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Home Professional Development Transitioning to the Private Sector
Professional Development · Transition · Topic 40 · Updated August 2026

Transitioning to the Private Sector

Two separate problems arrive at once when you leave federal service, and most people only prepare for one. The first is what follows you out the door: 18 U.S.C. 207 does not stop you working for any particular employer, but it restricts what you may do for them — a lifetime ban on matters you touched personally, a two-year ban on matters that were merely under your authority, and for senior employees a one-year cooling-off period that is broader than either. The second is what you leave behind: vesting, a deferred annuity, and a five-year FEHB rule that ends retiree health coverage for anyone who breaks it. Both are timing problems, and both are easier to solve before you accept an offer than after.

Lifetime
Ban on matters you participated in personally and substantially
2 years
Ban on matters pending under your official responsibility
86.5%
Of Executive Schedule Level II — the senior employee pay threshold
5 years
Vesting for a deferred annuity — and the FEHB continuation rule
Read this first

This article is information, not legal advice. Post-employment analysis depends on what you personally worked on, what was under your official responsibility, your pay level, and what a new role would actually involve. Agency guidance commonly states that all employees should obtain post-government employment advice before leaving, and that former employees should keep contacting their former ethics official afterward. Do that before you accept anything.

I What section 207 actually restricts

Start with what it does not do, because the misconception is widespread and it costs people opportunities they could have taken.

The post-government employment statute does not prohibit former federal employees from working for any particular employer. It restricts what former employees can do for their new employers. Specifically, it restricts certain communications to and appearances before the government, made on behalf of another person, with intent to influence.

Three elements recur throughout, and understanding them makes the whole structure legible:

The one-sentence rule

Section 207 is a restriction on who you may talk to on whose behalf, not on who may employ you — which means the analysis is always about the specific activity in the specific role, and that is exactly why the answer has to come from your ethics official rather than an article.

Penalties for violations are real, running to substantial fines and to imprisonment. This is a criminal statute, which is why the conservative posture is the correct one.

II The lifetime ban

Under 18 U.S.C. 207(a)(1): if you participated personally and substantially in a particular matter involving specific parties in which the United States is a party or has a direct and substantial interest, you may never communicate with or appear before any employee of the United States on behalf of another person with intent to influence that matter.

Two defined terms carry the weight.

Particular matter involving specific parties means a matter focused on identified parties — contracts, cases, claims, investigations, grants, licenses, permits, applications, and litigation. It does not mean general policy or rulemaking of broad application.

Personally and substantially means you were actually involved, not merely aware or nominally responsible.

How broad "the matter" is

OGE guidance uses a pointed illustration: a contract as a whole is the particular matter. A dispute over any part of that contract triggers the lifetime ban — even if you worked on an entirely different provision. People underestimate this constantly, assuming their involvement was narrow enough not to count. The matter is defined by the contract, not by your paragraph of it.

The ban has no expiration and applies to all executive branch employees regardless of grade.

III The two-year ban

Under 18 U.S.C. 207(a)(2): for two years after leaving government, you may not communicate with or appear before the government on behalf of another person regarding a particular matter involving specific parties that was actually pending under your official responsibility during the one-year period before your departure.

The trigger here is authority rather than involvement. This is the provision that catches the senior manager who oversaw a division handling a contract or an enforcement action without getting into day-to-day decisions. The standard is whether you knew, or reasonably should have known, that the matter was pending under your authority.

The two clocks are worth keeping straight: the one-year lookback defines which matters are covered, and the two-year restriction runs from your departure from government.

If you did participate personally and substantially in the matter, the lifetime ban applies instead — the two-year ban covers the gap where the matter was under your responsibility but you did not personally work it.

IV The one-year senior cooling-off period

Under 18 U.S.C. 207(c): for one year after service in a senior position terminates, a former senior employee may not knowingly communicate with or appear before their former agency on behalf of another person with intent to influence.

