Guides · Updated July 31, 2026
What Happens to Federal Employee Benefits After Resignation
See what happens to FEHB, FEGLI, TSP, leave, and your pension after you resign before retirement age, including deadlines that affect what you keep.
If you're worried that resigning means losing everything at once, federal employee benefits after resignation follow separate clocks instead of one cutoff. FEHB and FEGLI continue for 31 days at no extra premium, then you decide on Temporary Continuation of Coverage or conversion; your TSP balance stays invested but payroll contributions stop; unused annual leave is paid as a lump sum; sick leave is not cashed out; and a deferred FERS annuity is available only with at least five years of creditable civilian service.
This page covers voluntary resignation before retirement eligibility, not retirement or a reduction in force. Those paths use different rules. This is general information, not legal or financial advice; confirm your dates with your agency's benefits office.
What happens to each benefit when you resign
Each federal benefit follows its own rules once you leave, so here's a quick reference for what continues, what stops, and the deadline that matters for each one.
| Benefit | What happens after you resign | Deadline or timeframe |
|---|---|---|
| FEHB health insurance | Stays active at no cost for 31 days, then you can convert to an individual plan or enroll in Temporary Continuation of Coverage (TCC) | TCC can run up to 18 months; you pay the full premium (your share plus the government's) plus a 2% fee |
| FEGLI life insurance | Continues free for 31 days after separation, then you can convert to an individual whole-life policy with no medical exam | Request conversion within 31 days of your agency's notice, or 60 days after separation, whichever comes first |
| TSP savings | You keep everything vested, your own contributions, any matching funds, and all earnings, and the balance stays invested | Payroll contributions stop on your last day; you can no longer add money directly, only through rollovers |
| Annual leave | Paid out in one lump sum for any hours you haven't used | Paid as a lump sum after separation; your agency's payroll office sets the timing |
| Sick leave | Not paid out, but it stays on your record and can be restored if you return to federal service later | No cash value now, but no expiration on the balance either |
| Retirement credit / pension | Preserved if you have 5+ years of creditable civilian service; you can leave your contributions in place for a deferred annuity later | Under 5 years means no deferred annuity; you can request a refund of your contributions instead |
Why TCC costs more than your paycheck deduction
After resignation, FEHB includes a 31-day extension of coverage without contributions. Temporary Continuation of Coverage, or TCC, can extend access to an FEHB plan after that window, but it changes who pays the bill.
OPM explains that TCC enrollees pay the full premium for the plan they choose, including both the employee and government shares, plus a 2 percent administrative charge. That is why the cost can be far higher than the deduction that appeared on a federal paycheck: the agency contribution no longer applies after separation.
TCC is a temporary bridge, not a continuation of active employment or an agency subsidy. Ask for the enrollment information promptly, because TCC coverage and premiums begin on the 32nd day after regular FEHB coverage ends, and delayed paperwork can lead to a retroactive bill.
How FEGLI conversion works after separation
FEGLI also provides a short continuation period after group coverage ends, followed by a conversion decision. The FEGLI Handbook describes conversion as a way to move eligible group coverage to an individual policy without a medical examination.
Your agency should provide a Notice of Conversion Privilege, SF 2819. The notice matters because the conversion right has a limited application period: generally, the deadline is 31 days after receiving the notice or 60 days after separation, whichever comes first.
Conversion does not mean you keep the same federal group plan or the same premium. An individual policy has its own terms and pricing, so compare the offer carefully before the deadline rather than assuming it will match the coverage you had as an employee.
What changes with your TSP when you resign
Resignation does not close a Thrift Savings Plan account. TSP says separated employees may keep their savings in the plan, continue managing investments online, and leave the money invested until required minimum distributions apply.
The payroll connection ends when federal employment ends. TSP states that, once you leave the federal government, you can no longer make employee contributions. Agency contributions tied to active pay status also stop, so the account can remain invested without receiving new money through federal payroll.
That boundary is important when comparing a new job offer. A private employer's retirement plan may offer new contribution opportunities, but it does not restart federal payroll contributions or agency matching in the TSP.
What resignation before retirement eligibility means for a pension
Leaving before retirement eligibility does not automatically erase prior FERS service. Under the deferred-retirement rule, an employee who completes five years of creditable civilian service and separates may be entitled to a deferred annuity beginning the first day of the month after reaching age 62.
Five years is a threshold for this deferred-annuity path, not a promise of an immediate pension after resigning. Employees with at least 10 years of service may have additional deferred-retirement options based on their age and chosen commencement date, so the timing deserves individual review before making a final election.
An ordinary resignation should also be kept separate from retirement and a reduction in force. Those routes can involve different eligibility rules and timing, so a resignation does not by itself provide early-retirement treatment associated with another type of separation.
After you understand the benefits tradeoffs, the next practical question may be where your federal experience fits next. You can translate your federal experience and find matched private-sector roles on FedUp.work as an optional career-transition step, not as a benefits solution. The resignation itself is covered in federal employee resignation and what to include in a federal employee resignation letter.
Sources and further reading
- OPM: I'm leaving Federal Service (not retiring): OPM's reader page for FEHB, FEGLI, and related coverage choices when you separate without retiring.
- OPM: Leaving the Government: OPM retirement FAQ on refunding deductions versus leaving them in place after you separate.
- OPM Temporary Continuation of Coverage Pamphlet (RI 79-27): OPM's official guide to the 31-day FEHB extension and TCC enrollment, including the full premium plus 2% fee you pay for continued coverage.
- OPM FEGLI Handbook: Covers the 31-day free extension and the window for converting FEGLI to an individual policy after you separate.
- TSP Fact Sheet 29: Leaving Federal Employment: Official TSP guidance on which contributions stop and what stays invested once you separate from federal service.
- 5 CFR 842.212: Deferred Retirement: The federal regulation setting the 5-year creditable service threshold needed for a deferred annuity starting at age 62.
- 5 CFR 890.401: FEHB Extension and Conversion: The regulation behind FEHB's 31-day no-cost extension and your right to convert to an individual health policy.
- DoD Paid Time Off Treatment upon Separation FAQs: Federal guidance on how unused annual leave gets paid out, and why sick leave stays on record instead of being cashed out.
Common questions about benefits after resigning
Do I lose my federal pension if I resign?
For FERS employees, resigning after five years of creditable civilian service can leave a deferred annuity available at age 62. Resigning does not create an immediate pension.
What does the 5-year rule mean for federal employees?
Under the FERS deferred-retirement rule, five years of creditable civilian service is the minimum for a deferred annuity starting the month after you turn 62.
How long does health insurance last after I resign?
FEHB includes a 31-day temporary extension after regular coverage ends. Eligible former employees can use Temporary Continuation of Coverage for up to 18 months and pay the full premium plus a 2 percent administrative charge.
What happens to my TSP when I leave federal service?
You can keep your TSP account, leave the balance invested, and manage investments online. Once you leave federal service, you can no longer make employee contributions through federal payroll.
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