On Jan. 28, 2025, nearly 2.2 million federal employees received a notification from the Office of Personnel Management (OPM) explaining their right to elect a “deferred resignation” from the federal government.[1] Presently, eligible federal employees have until Feb. 6, 2025, to accept this offer. OPM’s deferred resignation notice is titled, “Fork in the Road” and the initial guidance has left a large majority of the federal workforce with career-altering decisions. The deferred resignation program is an unprecedented event that has raised many questions pertaining to legitimacy, practicality, and legality. It, in essence, relieves the employee of his or her duties while paying the employee, pursuant to the eligible employee’s election, through Sept. 30, 2025.

The federal government has exempted certain full-time federal employees from eligibility including but not limited to the employees of U.S. Postal Service, military personnel of the armed forces, positions related to immigration enforcement and national security, and positions related to public safety. To determine whether or not you are eligible for deferred resignation, please review OPM’s Jan. 28, 2025, email notification, consult with your labor relations department, seek independent federal labor and employment legal counsel, and/or review additional guidance provided by OPM under “Frequently Asked Questions” for guidance. [2]

As a federal employee considering the deferred resignation program, you should evaluate several key factors before making any decisions. Here are some critical considerations:

Job Requirements under the Deferred Resignation Program

Here are some specifics we know:

• You do not need to return to work in-office;
• You do not need to perform any work;
• You can obtain subsequent employment, private or federal;
• You may seek federal employment in the future following your resignation date;
• You may rescind your resignation notice, at any time, but such reinstatement is not guaranteed and will be assessed on a case-by-case basis;
• You may accelerate your resignation date for any reason.

While OPM issued guidance relating to job expectations, federal employees should understand that there may be some work required in order to effectuate a smooth transition to resignation. This may include completion of outstanding tasks, adhering to certain deadlines, preparing transitionary memorandums prior to the effective resignation date, completing ad hoc requirements or other work-related needs that promote the efficiency of the federal service. Some government agencies, especially health care services, may require on-site job requirements, at least in the interim, or under a flexible hybrid schedule during the deferred resignation period.

Retirement Benefits and Eligibility

 If you are a federal employee covered by the Federal Employees Retirement System (FERS) or Civil Service Retirement System (CSRS) and you planned to retire with the federal government on or before Sept. 30, 2025, then your deferred resignation date will be extended to match your retirement date. OPM confirmed that federal employees will continue to accrue retirement benefits and annuities during the deferred resignation period. Your standard thrift savings plan contributions remain as-is and continue through your resignation date.

Alternatively, if your retirement date is between Oct. 1, 2025, and Dec. 31, 2025, then you are still eligible for deferred resignation (barring any exemption by your specific federal agency). To avoid any ambiguity in electing this option, ensure that you state, in writing, something to the effect of “resign and retire” to eliminate and discrepancies in processing your deferred resignation if you are simultaneously seeking to retire.

There is a distinction that exists between federal employees who are eligible to retire within the deferred resignation window, as stated above, and federal employees who elect the deferred resignation program but are not otherwise eligible for normal retirement.[3] If you voluntarily resign before meeting the prerequisites for standard retirement eligibility, you may lose access to certain pension benefits. Although you will continue to accrue further annual leave, sick leave, etc. and be paid out for unused leave at your final resignation date, you may be ineligible to receive retirement annuities that you would have received if you continued your tenure at the Agency.

If you are considering retirement but are reluctant to elect deferred resignation, then alternative options exist including but not limited to early retirement, immediate retirement, taking leave without pay (LWOP).

Heath Insurance Coverage

Currently, under the deferred resignation program, federal employees are generally eligible to continue to receive their Federal Employee Health Benefits (FERB) and Federal Employee Life Insurance (FEGLI) through Sept. 30, 2025. Those benefits typically cease thirty-one (31) days following the deferred resignation date. You may be eligible to receive temporary continuation coverage for up to eighteen (18) months for Federal Employees Health Benefits (FEHB), but that extension will accompany increased cost such as paying the full premiums plus administrative fees. Only retirees who satisfy the minimum OPM requirements, regardless of the deferred resignation option, will be eligible to carry FEHB into retirement. If you resign before you are eligible for federal retirement, you would need to return to federal service to reinstate your FEHB. If you plan to retire later with deferred benefits, there is no deferred reinstatement for FEGLI in the future unless you return to federal service and re-enroll.