The scope difference is what makes this restriction consequential, and it is frequently missed. The lifetime and two-year bans apply only to particular matters involving specific parties. The section 207(c) restriction applies to any matter on which you seek official action — including a matter that did not exist while you were in government.

OGE guidance gives examples of what that reaches: discussing broad policy options and expressing concern about regulatory changes an agency is considering. Neither involves specific parties. Neither would be restricted under the other bans. Both fall within 207(c).

 Lifetime 207(a)(1)Two-year 207(a)(2)One-year 207(c)
WhoAll employeesAll employeesSenior employees
DurationPermanent2 years from departure1 year from ceasing senior service
TriggerPersonal and substantial participationPending under your official responsibility in your last yearYour seniority alone
Scope of mattersParticular matters, specific partiesParticular matters, specific partiesAny matter on which you seek official action
Whom you may not contactAny U.S. employeeAny U.S. employeeYour former agency

Who is senior. Generally, employees at Executive Schedule Levels II through V and those paid at or above 86.5 percent of the rate for Executive Schedule Level II. A stricter one-year restriction under 207(d) applies to very senior employees at Executive Schedule Level I.

When the clock starts

The one-year period is measured from the date you cease to be a senior employee — not from the termination of government service, unless the two happen simultaneously. If you move from a senior position to a non-senior one and stay a year before leaving, the cooling-off period may already have run. That is a genuine planning option, and it is worth raising with your ethics official rather than assuming.

V Other restrictions that may apply

Section 207 is the general statute. Several others reach specific populations, and they operate in addition rather than instead.

The Procurement Integrity Act in particular catches people who assume section 207 is the whole picture. If you worked on a large acquisition, ask specifically about it by name.

Answer the questions below. The tool identifies which restrictions likely apply to your situation and what to raise with your ethics official. It is orientation for that conversation, not a substitute for it.

Post-Employment Restriction Navigator

What likely follows you out?

General framework only. Only your agency ethics official can apply this to your actual facts.

Your Pay Level
Did You Work Personally on Specific Contracts, Cases, Grants, or Investigations?
Were Such Matters Pending Under Your Authority in Your Last Year?
Did You Work on a Procurement Valued Over $10 Million?
Would the New Role Involve Contacting the Government?
Years of Federal Service
Answer the questions above...

How Long Each Restriction Lasts

Duration in years of each post-employment restriction after departure. The lifetime ban under 18 U.S.C. 207(a)(1) has no expiration and is shown at the axis maximum for scale. The one-year senior restriction is narrower in duration but broader in the matters it reaches.

VII Negotiating while still employed

A separate rule governs the period before you leave, and it is the one most likely to create a problem while you are still on the payroll.

Federal conflict-of-interest law restricts participating in official matters affecting an organization with which you are negotiating or have an arrangement concerning prospective employment. Once employment discussions with an entity begin, your ability to work on matters affecting that entity is constrained.

The practical sequence

The moment job discussions become concrete with an entity your work touches, tell your ethics official and recuse yourself in writing. Doing this proactively is ordinary and unremarkable. Doing it after someone else notices is a different conversation entirely — and the timing of your recusal, documented, is what protects you.

Related obligations may attach as well. Certain senior employees must file termination financial disclosure reports, and Procurement Integrity Act provisions require certain officials to report employment contacts. Financial disclosure obligations at departure are covered in Workplace Topic 41.

VIII Your annuity if you leave early

The pension question at departure has one branch point and one largely irreversible decision.

The branch point is five years. With at least five years of creditable civilian service you are vested, and you may leave your contributions in the retirement fund and claim a deferred annuity later — generally at age 62, or earlier under certain age and service combinations. With fewer than five years you are not vested, and a refund of your own contributions is generally your only option.

The irreversible decision is the refund. Taking a refund of your contributions forfeits the annuity right attached to that service. Recovering it later requires returning to federal service and making a redeposit — with interest that has compounded in the meantime. The redeposit mechanics are covered in Benefits Topic 16, and the deferred-versus-postponed distinction in Topic 11.

