Shutdown or not, there are things to do 

It is that time of the year when many federal employees, as well as retirees, must make some important decisions regarding their federal retirement and insurance benefits. I thought it might be a good time to make a checklist of things that you may be facing this fall. It might be especially important this year as many of you are furloughed due to the lengthy government shutdown.  

CSRS or FERS Retirement   

I have been getting questions about retirement at the end of 2025. Although it has been a year like none other, many federal workers are taking advantage of skirting the use or lose deadline by planning to retire before the end of the 2025 “leave year.” For most federal workers, the leave year will end on Saturday, Jan. 10, 2026.   

Due to a variety of circumstances, not the least of which is the furlough and the fear of losing your job involuntarily due to threats (and for some, a reality) of a major reduction in force, you may find you have a lot of annual leave in your account and enough service to retire on your own terms from your federal career.

If you are in the eight-hour leave category, you will accumulate 208 hours of annual leave by Jan. 10 and you may have carried over 240 hours from 2024. If you haven’t used any leave this year, that is a potential lump sum payout of 448 hours of annual leave. Of course, the catch is that you have to retire before the end of the 2025 leave year to be paid a lump sum for this unpaid compensation. For example, if your salary is $125,220, then your hourly pay rate is $60/hour ($125,220/2087 hours). If you have a balance of 448 hours of leave in your account on the day of your separation from federal employment this would be a gross payout of $26,880 (before federal, state FICA, and Medicare tax withholding).     

If your plan is to leave between now and Jan. 10, now is the time to submit your Online Retirement Application. The mandate to use the digital electronic application was implemented in two phases:  

• June 2, 2025: All agencies served by the National Finance Center and Interior Business Center were required to begin submitting applications through ORA. 

• July 15, 2025: The ban on paper applications became effective for all federal agencies. Any new application started on or after this date had to be submitted electronically.   

The ORA took the place of the standard forms previously used to apply for retirement. If you are unable to reach your HR office due to the shutdown, you can still prepare by completing the SF 2801 (CSRS Application for Immediate Retirement) or SF 3107 (FERS Application for Immediate Retirement). You can find most forms at www.opm.gov/forms.     

Although you will be required to complete the ORA once the furlough has ended, filling out the paper application will give you an idea of the information you will need and decisions that must be made at the time of submitting your retirement request. Before you retire, it would be good to obtain a final retirement estimate for your planned retirement date along with a summary of your federal service prepared by a retirement specialist in HR. The Summary of Service will be part of the ORA and you should also receive a final retirement estimate once your HR office is back to work.   

If you are planning to postpone applying for retirement under the MRA + 10 provisions of FERS, it is important to review the Application for Deferred or Postponed Retirement, RI 92-19, that you will complete and submit about 60 days before you would like your benefit to begin in the future. At that time, you will not have access to your agency’s human resources to assist you. If possible, request a retirement estimate of your future benefit and make copies of your personnel records that show your insurance coverage (you will need to have the last five years of your career covered under FEHB and FEGLI if you plan to reinstate these benefits later). Also, maintain copies of records of the beginning and ending dates of your periods of federal service and any change in retirement coverage or work schedule. 

Life Insurance: FEGLI 

If you are covered by FEGLI, you will be asked to upload the Continuation of Life Insurance form SF 2818 along with your retirement application using the ORA System.  

Retirement Processing 

During a shutdown/furlough, retirement processing can be delayed, see the Q&A below copied from OPM’s Guidance for Shutdown Furloughs. The normal retirement processing can be reviewed using OPM’s Quick Guide for Retirement Processing found at https://www.opm.gov/retirement-center/apply/quick-guide/.   

Be sure to maintain copies of your completed applications and copies of your records of federal service that show your beginning and ending dates of employment, changes in retirement coverage as well as changes in your work schedule (these documents are in your eOPF). Be sure that you also have documentation of your health and life insurance coverage showing that you have been covered during the last five years of your federal service. Update your CSRS or FERS, FEGLI and TSP beneficiary designations, if necessary, as well. The beneficiary forms can be found at www.opm.gov/forms - SF 3102, SF 2821 and for the TSP, go to https://www.tsp.gov/forms/ where you can learn how to add or update a beneficiary designation. 

