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Pension cuts could affect government employees opting for voluntary retirement. Learn about the new penalties and how they might impact your pension if you choose to retire early.
New Penalties for Government Employees Taking Voluntary Retirement
The Finance Division has announced new rules regarding voluntary retirement for federal government employees. Here’s what you need to know:
What’s Changing?
- Penalties for Voluntary Retirement: If a government employee chooses to retire voluntarily, there will now be penalties affecting their pension.
- Details of the Penalties:
- Retirement After 25 Years: Employees can still choose to retire after completing 25 years of service. However, their pension will be reduced.
- Reduction Rate: The pension will be reduced by 3 percent for every year between the retirement date and the employee’s official retirement age. This reduction is based on the number of months completed.
- Maximum Reduction: The total reduction in the pension will be capped at 20 percent.
- Exceptions:
- For members of the Armed Forces and Civil Armed Forces, the penalties will only apply if they retire before reaching the required service rank.
- Immediate Effect: These new rules will replace previous instructions and will start applying immediately.
The new rules mean that employees who retire voluntarily will see a reduction in their pension, which will depend on how long before their official retirement age they choose to leave their job.
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