Why the refund is so often the wrong call

A refund returns your own contributions — a modest sum, since FERS employees contribute 0.8, 3.1, or 4.4 percent of pay depending on hire date. What it forfeits is a lifetime inflation-adjusted annuity the government largely funded. The refund looks like found money at a moment when you are thinking about a move. It is generally the most expensive dollar-for-dollar decision available at separation.

One further caution for anyone who might return: leaving before MRA means a deferred retirement rather than a postponed one, and deferred retirees permanently lose FEHB and FEGLI. That distinction turns on your age at separation, not on your intentions.

IX TSP, FEHB, and everything else

BenefitWhat happens when you separate
TSPBalance stays yours. You may leave it in TSP, roll it to an IRA or new employer plan, or take distributions subject to tax and possible penalties. The ultra-low expense ratios argue for leaving it.
FERS annuityDeferred annuity if vested at 5+ years; refund only if not. Refund forfeits the annuity right.
FEHBEnds. Carrying it into retirement requires an immediate annuity plus 5 continuous years of enrollment. TCC available for a limited period at full premium plus an administrative charge.
FEGLIEnds; conversion to an individual policy generally available on a limited timeline.
Annual leavePaid out in a lump sum at separation.
Sick leaveForfeited — no cash value, and it only converts to service credit at retirement.
Service creditPreserved if you leave contributions in; restorable on return.

The sick leave line is worth a moment. A large balance represents real value at retirement, where it converts to creditable service at 2,087 hours per year. On a resignation it simply disappears. That does not argue for burning it — but it does argue for understanding what a mid-career departure costs beyond the obvious.

The full separation checklist is in Benefits Topic 04, and the total-compensation comparison that should precede any offer decision is in Career & Pay Topic 42.

X The timing questions that decide the most

Almost everything above reduces to timing, and these are the questions worth answering before you commit to a date.

  1. Are you at five years? The vesting line. If you are close, the difference between leaving at four years and five is a lifetime annuity.
  2. Are you close to MRA? Separating before MRA means deferred rather than postponed retirement — and permanent loss of FEHB and FEGLI.
  3. Are you close to age 62 with 20 years? Crossing it raises the multiplier from 1.0 to 1.1 percent across your entire career.
  4. When did you cease to be a senior employee? The 207(c) clock runs from that date, not necessarily from departure.
  5. When does your two-year clock start? From departure — which makes the departure date itself worth being deliberate about.
  6. Have you been continuously enrolled in FEHB for five years? Only relevant if you might retire from federal service later.
  7. Is a within-grade increase or promotion pending? It raises your High-3 if you ever return and retire federally.

XI Translating federal experience

A separate and more mundane problem: federal résumés do not read well outside government, and the fix is mostly subtraction.

The one genuinely federal advantage worth naming: experience navigating a large, regulated, multi-stakeholder institution is exactly what government contractors, regulated industries, and consultancies hire for. Résumé construction is covered in Topic 35.

XII The playbook

SituationWhat to do
Considering an offerContact your ethics official before accepting. The analysis is fact-specific and free.
Job discussions with an entity your work touchesRecuse in writing immediately and tell your ethics official.
You are a senior employeeConfirm when you ceased to be senior — the 207(c) clock may run from that date.
You worked a procurement over $10MAsk about the Procurement Integrity Act by name. It is separate from section 207.
Under 5 years of serviceYou are not vested. Understand exactly what you forfeit before you go.
Offered a refund of contributionsAlmost never the right call if you are vested. It forfeits a lifetime annuity.
You might return to federal serviceLeave contributions in. Note that FEHB and FEGLI end at separation regardless.
New role has no government contactSection 207 largely restricts contact with government. Still confirm — other rules may apply.
Action checklist