Thrift Savings Plan 

Learn about your distribution options that are available at https://www.tsp.gov/withdrawals-in-retirement/    

You can learn how much income you might generate from your savings by computing a TSP annuity estimate using the TSP Annuity Calculator:  https://www.tsp.gov/calculators/tsp-annuity-calculator/#panel-1  

There are many options for managing and using your TSP funds in retirement, and to learn more, check out the TSP YouTube channel.  

Federal Long Term Care Insurance Program  

OPM suspended new applications for FLTCIP in December 2022 for an indefinite period. There has been no indication when this will end but watch for possible news during the upcoming Open Season that begins on Nov. 10. If you are currently enrolled, you can also review your coverage online in your My LTCFEDS account. If you need additional information to help you make your decision, call from 8 a.m. to 6 p.m. EST: 

1-800-LTC-FEDS (1-800-582-3337) 

TTY 1-800-843-3557 

Intl. 1-571-730-5938 

Federal Employees Health Benefits program and the Postal Service Health Benefits program 

The PSHB for Postal employees and annuitants was implemented during last open season and has now been in use for almost a year. It is time to review the information that is currently available prior to the Open Season.  

Open Season will be held from Nov. 10 through Dec. 8, 2025, for FEHB and the new PSHB. 

The 2026 premiums have been released for both FEHB and PSHB and prices have gone up more than average on some of the popular plans. Check out the 2026 FEHB rates for 2026 here: https://www.opm.gov/healthcare-insurance/healthcare/plan-information/premiums/ The PSHB rates are different; find those rates for 2026 here: https://www.opm.gov/healthcare-insurance/pshb/premiums/   

If you do nothing else this open season, review your 2026 plan brochure once they are released and on the front cover, you will find a reference to pages in the brochure that provide the changes in your plan for 2026, a summary of benefits and the new premiums. You will begin to see the 2026 information popping up on the plan websites. 

Federal Employees Dental and Vision Insurance Program 

After you have selected your FEHB/PSHB coverage for 2026, check to see if your health plan provides dental or vision care benefits. If not, or if you need more coverage, select one of the national/international dental plans. There will be a series of webinars and a virtual health fair available at www.benefeds.gov where you can learn more about this program.  

Federal Flexible Spending Account Program 

Employees should also consider the amount of money to set aside in a tax-free flexible spending account program offered through the Federal Flexible Spending Account Program. Visit https://www.fsafeds.gov/support/eligibleexpenses for all of the eligible expenses where you can spend your allocated funds. It is not too late to use the funds that you have contributed in 2025. Check out the options for health care, dependent care and one for dental and vision expenses specifically for individuals covered under a high deductible health plan who use a Health Savings Account.  

The Office of Personnel Management has provided the following guidance for retirements during a shutdown: https://www.opm.gov/policy-data-oversight/pay-leave/reference-materials/guidance-for-shutdown-furloughs-sep-28-2025/  

Question 1: If a shutdown furlough occurs during the employee’s highest years of salary, what effect will time in a furlough status have on an employee’s high-3 average pay? 

Answer: Once the lapse in appropriations ends, employees who would have been in pay status but for the lapse will receive retroactive pay for furlough periods pursuant to 31 U.S.C. 1341(c)(2). Thus, there will be no effect on such an employee’s high-3 average pay. 

Question 2: Are the retirement rules concerning the effect of a shutdown furlough the same for employees under the Civil Service Retirement System and the Federal Employees Retirement System? 

Answer: Yes. 

Question 3: What will happen to employees who have retired during a shutdown?Answer: For employees who, on or before the requested retirement date, submitted some notice of their desire to retire, agencies should, when the lapse in appropriations ends, make the retirement effective as of the date requested. The retirement request may be informal (such as a letter requesting retirement), and can be either mailed or personally submitted to the agency. Any additional required paperwork, such as the formal retirement application, may be completed when the agency reopens. No time spent by the retiree in such actions after the effective date of the retirement may be considered as duty time, since the individual would no longer be an employee of the agency. 

