Waiver authorities have expired, been extended and lapsed repeatedly, and the position stated here reflects the situation as documented through 2026. If you are considering reemployment, confirm the current authority with the hiring agency's HR office in writing rather than relying on any summary, including this one.
I The default rule
Under the laws governing CSRS and FERS, a reemployed annuitant's salary is reduced by an amount equal to their retirement annuity. The rule sits in 5 U.S.C. 8344 for CSRS and 5 U.S.C. 8468 for FERS, with regulations in 5 CFR part 837, and it dates back to the Civil Service Retirement Act Amendments of 1956.
The principle is that the government should not pay twice for the same person at the same time. Whether that is right is a policy question; that it is the default is not.
What the offset actually looks like
A retiree drawing an $80,000 annuity is offered a $110,000 position.
II Reemployment Pay Calculator
What returning actually adds to your income, with and without a waiver.
What Does Going Back Actually Pay?
Estimates only. Confirm the current waiver authority with the hiring agency before relying on any figure here.
III Two waiver routes
| Permanent authority | NDAA authority | |
|---|---|---|
| Created by | FEPCA 1990, § 108 of P.L. 101-509 | NDAA FY2010, § 1122 of P.L. 111-84 |
| Codified at | 5 U.S.C. 8344(i), 8468(f) | 5 U.S.C. 8344(l), 8468(i) |
| Regulations | 5 CFR part 553 | Agency implementing instructions |
| Granted by | OPM, or delegated authority | Agency heads directly |
| Status | Permanent | Expired 31 Dec 2024 |
The distinction matters because they were granted by different people on different criteria. Under the permanent route, waivers rest on grounds such as exceptional employment needs or emergencies — an emergency being something sufficiently significant to involve direct threats to life or property, such as a military threat, a natural disaster or a pandemic.
IV What expired, and what did not
The NDAA route let agency heads grant their own waivers on a temporary basis, which made it far easier to use than going through OPM. Section 1122 of the FY2010 NDAA created it; section 1117 of the FY2020 NDAA extended it for executive branch agencies through 31 December 2024.
The 2025 NDAA did not include a dual compensation waiver provision. No new waivers could be approved under that authority after that date. Annuitants already reemployed under a prior NDAA waiver could continue receiving unreduced salary through the not-to-exceed date of their existing appointment — but not beyond it.
Once an initial waiver has expired, the agency must request a new one and follow the same procedures as for an initial request. There is no renewal mechanism. If you are working under a waiver, find out its expiry date now and raise it early — because the answer is a fresh request under whichever authority still exists, and that may not be the one you came in under.
V The hour limits
The NDAA authority was never a route back to a full career. Appointments were limited to one year or less, and hours were capped three ways simultaneously:
| Limit | Cap |
|---|---|
| First six months after annuity commencement | 520 hours |
| First year after retirement | 1,040 hours |
| Any twelve-month period | 1,040 hours |
| Total under the authority, per annuitant | 3,120 hours |
The 3,120-hour lifetime cap is the one people miss. At 1,040 hours a year it is three years of half-time work, ever — and then the authority is exhausted for that individual.
VI What a waiver costs you
A waiver means full salary alongside full annuity. It is not free.
- No additional retirement coverage. Annuitants reemployed with a waiver are not eligible for further retirement coverage other than Social Security. The period builds nothing.
- No RIF protection. These are at-will employees who can be terminated whenever the agency chooses — outside the retention system entirely rather than badly placed within it.
- Leave, yes. Reemployed annuitants may earn both annual and sick leave during the reemployment.
- Insurance, conditionally. Generally available if the reemployment runs more than one year — which NDAA-route appointments, capped at a year, frequently did not.
Waiver: more cash now, no retirement accrual, no job protection, often no insurance. No waiver: much less cash now, but you remain inside the ordinary employment system. Which is better depends on whether you want income or a position — and the answer is usually clearer once the offset arithmetic above has been run honestly.
