OPM’s proposed RIF rule: performance replaces seniority
For decades, surviving a reduction in force came down to a predictable formula where time served did most of the work. OPM has proposed rewriting that. Under the March 2026 proposal, your last three performance ratings — not your service computation date — would become the primary factor deciding who stays, and veterans’ preference would shift from near-automatic protection to a points bonus. A 15-year employee could be released before a 5-year one. Here’s the scoring, a calculator for your own standing, and what it means for your retirement timing.
OPM published this as a proposed rule on March 5, 2026. Comments closed in May after heavy pushback from unions and professional associations, and no final rule has been issued. Today’s RIFs still run under existing 5 CFR part 351 rules. The final version may differ — plan around the direction, not the decimals.
1. What OPM actually proposed
The proposal would revise 5 CFR part 351, reworking subpart E (“Retention Standing”) and related sections. The governing statute, 5 U.S.C. 3502, requires OPM to give “due effect” to four factors when releasing employees in a RIF: tenure of employment, military preference, length of service, and performance ratings. Those four factors don’t change — what changes is the weight and order OPM assigns them.
The proposal also carves out categories entirely: Schedule C and Schedule G appointments would expressly not be subject to RIF procedures, and an employee serving an initial probationary period and a supervisory probationary period simultaneously would be exempt.
2. The old order versus the new order
Under current regulations, employees are classified on a retention register by tenure group, veterans’ preference, length of service, and performance — in that descending order. Within a subgroup, ranking runs by years of service, augmented by a performance credit. Seniority does the heavy lifting.
Proposed: tenure group → performance score (+ vet points) → subgroup → service date
Under the proposal, employees are ranked within their competitive- or excepted-service tenure group on performance, augmented by veterans’ preference points. Ties go to the higher tenure subgroup, and remaining ties break on service computation date — meaning seniority drops from primary driver to final tiebreaker.
3. The scoring system: 7 / 5 / 3 / 0
Performance credit would come from your three most recent ratings of record, each converted to points and totaled.
| Rating of record | Points each | Three ratings |
|---|---|---|
| Outstanding | 7 | 21 max |
| Exceeds Fully Successful | 5 | 15 |
| Fully Successful | 3 | 9 |
| Minimally Successful / Unacceptable | 0 | 0 |
The spread is what matters. A consistently Outstanding employee carries 21 points; a consistently Fully Successful one carries 9. That 12-point gap is far larger than anything veterans’ preference or a tiebreaker can close.
4. What happens to veterans’ preference
Preference still counts — but its character changes. Today it functions as a subgroup placement that effectively lifts preference-eligible employees above non-preference employees in their tenure group; combined with solid tenure, that made many veterans close to untouchable in a RIF. Under the proposal it becomes an additive bonus of 5 or 3 points depending on eligibility category, stacked on top of the performance score.
The practical consequence: preference is no longer a trump card. A preference-eligible employee with three Fully Successful ratings (9 + 5 = 14) would rank below a non-veteran with three Outstanding ratings (21 + 0 = 21).
5. Score your retention standing
Enter your three most recent ratings of record and your preference category to see where you’d land under the proposed framework.
Your ratings
Illustrative, based on the proposed rule as published — not an official determination. Scores only compare employees within the same competitive area and tenure group, and the final rule may change the values or the preference categories.
6. Fifteen years versus five years
The clearest way to see the shift is a head-to-head. Two GS-12s in the same competitive area, one with 15 years and steady Fully Successful ratings, one with 5 years and straight Outstanding ratings.
| 15 years, Fully Successful | 5 years, Outstanding | |
|---|---|---|
| Performance points | 9 | 21 |
| Under current rules | Retained | Released |
| Under the proposal | Released | Retained |
A ten-year seniority advantage, erased. If you have spent a career assuming your service date protects you, that assumption is exactly what this rule targets.
7. The other rule: where you’d appeal
Running in parallel, OPM published a separate proposed rule in February 2026 that would move RIF appeal rights from the MSPB to OPM itself. Today, employees separated, demoted, or furloughed more than 30 days by a RIF may appeal to the MSPB under 5 CFR 351.901, generally within 30 days of release.