 Unemployment Insurance and Tax

 Federal employees who voluntarily resign under the deferred resignation program may not qualify for unemployment benefits, depending on state law.

You may encounter unanticipated tax risk if you defer your resignation. The pay-out structure of the program may yield tax liabilities that push you into a higher tax bracket. You should consult with a tax expert to determine the deferred resignation’s effect on your tax liabilities.

 Job Security and Prospective Employment

OPM’s guidance referenced “four pillars” for a reformed federal workforce that identified a cognizable shift in performance culture requiring an “exceeds expectations” standard, strict return in-office requirements, and increased standards of conduct. [4]

Although omitted from OPM’s guidance, federal employees need to prepare for a potential reclassification of their job position(s) to a “Schedule F” status, which is akin to having an at-will employment status in the private sector.[5]  It is currently unknown which positions will qualify for Schedule F status, but this designation is expected to affect tens of thousands of civil servants.[6]

The deferred resignation program circumvents the requirement for federal employees to return to work in-office, avoid premature layoffs or possible furloughs during the deferred resignation period, and exclusion from Schedule F re-classification.

Special Legal Considerations

If you have an active claim against a federal agency for discrimination, whistleblower retaliation, or a Merit Systems Protection Board appeal, you should carefully consider the impact that the deferred resignation program may have on your claims.

 

As an initial matter, resigning under the deferred resignation program does not automatically dismiss your claims. However, the remedies you seek may be adversely impacted by the deferred resignation. Specifically, some remedies that may be negated or obfuscated are reinstatement, reassignment, and/or telework capabilities.

If you resign, while your case is pending, the government may argue that you left voluntary, potentially weaking your claims if you are seeking to allege that the federal government coerced or unlawfully compelled you into early resignation/retirement.

If you have a pending case, then structuring a settlement agreement around the deferred resignation program may benefit you rather than deferring to a litigation process that is both costly and time-consuming. If you are considering settlement options, consider consulting with a federal employment and labor law attorney to negotiate terms, in writing, that preserves your rights and benefits before resigning.

Government Shutdown Issues

At this stage, it is difficult to determine how a government shutdown could affect the deferred resignation program. The current funding bill is set to expire on March 14, 2025. A natural question is whether or not federal employees can receive pay for work that is not being completed.  Notably, whether you are a participant in the deferred resignation program, or an employee who opted out of the deferred resignation program, any federal employee’s pay may be impacted by a shutdown.

In sum, the deferred resignation may have been designed as a one-size-fits-all approach to reducing the federal workforce but each eligible employee’s circumstances must be evaluated the program on a case-by-case basis. Developments are happening quickly, at an executive, congressional, and judicial level, and attorney consultation is advisable.

If you are an employee in the federal workplace, consulting with an experienced Tully Rinckey attorney can make all the difference when issues arise. A skilled attorney can fight to get you the best possible outcome in your case. Call 8885294543 or contact us online today for a consultation and get an advocate who will fight for your rights and help secure your career and your future.

Courtney Deblois Esq. is a corporate law and labor and employment attorney with a unique perspective gained from her prior experience as in-house counsel for an international inter-dealer brokerage firm on Wall St. in Manhattan, NY. Courtney brings a deep understanding of the complexities of regulatory and employment law in the corporate context and has a proven track record of success in advising and representing the corporation in a variety of employment-related matters.

[1] See OPM “Fork the in the Road” deferred resignation email: https://www.opm.gov/fork

[2] https://www.opm.gov/fork/faq

[3] Generally speaking, retirement eligibility is determined by your age and number of years of creditable service. To be eligible for immediate retirement or an early retirement, which is separate that retirement under the deferred resignation program, federal employees must satisfy OPM requirements. https://www.opm.gov/retirement-center/fers-information/eligibility/

[4] https://www.opm.gov/fork

[5] See 5 U.S. C. § 7511 (b)()2).

[6] https://www.whitehouse.gov/presidential-actions/2025/01/restoring-accountability-to-policy-influencing-positions-within-the-federal-workforce/