Before you accept anything

  • Contact your agency ethics official for post-government employment advice. Agency guidance says to do this before you leave, and it costs nothing.
  • List every particular matter involving specific parties you worked on personally — those carry a lifetime ban.
  • List matters that were pending under your authority in your final year — those carry the two-year ban.
  • Confirm whether you meet the senior employee threshold, and when you ceased to be senior.
  • If you worked a procurement over $10 million, ask about the Procurement Integrity Act specifically.
  • If job discussions have started with an entity your work touches, recuse yourself in writing now.
  • Confirm whether you have five years of creditable service — the vesting line.
  • Do not take a refund of contributions if you are vested. It forfeits a lifetime annuity for a modest sum.
  • Understand that FEHB and FEGLI end at separation unless you retire on an immediate annuity with five continuous years of coverage.
  • Run your full federal total compensation against the offer before comparing salaries.
  • Keep your ethics official's contact details — you can and should keep asking after you leave.

Frequently asked questions

Generally no. The post-employment statute, 18 U.S.C. 207, does not prohibit former federal employees from working for any particular employer. What it restricts is what you may do for that employer — specifically, communicating with or appearing before the government on their behalf with intent to influence, on matters meeting certain conditions. Other authorities can limit permissible compensation in narrow circumstances, and specific statutes such as the Procurement Integrity Act impose their own restrictions. But the general shape of section 207 is a restriction on activity, not on employment.

Under 18 U.S.C. 207(a)(1), if you participated personally and substantially in a particular matter involving specific parties — a contract, case, claim, investigation, grant, permit, or similar matter focused on identified parties — you may never communicate with or appear before the government on behalf of another person with intent to influence that same matter. It has no expiration. OGE guidance illustrates its breadth: a contract as a whole is the particular matter, so a dispute over any part of it triggers the ban even if you worked on a different provision entirely.

Under 18 U.S.C. 207(a)(2), for two years after leaving government you may not communicate with or appear before the government on behalf of another person regarding a particular matter involving specific parties that was actually pending under your official responsibility during your last year of federal service. The trigger is that the matter was under your authority and you knew or reasonably should have known it was pending — not that you worked on it personally. If you did participate personally and substantially, the lifetime ban applies instead. The two-year clock runs from your departure.

Under 18 U.S.C. 207(c), for one year after leaving a senior position a former senior employee may not knowingly communicate with or appear before their former agency on behalf of another person with intent to influence. Its scope is broader than the lifetime and two-year bans in an important way: those apply only to particular matters involving specific parties, while the section 207(c) restriction applies to any matter on which you seek official action, including new matters that were not pending while you were in government — such as discussing broad policy options or expressing concern about regulatory changes under consideration.

Senior employees generally include those at Executive Schedule Levels II through V and employees paid at or above 86.5 percent of the rate for Executive Schedule Level II. A separate and stricter one-year restriction under 18 U.S.C. 207(d) applies to very senior employees at Executive Schedule Level I. The one-year clock for a senior employee runs from the date you cease to be a senior employee, not necessarily from the date you leave government — those differ if you move to a non-senior position before departing. Your agency ethics official can confirm your status.

If you have at least five years of creditable civilian service you are vested, and you may leave your contributions in the retirement fund and claim a deferred annuity later — generally at age 62, or earlier under certain age and service combinations. Taking a refund of your contributions instead is largely irreversible in its effect and forfeits that annuity right unless you later return and make a redeposit. If you have fewer than five years you are not vested and a refund is generally your only option. This is one of the highest-stakes and least reversible decisions in a departure.

Yes, unless you retire on an immediate annuity having been continuously enrolled in FEHB for the five years immediately before retirement. Simply separating from federal service does not carry FEHB with you. Temporary Continuation of Coverage is available for a limited period at the full premium plus an administrative charge, and a conversion option exists. If you leave and later return to federal service, the five-year clock for carrying coverage into retirement generally runs against the period immediately before you retire, which is what makes the timing of a departure and return consequential.

Your agency ethics official, before you accept anything. Agency guidance commonly states that all employees should obtain post-government employment advice before leaving federal service, and that former employees can and should continue to contact their former agency's ethics official afterward when questions arise. The analysis depends on what you personally worked on, what was under your official responsibility, your pay level, and what the new role would actually involve — which is a fact-specific determination no article can make for you.