Discontinued Service Retirement: What is it?

Discontinued Service Retirement (DSR) is the only type of federal retirement that isn’t voluntary. You become eligible for DSR if you are separated against your will for reasons other than “misconduct or delinquency” and you meet the age and service requirements, which are:

• 50 years of age and 20 years of service
• Any age and 25 years of service

*In both these cases, at least 5 of the years of service must be creditable civilian service.

The Office of Personnel Management makes the final determination as to whether the separation is involuntary. The following actions are generally considered to be involuntary:

• Reduction-in-Force (RIF)
• Lack of funds
• Abolishment of position
• Expiration of incumbent’s term of office
• Unacceptable performance (unless due to misconduct)
• Transfer of function outside of commuting area
• Reassignment outside of the commuting area where no mobility agreement exists
• Failure to continue to meet qualification requirements of the position (provided separation is non-disciplinary and action is initiated by the agency)
• Separation during probation because of failure to qualify due to performance (not misconduct)
• Separation of a National Guard technician because of loss of military membership or the rank required to hold the National Guard position
• Removal from Sr. Executive Service for less than fully successful performance (under Title 5, U.S.C., Ch. 43, Subchapter II)

There is a distinct differentiation between separation due to unacceptable performance and separation due to misconduct. If you “can’t do”, you are more likely to be eligible for DSR than if you “won’t do”.

Even if your separation meets the above criteria, you won’t be able to be eligible for DSR if you decline a reasonable offer of a position. An offer is considered reasonable if it’s in the same agency, same commuting area, same tenure group and within 2 grades of your previous position.

DSR, like early retirement, provides for a 2% per year (1/6 of 1% per month) reduction in your pension for each year you are under age 55 if you are CSRS. A FERS DSR retiree (who isn’t a special category employee) will face no age-based reduction in pension but will not be eligible for cost-of-living adjustments until age 62.

For you to be eligible to retire under DSR provisions for either unacceptable performance or disability or illness, you must have received a decision of removal by your agency.