A deferred resignation lets you agree to leave federal service on a future date. Until that date you usually stay on the rolls, often on paid administrative leave. The best-known example is OPM's 2025 Deferred Resignation Program (DRP): employees who accepted generally stayed on paid administrative leave, with pay and benefits, until a resignation date of September 30, 2025. Those retiring could separate as late as December 31, 2025. That program is closed, but agencies have since run their own versions with different terms. Treat any new offer as its own contract and read it line by line.

What actually happens during the deferral

While you're in a deferred period you are still a federal employee. In the 2025 program that meant:

  • Pay continues on your normal schedule while you're on administrative leave.
  • Service credit keeps accruing. Time in a pay status counts toward your FERS service, so the deferral can push you over a 10-, 20-, 25- or 30-year line.
  • Benefits continue. FEHB, FEGLI and your other elections stay in place, and premiums keep coming out of your paycheck.
  • Leave status matters. Some offers place you on administrative leave immediately; others let you keep working for a time. Ask whether annual leave keeps accruing and how unused leave will be paid out.

The specific terms (end date, leave status, outside-work rules, what happens if funding changes) come from the agreement you sign, not from a general rule. Get them in writing.

How it interacts with your retirement options

A deferred resignation is a separation, not a retirement type. What you receive afterward depends on your age and service on your separation date:

  • Retirement-eligible on that date: if you'll meet an optional retirement (MRA with 30 years, 60 with 20, 62 with 5), MRA+10, or a VERA the agency is offering, you can usually retire instead of simply resigning. Retiring keeps an immediate annuity, and with it FEHB, if you've met the five-year rule.
  • Not yet eligible: you resign with a deferred annuity. It starts at your MRA with 30 years, at 60 with 20, at 62 with 5, or at your MRA reduced 5% per year under 62 if you have at least 10 years. A deferred annuity carries no FERS Supplement, and FEHB and FEGLI don't continue into it.
  • Close to a threshold: because service accrues during the deferral, check the exact date you cross your MRA or a service milestone. A separation date a few weeks later can turn a deferred annuity into an immediate one.

Use the Early-out options panel in the What-If Simulator to compare a VSIP or deferred exit against VERA and MRA+10 at your separation age.

TSP during and after the deferral

As long as you're receiving federal pay, your TSP payroll contributions and agency contributions generally continue as they do for any employee in a pay status. Confirm this with your agency payroll office for your specific offer.

After you separate you can leave your money in the TSP, take installments, or roll it over. If you separate in or after the year you turn 55, withdrawals from the TSP aren't subject to the 10% early-withdrawal tax. Moving the money to an IRA before 59½ can lose that protection.

Questions to ask before you sign

  1. What is my exact separation date, and is it guaranteed?
  2. Will I be on administrative leave, working, or a mix? Can I take outside employment during the deferral?
  3. Will I reach my MRA or a 20-, 25- or 30-year service mark before separation? Can the date be adjusted so I retire instead of resign?
  4. Is a VERA or VSIP offered alongside, and can I combine them?
  5. How will annual leave be paid out, and does it keep accruing?
  6. Do I meet the FEHB and FEGLI five-year rule as of the separation date?
  7. What happens to the agreement if I find another federal job, or the agency changes the program?

A deferred resignation can be a good bridge to retirement, or an expensive way to give up health coverage. The difference is usually a date on a form, so run the numbers and get HR's answers in writing before you commit.