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Federal Retirement
Discontinued Service Retirement

A discontinued service retirement is a special type of retirement for employees who receive an involuntary separation from the federal service.

In most cases, DSRs provide eligible employees with an immediate annuity payment.

However, this annuity payment can be less than what an employee would normally receive.

Few federal employees understand the differences between DSR and other retirement types, so read on to learn more about whether DSR applies to you.

Understanding Your Discontinued Service Retirement Eligibility

There are three main requirements to obtain a DSR.

First, you need to have received an involuntary separation. Second, you have to meet certain age and service requirements.

Third, you must not have rejected a “reasonable offer” of employment from your agency. 

Obtaining an Involuntary Separation

The key feature of a DSR is that it only applies to employees with involuntary separations. The Office of Personnel Management (OPM) considers several following situations to qualify as “involuntary separations.”

  • Reductions in force (RIF): Reductions in force occur when an agency lays off some employees in response to budget cuts. 
  • Unacceptable performance that is not caused by employee misconduct: This case might seem a bit confusing at first glance. However, there are several situations where an employee performs unacceptably for reasons other than misconduct, like injury or disability.
  • Loss of position due to organizational changes or lack of funds: In most cases, an agency will try to transfer an employee after it changes or dissolves that employee’s position. However, you will be eligible for a DSR if your agency decides to separate you instead. 
  • Transfer of position or function outside your commuting area: While federal employees occasionally have to change offices, the government cannot force them to move outside their local area unless they have signed a mobility agreement. 

These are just a few situations that qualify as “involuntary separations.” Contact a federal employment attorney to learn more about whether your situation is an involuntary separation.

Age and Service Requirements

Assuming your separation was involuntary, you need to meet several other requirements to be eligible for a DSR annuity.

First, you need to be at least 50 years old and have at least 20 years of federal service.

However, if you have 25 years of federal service or more, you can be eligible for a DSR even if you are younger than 50.

In either situation, at least five years of the employee’s federal service needs to be in civilian service. Military service can account for the other 20 years.

Another important factor is the retirement service that covers your position. There are two primary retirement systems in the federal government.

The first is the Civil Service Retirement System (CSRS), which applies to more senior federal employees.

The second (and far more common) retirement system is the Federal Employee Retirement System (FERS). Both CSRS and FERS employees can receive a DSR.

However, the requirements and procedures for obtaining a DSR vary between those two retirement systems.

The differences are quite nuanced, so you should consult a knowledgeable federal employment lawyer for more information.

The Reasonable Offer

The final requirement for obtaining a DSR is that you must not have refused a “reasonable offer” from your agency.

To be a reasonable offer, you must be offered a position in writing that is:

  • A good match for your qualifications,
  • With your agency (or successor agency),
  • Within your commuting area, unless you have a mobility agreement with your agency,
  • No more than two levels below your current grade or pay level. and 
  • The same service type.

The position must also have the same work schedule. If you reject an offer that meets all of these criteria, then you cannot obtain a DSR. 

How to Get a Discontinued Service Retirement

Assuming you meet these requirements, your agency should automatically provide you with a DSR annuity.

But in some cases, your agency may first ask you to provide certain kinds of information to confirm your eligibility. 

Receiving a DSR can reduce the amount of your retirement annuity according to your retirement age.

Specifically, for employees under the CSRS system, receiving a DSR reduces your other retirement benefits by one-sixth of one percent for every month that you are under age 55 when you retire.

For instance, a CSRS employee that retires at age 47 will receive only 84% of their annuity because of their early retirement. 

For all FERS employees with a DSR, you can calculate your FERS retirement using the typical calculation for non-disability retirements here

Want to Learn More About DSR? We Can Help

DSRs are poorly understood by most federal employees. In fact, even federal human resources departments can be unfamiliar with DSRs.

As a result, your agency may wrongfully deprive you of a DSR after you receive an involuntary separation. 

If you want to learn more about DSRs or think that you might be eligible for one, you need to contact a skilled employment attorney immediately.

A qualified federal employment lawyer can review your personnel file and apply the law to your situation.

They can also help you understand your options and file a claim with your agency.

But for obvious reasons, you need to have the right kind of lawyer if you want to maximize your chances of prevailing in court. 

If you’re looking for legal representation you can trust, reach out to the Federal Employment Law Office of Aaron D. Wersing, PLLC.

Our team of dedicated legal professionals is highly experienced with federal employment issues of all kinds. And we are dedicated to preserving and protecting your rights as a federal employee.

Give us a call today at 866-612-5956 or contact us online today to set up a free initial consultation.

You can also set up an appointment with us online and read about our past results.

Author Photo

Aaron Wersing, Attorney at Law

Aaron Wersing is the founder of the Law Office of Aaron D. Wersing. Mr. Wersing graduated from the Georgia State University College of Law with a Doctorate in Jurisprudence and was the recipient of the CALI Excellence for the Future Award. Mr. Wersing previously attended the University of Georgia, where he received a Bachelor of Business Administration degree in Accounting. Mr. Wersing is an active member of his local community. Mr. Wersing acts as a volunteer attorney with Houston Volunteer Lawyers, the pro bono legal aid organization of the Houston Bar Association. He is also a member of professional legal organizations such as the National Employment Lawyers Association and the American Inns of Court. To reach Aaron for a free consultation, please call him at (833) 833-3529.

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