promised some sort of unethical exchange.

— VA-Specific Applications —

For VA employees, a change in the law adds that service may be discredited if the employee has been convicted of a felony that the VA determines influenced the employee's performance of the position. This is true regardless of whether the employee is terminated or if the employee resigns after receiving a proposed termination. The statute itself is poorly written and it is unclear what kind of connection the felony must have to the performance of the position. Clearly the VA would be justified in firing an employee who tries to rob a bank while off-duty. The question is whether the VA can then say the bank robbery demonstrates that the employee is dishonest and honesty is a necessary part of their performance, or if they actually need to show some connection between an off-duty felony and an on-duty incident.

— FEHB Health Benefit Plans —

Pretty much the only exception to the general rule that resignation in lieu of termination does not help with your CSRS or FERS benefits involves the continuation of the FEHB health plan for employees who are not otherwise eligible for immediate retirement. These employees may pay to continue their FEHB plan but not if they are terminated for "gross misconduct." This term is not explained in the statute. The FEHB handbook says that "Generally, an offense punishable as a felony is considered gross misconduct." Though the explanation starts off as extremely helpful, the handbook continues to say "Lesser offenses may also be gross misconduct, depending on the circumstances." In other words, technically everything can be gross misconduct, but you probably need to commit a crime. Unlike with the other laws discussed, this test is only applied for involuntary separation, so a voluntary resignation in lieu of termination can technically help in very limited circumstances.


To conclude, resignation does not help preserve retirement benefits. By resigning, an employee typically forfeits most of their rights on appeal unless they can successfully argue a constructive termination. One of the best arguments for constructive termination is actually that another agency employee falsely informed the subject of a proposed removal that he or she will lose their retirement benefits if they do not resign.

Generally, the only time that resigning may be an advisable way to avoid termination is if the employee has yet to receive a proposed termination. This is a big decision and involves a lot of uncertainty, so it is best to at least consult with a federal employment attorney before walking away from your job.

If you have questions or believe that an Agency is unfairly withholding your benefits, call Solomon, Maharaj & Kasimati, P.A. at (813) 497-7650.

-James Solomon


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