Partial Retirement — Can’t just spend your days golfing?

A new phased retirement option has been approved by Congress and signed into law by President Obama. The Federal Employee Phased Retirement Act represents a significant change in how federal employees and agencies will plan for retirement.

Employees can now take phased retirement for a few years at the end of a career.

Steve Losey is the senior writer at Federal Times. He told Chris Dorobek on the DorobekINSIDER program how the phased in retirements will work.

Losey’s Big Takeaways:

Length of service before phased retirement. An employee who is well into his third or fourth decade of service at the time of phased retirement will have a post-phased pension that is closer to the pension he would have earned if he had worked full-time those years.

Type of retirement plan. An employee who has spent all or part of his career in the Civil Service Retirement System — which has a far more generous accrual rate than the newer Federal Employees Retirement System — will not lose as much pension during his phased period.

Length of phased service. Employees who work longer in a phased retirement period will accrue more years of service, and as a result find their total phased pension is closer to what their pension would have been if they had worked full-time all those years.

Money Saving: The Congressional Budget Office estimates phased retirement would save $427 million over the next decade by spacing out retirements and new hires. February’s budget said agencies would save by not having to immediately replace employees phasing into retirement, by delaying payment of full retirement benefits, and by reducing the government’s need to rehire retirees.

In a statement sent to Federal Times, Office of Personnel Management Director John Berry — who earlier this year called phased retirement one of the budget’s most important federal staffing measures — applauded Congress for passing it.