Attorney General Jeff Sessions recently fired Andrew McCabe, the FBI Deputy Director 2 days before he would have become eligible for a 20 year LEO early retirement . The Justice Department’s Office of the Inspector General (OIG) reported that without authorization the Deputy Director released information to the news media. Many assume he lost his pension. That simply isn’t true.
If you leave federal service before you reach full retirement age and have a minimum of 5 years FERS or CSRS service you can elect to take a deferred retirement at age 62. Had he worked for a full 20 years under the LEO retirement system he could have taken an immediate retirement or a deferred retirement  at age 60.
According to a recent Washington Post article, Rep. Mark Pocan (D-Wis.) announced that he offered Mr. McCabe an election security job in his office for the express purpose of assisting the fired Deputy Director attain 20 years of service and retire early.
He may get picked up by Representative Pocan however I’m not sure election security is classified as a LEO position. When you leave a LEO position before accumulating a full 20 years of service, and either transfer to or re-enter federal service in a non LEO position, you would not be eligible for retirement until you reach your FERS Minimum Retirement Age  (MRA). I was not able to find a job series listing or qualification standards for an election security position on OPM’s website.
Essentially, If you leave federal service or change to a non-covered position before attaining 20 years under the special retirement provisions, your federal service is fully credited as if it was under the regular CSRS or FERS retirement system. You will not be eligible for a refund of the additional contributions  made under the special retirement provisions. If a Congressman does pick him up he won’t be eligible to retire until he hits his MRA of 56 years and 9 months of age unless the position is classified as a LEO position. He could also stop working after reaching 20 years service and elect a deferred retirement at age 60.
If you do not complete at least 20 years of creditable service under the “special” retirement coverage:
- Your retirement will only be computed as if you were under the regular retirement system. This basically reduces the computation for the 20 years from 34% of your high three salary to 20% of your high three.
- You will not be able to receive any refund of the additional LEO contributions you have made.
- If you complete the 20 years under a special retirement, you will lock in the option to retire earlier than employees under the regular retirement system. This can be like always having an “Early Out” option.
- You may want to consider staying in the LEO position until you have at least 20 years of coverage, thus locking in the special coverage computation and then changing to a higher paying, non-LEO position.
Even though Mr. McCabe was fired he will still be eligible for a deferred government pension. If he returns to a non LEO position he will have to work until he achieves FERS eligibility . When you retire at your MRA with at least 10, but less than 30 years of service, your benefit will be reduced by 5 percent a year for each year you are under 62, unless you have 20 years of service and your benefit starts when you reach age 60 or later.
There is also some confusion as to how many years of service Mr. McCabe had at the time of his firing. According to Wikipedia  he was hired by the Bureau in 1996. If this is true, and he was initially hired into a LEO position, he had over 20 years of creditable service and was waiting to apply on his 50th birthday. To apply for a LEO retirement you must be at least age 50 with a minimum of 20 years service.
If you are in a covered LEO position it pays to complete 20 years of creditable service before leaving for a non-covered position. You essentially end up with a lifetime early out option. Once you have 20 creditable years of service  you can retire at anytime thereafter and your annuity for those 20 years will be 34% of your high three average salary instead of the standards FERS factor of 20%.
From my personal experience as a federal manager with the FAA, it is difficult for a fired federal employee to be rehired under normal circumstances. If Mr. McCabe does return to federal service it would be highly unusual and certainly to his benefit. I believe that his services would be in considerable demand in the private sector and that’s where I think he will ultimately end up. Even though he may not receive an immediate annuity his time served with the FBI will serve him well. Many private sector firms would benefit from his expertise and FBI experience.
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Disclaimer: Opinions expressed herein by the author are not an investment or benefit recommendation and are not meant to be relied upon in investment or benefit decisions. The author is not acting in an investment, tax, legal, benefit, or any other advisory capacity. This is not an investment or benefit research report. The author’s opinions expressed herein address only select aspects of various federal benefits and potential investment in securities of the TSP and companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that retirees, potential and existing investors conduct thorough investment and benefit research of their own, including detailed review of OPM guidance for benefit issues and for investments the companies’ SEC filings, and consult a qualified investment adviser. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication, and are subject to change without notice. The author explicitly disclaims any liability that may arise from the use of this material.
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