OPM Disability Retirement under FERS or CSRS: The 1-Year Statute of Limitations

The general rule for applying for federal disability retirement under the Federal Employees Retirement System (FERS) or Civil Service Retirement System (CSRS), is that a federal or postal employee must apply for disability retirement within one (1) year of being “separated from Federal Service.” This is legally established in 5 USC 8337(b), where it specifically states that the Office of Personnel Management may receive and review a claim “only if the application is filed with the Office before the employee or Member is separated from service or within 1 year thereafter”, and in 5 CFR (“Code of Federal Regulations”) Section 844.201, “an application for disability retirement is timely only if it is filed with the employing agency before the employee or Member separates from the service, or with the old employment agency or OPM within 1 year thereafter”. This is the “statutory rule”, as explicitly stated in “the law”.

However, as with all laws, there may be exceptions, not only as set forth in the statute itself, but also, as modified by a judge in federal court. It is important to know this last “modification” and “interpretation” of a law, precisely because such “organic interpretations” of the law are both “law” and the law itself. The statute itself allows an exception to the “1-year rule” (that a federal or postal employee must file an application for federal disability retirement under FERS or CSRS while employed by the federal government, or within one (1) year being separated from Federal Service) – that exception is that the Office of Personnel Management may waive the 1-year statute of limitations “if the employee or member is mentally incompetent on or within 1 year after the date of separation, at which time case the individual or their representative must file the application with the previous employment agency or OPM within 1 year after the date the individual regains competence or a court appoints a fiduciary, whichever comes first.” In simple and practical terms, this means that if a person, within the time needed to apply for federal disability retirement benefits, is committed to a psychiatric institution, the 1-year rule does not begin until the person regains competence.

However, there is another exception to the 1-year rule, and it is this exception that is important to know about. There are many times when a federal or postal employee is never informed of their separation from the federal government or the postal service. Such individuals often follow a similar pattern or paradigm: a federal or postal employee is injured or medically unable to perform their job. He is determined to be eligible for Federal Workers’ Compensation benefits (Department of Labor, OWCP benefits under FECA) and remains in Federal Service while receiving OWCP benefits. A couple of years go by. Maybe it will be more than a couple of years. The Agency, realizing that the Federal or Postal employee will not return, “separates” the individual from Federal Government or Postal Service service.

However, the problem occurs, and this problem occurs all too often, when the federal or postal employee is never informed of the separation. Why is this happening? Mainly because the ones on the OWCP lists, after a while, they are forgotten. At the same time, because the Federal agency or the Postal Service needs to fill the “job position” with a working person, they simply initiate a standard Form 50 and separate the person from the Federal Service.

In fact, this is precisely what happened in the case of Johnston v. OPM, 413 F.3d 1339 (United States Court of Appeals for the Federal Circuit, 2005), in which the Court granted an additional exception to the 1-year rule, stating that the “one-year time period established in 5 USC Section 8337(b) arises from the agency’s notification to the employee that he or she has been discharged for medical reasons.” In addition, the Court in Johnston cited 5 CFR Section 831.1205(b)(1), which states that when an agency “issues a decision to terminate an employee … but the termination is based on reasons apparently caused by a condition , the agency must inform the employee in writing of his or her possible eligibility for disability retirement. Emphasis is added to the word “apparently,” because a Federal Agency (and the Postal Service) often do not explicitly state that a person is being removed for a medical condition, even though all the facts and circumstances surrounding a Federal Agency Federal or Postal dismissal of the employee clearly and irrefutably establishes such basis.

Where does all this leave us? I receive numerous phone calls from people who have been on the Bureau of Workers’ Compensation lists, who have never applied for Federal Disability Retirement benefits under FERS or CSRS. Furthermore, they were never informed of their separation from Federal Service. Such former federal or postal employees begin inquiring about filing for federal disability retirement benefits because he or she is receiving indications that OWCP benefits will soon end. Such impending action on OWCP benefits will often prompt the former federal or postal employee to make some inquiries, and such inquiries often result in the discovery that he or she was separated from the Federal Service some years earlier.

Is it too late to apply for federal disability retirement benefits under FERS or CSRS? It all depends on the particular and unique facts and circumstances of each case. Whether a viable argument can be made in any particular case that an exemption from the “1-year rule” should be allowed depends on such unique facts and circumstances. Of course, the best alternative is to not have to make such an argument and instead apply for federal disability retirement benefits within a year of separating from federal service, or while still with the agency. To all federal and postal employees, a word of caution to the wise: stay on top of your own case; secure and meet deadlines; apply for your benefits under FERS and CSRS in a timely manner. However, if you believe you were never informed of your separation from federal service, but are entitled to federal disability retirement benefits, you should investigate. It may not be too late.