Paid administrative leave before you separate

1. What administrative leave actually is

Administrative leave is a paid, non-duty status. You are excused from work, you are not charged annual or sick leave, and you continue to be paid. Critically, you remain a federal employee for every benefits purpose until the separation date on your agreement.

Agencies have used it this way at scale since 2025, first through the deferred resignation program and then through agency-specific versions. OPM has since proposed putting the practice into regulation explicitly for workforce-realignment purposes, which suggests the arrangement will recur rather than disappear.

What it is not: it is not retirement, it is not severance, and it is not a leave of absence you can extend. It is a fixed runway ending on a fixed date, and almost everything worth doing has to happen before that date arrives.

2. What keeps running while you are on it

The first three rows are the ones people underestimate. Several months of continued service credit, on a salary that still counts toward your high-3, is not a technicality — it can move you across a threshold that changes your entire retirement.

3. Check whether a milestone lands inside the window

Do this first, before anything else on this page. Take your service computation date, add the time through your separation date, and check it against every threshold:

• 5 years — vests you in a FERS annuity at all. Below this, there is no pension, only a refund.
• 10 years at your MRA — opens MRA+10, and with it a postponed annuity that restores FEHB later.
• 20 years at 60, or 30 at your MRA — an immediate, unreduced annuity plus the FERS supplement.
• 20 years at 50, or 25 at any age — the thresholds for VERA where the agency has the authority, and for discontinued service retirement where the separation is involuntary.
• 62 with 20 years — the 1.1% multiplier, a permanent 10% increase on every year of service.
• Five continuous years of FEHB enrollment immediately before retirement — the rule that decides lifetime coverage.

4. Resign or retire: the whole ballgame

Here is the difference, for the same person leaving on the same day with the same service:

Read the last row twice. Retiring is not automatic for someone who is eligible; it is an election you make by filing. Do nothing and the separation processes as a resignation, and by then the door has closed.

File the SF-3107 through your agency as early as the agreement allows. The process is covered in how to actually file, and expect the usual interim-pay wait afterward.

5. The TSP, before and after

Four things, in the order they will bite you:

• Any outstanding loan becomes a taxable distribution roughly 90 days after separation, and it blocks post-separation withdrawals until it is settled. Repay it while you are still being paid. See TSP loans.
• Contributions continue during the leave, so check your per-pay-period amount against the annual limit. Front-loading means losing the match on later pay periods.
• The Rule of 55 applies if you separate in or after the year you turn 55, making withdrawals penalty-free before 59½. Rolling to an IRA destroys it. See the Rule of 55.
• Update your address and beneficiary form at tsp.gov before you lose your agency email.

A quieter opportunity: the first full calendar year after separation is often the lowest-income year you will ever have, which makes it the cheapest window for Roth conversions.

6. Working during the leave

You are still a federal employee, so the rules that governed you on your last working day still govern you. Outside employment restrictions, conflict-of-interest rules, and your agency's prior-approval requirements all continue to apply.

Separately, post-employment restrictions attach after you leave. Under 18 U.S.C. 207 there is a lifetime bar on representing others back to the government on particular matters you worked on personally and substantially, a two-year bar on matters under your official responsibility, and a one-year cooling-off period for senior employees. These are criminal statutes, not guidelines.

The practical step is short: get written guidance from your agency ethics official before accepting anything, including consulting work with a contractor you dealt with. Ask before, not after.

7. Month-by-month checklist

• Immediately: written eligibility determination from HR computed to your separation date. Everything else depends on the answer.
• Immediately: confirm your FEHB five-year date and your FEGLI eligibility in writing.
• First month: pay off any TSP loan. Complete any military deposit or redeposit — these generally cannot be paid after separation.
• Second month: if eligible, file the retirement application. Early is better; the agency still has to certify and transmit it.
• Third month: decide the survivor election with your spouse. It also decides whether they keep FEHB after your death.
• Throughout: download everything from agency systems — SF-50s, leave and earnings statements, benefits confirmations. Access ends at separation.
• Throughout: update your address, personal email and phone with the agency, TSP, and your FEHB carrier.
• Final month: build the cash cushion for the interim-pay gap, three to six months of expenses.
• Final week: confirm your separation SF-50 shows the correct date and the correct nature of action — retirement, not resignation.

8. If you are not eligible by the date

With five or more years of creditable service, you leave with a deferred annuity payable at 62, or at 60 with 20 years. It is not nothing — even seven years of service is worth six figures over a retirement — but you apply for it yourself, years later, with Form RI 92-19.

Do not take a refund of your contributions. It returns only your own money and permanently destroys the annuity and any survivor benefit. The comparison is in taking the FERS refund.

For health coverage, TCC runs 18 months at the full premium plus 2%, and separation is a qualifying event opening a 60-day special enrollment period on the Marketplace. The options are compared in bridging healthcare before 65.

9. Frequently asked questions