It is perhaps the worst nightmare of older cleared employees: with retirement on the horizon, something happens – an arrest, a security violation, or a positive drug test, for example – that threatens to jeopardize their security clearance.
Despite the wisdom and expertise gleaned from decades in the workforce, older workers are not immune to the personal or professional mistakes more often associated with their younger colleagues. With security clearance typically a condition of employment, a revocation of eligibility can result in termination of employment just a short time before hitting a key retirement milestone. As a result, many older workers who contact my office are concerned with their retirement first and their clearance second.
Will a Security Violation Tank Your Retirement?
Each case is fact-specific, but in assessing the extent to which we can salvage retirement-as-anticipated for an older worker suddenly facing clearance problems, we look initially at a couple key factors: (1) whether the clearance holder is a federal employee or contractor; and (2) the actual time until retirement.
The first distinction is important because retirement-age federal employees are focused on a date certain, while retirement-age contractors are focused on a number. Identifying the end goal can impact strategy.
Federal employees are required to reach a legally-mandated retirement age to the day before being eligible to begin immediately tapping their pension. This varies between age 57 and 62 for most employees outside certain fields like law enforcement and the foreign service. Miss it by just days and the result is a wait of years before being eligible for a pension.
Contractors, on the other hand, are generally not entitled to a pension. For these folks, the question is not one of reaching a specific date for the sake of reaching it (unless to draw Social Security), but whether retirement is financially feasible in light of an IRA or 401(k) balance.
Obviously, the longer one works, the more time that balance has to compound and be supplemented with employer and/or employee contributions before being tapped. But unlike their civil or foreign service brethren, contractors have other factors to consider. These include the potential of a severance package in exchange for a voluntary resignation; any opportunity for transfer into an uncleared role*; and the extent to which fighting a security clearance case might require taking an undesirable withdrawal from one’s retirement account.
Irrespective of whether or not we believe we can win the security clearance case, the best strategy for older federal employees is typically to slow-walk the process to the extent possible, taking advantage of all procedural due process steps and requesting extensions of time to respond – even if the employee has been placed on unpaid leave. That’s because under federal retirement rules, up to 6 months of unpaid leave counts as regular time worked for calculating retirement benefits. And in many cases, the employee is able to continue working for some time or obtain paid leave at least through the initial appeal stage, thereby buying additional time.
With DoD contractors – for whom a Statement of Reasons (SOR) is only a proposal to revoke their security clearance – a similar strategy is often effective. Most DoD contractors who have received an SOR can anticipate the ability to continue working with their clearance intact for 12-18 months before potentially seeing their clearance revoked. Security clearance suspensions while the administrative due process plays out are quite rare. Non-DoD contractors unfortunately have no such luck; a SOR for them typically means that their clearance has already been revoked and now they are looking at the immediate potential of either unpaid leave or termination.
Ultimately, all strategic considerations are dependent upon the actual time to retirement. Federal employees with a retirement date within 24 months, and contractors with a retirement date within 18 months from the first sign of clearance trouble can often salvage retirement-as-expected with the right strategy.
*In many federal agencies, all positions require a security clearance. Even in those that don’t, the agency has no legal obligation to transfer the employee to an uncleared position. Government contractors also have no obligation to transfer a once-cleared employee into an uncleared position, and many government contracts require that everyone working on the contract be cleared. However, some larger contractors have a commercial side of their business where transfer may be possible.
This article is intended as general information only and should not be construed as legal advice. Consult an attorney regarding your specific situation.