Question 4: If an employee is scheduled to retire before the end of the leave year with an annual leave balance of over the maximum leave ceiling (e.g., 240, 360 or 720 hours, as applicable) and the furlough prevents the employee’s retirement from getting processed until January, does the employee lose his or her annual leave above the maximum leave ceiling? 

Answer: No. The employee’s retirement would be retroactively applied to a date prior to the end of the leave year, and the employee would receive the full amount of accumulated and accrued annual leave in a lump-sum payment. 

The following Q&A are for retirees who are wondering how the government closure will impact their retirement: 

Question 5: I’m a federal retiree. Will I still receive my monthly annuity payment during a government shutdown? 

Answer: Yes. Federal retirees under the CSRS and FERS retirement systems will still receive their scheduled annuity payments on the first business day of the month. 

Question 6: How can I make updates or changes to my retirement benefits? 

Answer: OPM’s Retirement Services is available to assist you with your retirement benefits. As always, you can make many of these changes online through Services Online or by calling Retirement Services at (888) 767-6738. The lines open at 7:40 am EST, try calling early. Due to the volume of calls, we recommend that you first use the online services site to make immediate updates and changes. You can also find general information online. 

Question 7: How do I report the death of a family member during a government shutdown? 

Answer: You can refer to our website Annuitant Death Index - RS Reporting (opm.gov) for information on reporting the death of a current retiree and applying for any benefits, or by calling us directly at (888) 767-6738. If the family member was a federal employee at the time of death, survivors must contact the agency for which the deceased worked. If the employing agency is closed, you may need to wait until after the shutdown ends to begin the process. 

Question 8: I recently retired from federal service. Will my retirement application be delayed by a government shutdown? 

Answer: If your agency or payroll center submitted your retirement application to OPM, you will begin receiving interim annuity payments while OPM Retirement Specialists process your application. Because OPM Retirement Services is funded by the trust fund it manages, OPM Retirement Services employees will still be working normal operating hours during a government shutdown. 

If your agency or payroll center has not yet submitted your retirement application or the application is incomplete, you will likely experience some delay as OPM must wait on other agencies to submit all the information needed to process your retirement. Some functions of these agencies may not be operating during a government shutdown. 

Question 9: I applied for disability benefits. Will my application still be processed? 

Answer: Employees in Retirement Services at OPM will continue working on your application. If the application requires additional information from other agencies, expect delays during a government shutdown. 

Question 10: Can I submit a court order that awards a retirement benefit to OPM during a government shutdown? 

Answer: Yes. OPM employees will continue working to process court ordered retirement benefits. 

Payments upon separation from Federal Service 

Question 11: If there is a shutdown furlough, how does this impact a separating employee’s lump-sum payment for their unused annual leave? 

Answer: In the event of a shutdown furlough, any payments incurred by the agency for an employee’s lump-sum payment will be delayed until funds are available. 

Question 12: How are separated employees’ entitlements to severance pay affected by a shutdown furlough? 

Answer: Funds for severance pay are obligated on a day-to-day basis as the recipient accrues continuing entitlement to severance pay by not being reemployed by the government of the United States. (Severance pay is suspended or terminated when the individual is reemployed by the federal government.) Severance pay is paid at the same pay period intervals as if the recipient were still employed. Any severance payment (on payroll payday) is linked to the corresponding pay period during which the recipient accrued continuing entitlement to severance pay. If the recipient is reemployed by the federal government during a pay period, he or she is entitled to a prorated severance payment covering the days in the period prior to reemployment (e.g., 2/5 of one week’s pay if the recipient was reemployed on the third workday of the pay period). 

Thus, in the case of a shutdown furlough, accrued but unpaid severance pay represents an obligation to be paid from funds available before the lapse in appropriations occurred. Just as payroll checks for work performed prior to a lapse in appropriations can be processed as part of the orderly suspension of nonexcepted activities, severance pay checks covering days before the lapse may also be processed. No funds may be authorized for severance payments for days during the lapse until an appropriation is enacted. 

See additional information on severance pay (including eligibility criteria and payment formulas). https://www.opm.gov/policy-data-oversight/pay-leave/pay-administration/fact-sheets/severance-pay  

Editor's note: This article has been updated to clarify that the leave year for most federal workers will end on Saturday, Jan. 10, 2026.