VII The playbook
| Situation | What to do |
|---|---|
| Offered federal reemployment | Ask immediately whether the salary will be offset. Assume yes unless told otherwise in writing. |
| Told a waiver is available | Ask which authority — the permanent one or an NDAA waiver already in place. |
| Expecting an NDAA waiver | That route closed on 31 December 2024. No new ones under it. |
| Already on an NDAA waiver | You may continue to your appointment's not-to-exceed date. Find that date. |
| Waiver expiring | There is no extension. A fresh request is required, under whatever authority still exists. |
| On a waiver | You are at-will with no RIF protection. Plan accordingly. |
| Hoping to build more pension | Waiver service earns no additional retirement coverage beyond Social Security. |
| Need health coverage | Generally requires reemployment of more than one year. Check before relying on it. |
| Weighing the offer | Compute the additional income, not the salary. They are very different numbers. |
| Any arrangement | Get the authority, the expiry date and the offset treatment in writing. |
Before returning to federal service
- Calculate the offset and the real additional income before anything else.
- Ask in writing whether your salary will be reduced by your annuity.
- If a waiver is offered, establish which statutory authority it rests on.
- Confirm the waiver's expiry date and your appointment's not-to-exceed date.
- Confirm whether the appointment exceeds one year, for insurance purposes.
- Accept that waiver service earns no additional retirement credit.
- Understand you will have no reduction in force protection.
- Check whether any hour caps apply to your appointment.
- Ask what happens at the end of the appointment.
- Verify the current authority with HR rather than relying on any published summary.
Frequently asked questions
Under the laws governing CSRS and FERS, a reemployed annuitant's salary is reduced by an amount equal to their retirement annuity. The rule sits in 5 U.S.C. 8344 for CSRS and 5 U.S.C. 8468 for FERS, with regulations in 5 CFR part 837, and it dates back to the Civil Service Retirement Act Amendments of 1956. The logic is that the government should not pay twice for the same person at the same time. The practical effect is that returning to federal work after retiring can add far less to your income than the advertised salary suggests.
Yes, through a dual compensation waiver, and there have historically been two separate routes. The permanent authority was created by section 108 of Public Law 101-509, the Federal Employees Pay Comparability Act of 1990, codified at 5 U.S.C. 8344(i) and 8468(f), with OPM regulations now found in 5 CFR part 553. A separate temporary authority allowed agency heads to grant their own waivers on a limited basis. The two operate differently and it matters which one an agency is using.
It expired. Section 1122 of the National Defense Authorization Act for Fiscal Year 2010 allowed agency heads to grant their own dual compensation waivers on a temporary basis, and it was extended by section 1117 of the NDAA for Fiscal Year 2020 for executive branch agencies through 31 December 2024. The 2025 NDAA did not include a dual compensation waiver provision, so no new waivers could be approved under that authority after that date. Annuitants already reemployed under a prior NDAA waiver could continue receiving unreduced salary through the not-to-exceed date of their appointment.
Appointments were limited to one year or less, and the hours were capped in three ways at once. An annuitant could work 520 hours during the first six months following the commencement of the annuity, with a maximum of 1,040 hours during the first year after retirement; 1,040 hours during any twelve-month period; and 3,120 total hours under the authority across the annuitant's lifetime. Requests also had to rest on one of a set of permissible reasons and were typically accompanied by a written statement that the individual would not accept the position without the waiver.
No. Annuitants reemployed with a salary offset waiver are not eligible for additional retirement coverage, other than Social Security coverage. You are paid your full salary alongside your full annuity, but the reemployment period is not building any further federal retirement benefit. That is a meaningful trade: the same period worked without a waiver would be offset in salary but could, depending on the circumstances, contribute to your retirement position.
No, and this is the trade-off people most often overlook. Reemployed annuitants under a salary offset waiver do not have reduction in force protection. They are at-will employees who can be terminated whenever the employing agency chooses. Given that performance-based RIF retention rules changed substantially in 2026, this matters more than it once did — you are outside that system entirely rather than positioned badly within it.
Leave, yes. Reemployed annuitants may earn both annual and sick leave during the period of their reemployment. Insurance depends on duration: generally, if the reemployment is for more than one year, benefits coverage is available regardless of whether the individual has coverage as an annuitant. Since NDAA-route appointments were limited to a year or less, that condition frequently was not met, which is another reason the details of the specific authority matter.
No. Once an initial waiver has expired, the agency must request a new one and follow the same procedures as for an initial waiver or delegation of waiver authority. There is no extension mechanism. If you are working under a waiver, know its expiry date and raise the question well before it arrives, because the answer is a fresh request rather than a renewal and the availability of the authority itself may have changed in the meantime.