OPM’s legal argument is that MSPB’s jurisdiction over RIF appeals exists only by OPM regulation, not by statute — Congress having excluded RIF appeals from MSPB’s statutory jurisdiction in the Civil Service Reform Act of 1978 — so what OPM created by regulation it can revoke the same way. Federal employee unions dispute that reading. This one is also not final.
8. What it means for your retirement decision
Whatever the final rule says, the retirement math is unchanged and it is the part most people get wrong. Whether you separate or retire governs your annuity, your FERS supplement, and your health insurance for life.
If a RIF or early-out lets you retire on an immediate annuity — through Discontinued Service Retirement at age 50 with 20 years of service, or at any age with 25 — your pension starts now, and you can generally carry FEHB into retirement if you satisfied the five-year enrollment rule. Separate without retirement eligibility and you may be looking at temporary continuation of coverage and a deferred annuity years later.
Three things worth doing before you accept anything: verify your service record and ratings (they now carry far more weight), run a retirement estimate at each eligible date, and confirm the five-year FEHB rule in writing. The FERS supplement in particular has eligibility traps — it isn’t payable on a deferred retirement, and for a DSR before your MRA it doesn’t begin until you reach your MRA.
9. FAQ
Is the new RIF rule in effect yet?
No. OPM published this as a proposed rule in the Federal Register on March 5, 2026, and a proposed rule does not take effect until OPM issues a final rule. The public comment period drew a substantial response, including opposition from federal employee unions and professional associations, and closed in May 2026. As of late July 2026 the final rule has not been published, so current RIF regulations under 5 CFR part 351 still govern. The final version may differ from the proposal, so treat the specifics here as the proposed framework rather than settled law.
How would the proposed retention scoring work?
Retention standing would be built from performance credit drawn from your three most recent ratings of record. Under the proposal, each rating carries points: Outstanding is worth 7, Exceeds Fully Successful 5, Fully Successful 3, and Minimally Successful or Unacceptable 0. Those three ratings are totaled, producing a maximum of 21 points. Veterans’ preference then adds either 5 or 3 additional points depending on eligibility category. Employees are ranked within their tenure group on that combined score, and where scores tie, the higher tenure subgroup ranks ahead, with service computation date used to break remaining ties.
Would veterans' preference still protect me in a RIF?
It would still count, but it would work differently. Under current rules, veterans’ preference operates as a subgroup modifier that effectively places preference-eligible employees ahead of non-preference employees within their tenure group, which combined with seniority made many veterans very secure. Under the proposal, veterans’ preference becomes a point addition — 5 or 3 points depending on eligibility — layered on top of the performance score rather than an automatic placement at the top of the retention register. A preference-eligible employee with weaker ratings could therefore rank below a non-veteran with stronger ratings.
Could a long-tenured employee be cut before a newer one?
Yes, and that is the central change. Under current regulations, length of service augmented by a performance credit drives retention standing, so a 15-year employee with consistent Fully Successful ratings would generally outrank a 5-year employee with Outstanding ratings. Under the proposed scoring, the 5-year employee with three Outstanding ratings would total 21 performance points against 9 for the 15-year employee, and would be retained. A decade of seniority can be erased by the ratings differential, which is why OPM’s proposal is widely described as the most significant change to RIF retention since the Civil Service Reform Act of 1978.
How does a RIF affect my federal retirement?
The decisive question is whether you separate or retire, because that distinction governs your annuity, your FERS Special Retirement Supplement, and your health insurance. If a RIF or an early-out lets you retire on an immediate annuity — for example through Discontinued Service Retirement at age 50 with 20 years of service, or at any age with 25 years — your pension begins and you can generally carry FEHB into retirement if you met the five-year enrollment rule. If you simply separate without retirement eligibility, you may be limited to temporary continuation of coverage and a deferred annuity later. Run a retirement estimate and confirm your FEHB eligibility before accepting any offer.
Where would I appeal a RIF action?
Currently, employees who are separated, demoted, or furloughed for more than 30 days by a RIF action may appeal to the Merit Systems Protection Board under 5 CFR 351.901, generally within 30 days of the effective release date. However, OPM published a separate proposed rule in February 2026 that would transfer those appeal rights from the MSPB to OPM itself. OPM’s legal position is that MSPB jurisdiction over RIF appeals exists only by OPM regulation rather than by statute, and can therefore be revoked the same way. Federal employee unions dispute that reading, and this proposal is also not final.