When determining the order of retention in a reduction in force under this part, an agency must classify competing employees on the appropriate retention register on the basis of four factors (tenure of employment, performance, veterans' preference, and length of service) as follows:

(a) By tenure group, with the competitive service tenure group and the excepted service tenure group listed on separate retention registers;

(b) Within each tenure group, by performance credit in descending order as determined in § 351.503, as augmented by veterans' preference as described in § 351.504;

(c) When two or more competing employees have the same performance credit, as augmented by veterans' preference as described in § 351.504, the competing employees are further ranked in descending order by tenure subgroups (as described in § 351.502), with tenure subgroup I listed ahead of tenure subgroup II, and then by years of service beginning with the earliest service computation date, as computed under § 351.505.

(a) Competitive service. Tenure groups and subgroups in the competitive service are defined as follows:

(1) The competitive service tenure group includes all employees in competitive service tenure subgroups I or II.

(2) Competitive service tenure subgroup I includes each career employee (as that term is used in part 315 of this chapter) in the competitive service who, as of the date the employee receives a specific reduction in force notice, is not serving an initial probationary period. The following employees are in competitive service tenure subgroup I as soon as the employee completes any required probationary period for initial appointment:

(i) An employee for whom substantial evidence exists of eligibility to acquire status and career tenure immediately, and whose case is pending final resolution by OPM (including cases under Executive Order 10826 to correct certain administrative errors);

(ii) An employee who acquires competitive status and satisfies the service requirement for career tenure when the employee's position is brought into the competitive service;

(iii) An administrative law judge appointed prior to establishment of excepted service schedule E and who remains in the competitive service;

(iv) An employee appointed under 5 U.S.C. 3104, which provides for the employment of specially-qualified scientific or professional personnel, or a similar authority; and

(v) An employee who acquired status under 5 U.S.C. 3304(c) on transfer to the competitive service from the legislative or judicial branches of the Federal Government.

(3) Competitive service tenure subgroup II includes each employee in the competitive service who, as of the date the employee receives a specific reduction in force notice, is not in competitive service tenure subgroup I and is not serving an initial probationary period or a temporary appointment of 1 year or less under subpart D of part 316 of this chapter.

(b) Excepted service. Tenure groups and subgroups in the excepted service are defined as follows:

(1) The excepted service tenure group includes all employees in excepted service tenure subgroups I or II.

(2) Excepted service tenure subgroup I includes all employees occupying a career position (as defined in part 213 of this chapter) in the excepted service who, as of the date the employee receives a specific reduction in force notice, are not serving a trial period and whose appointment carries no restriction or condition such as conditional, indefinite, or specific time limit.

(3) Excepted service tenure subgroup II includes all other employees occupying a career position (as defined in part 213 of this chapter) in the excepted service who, as of the date the employee receives a specific reduction in force notice, are not serving a trial period and who are not serving in a temporary or time-limited appointment of 1 year or less.

(a) Calculation of performance credit. Determine each competing employee's performance credit as follows:

(1) For each rating used, assign a numerical value as follows in conjunction with the patterns of summary level in 5 CFR 430.208(e): 7 for a Level 5 (Outstanding or equivalent) summary level, 5 for a Level 4 (Exceeds Fully Successful or equivalent) summary level, 3 for a Level 3 (Fully Successful or equivalent) summary level, 0 for a Level 2 (Minimally Satisfactory or equivalent) summary level, 0 for a Level 1 (Unacceptable) summary level.

(2) Sum the values assigned for each rating.

(b) Ratings used. (1) Subject to paragraph (c)(3) of this section, only ratings of record may be used as the basis for classifying an employee's performance in a reduction in force.

(2) For competing employees who received ratings of record while covered by part 430, subpart B, of this chapter, the summary levels assigned for those ratings of record must be used to establish the employee's performance credit in a reduction in force in accordance with paragraph (a) of this section (as augmented by veterans' preference in accordance with § 351.504).

(3) For competing employees who received performance ratings while not covered by the provisions of 5 U.S.C. chapter 43 and subpart B of part 430 of this chapter, those performance ratings must be considered ratings of record with summary levels for designating an employee's performance credit in a reduction in force only when the agency conducting the reduction in force determines, in its sole discretion, that those performance ratings are equivalent to ratings of record under the provisions of § 430.201(c).

(c) Consideration of performance. (1) A competing employee's entitlement to performance consideration under this subpart must be based on the employee's three most recent summary level ratings of record received during the 4-year period prior to the date of issuance of reduction in force notices, except as otherwise provided in this section.

(2) To provide adequate time to determine employee performance credit, an agency may provide for a cutoff date, a specified number of days prior to the issuance of reduction in force notices after which no new ratings of record will be put on record and used for purposes of this subpart. When a cutoff date is used, an employee's performance credit will be based on the three most recent ratings of record received during the 4-year period prior to the cutoff date.

(3) To be considered for purposes of this subpart, a rating of record and its assigned summary level (including any adjustments to performance consistent with this subpart) must have been issued to the employee, with all appropriate reviews and signatures, and must also be on record (i.e., the rating of record is available for use by the office responsible for establishing retention registers).

(4) The use of performance ratings of record and assigned summary levels (including any adjustments to performance) for purposes of this subpart must be uniformly and consistently applied within a competitive area, and must be consistent with an agency's appropriate issuance(s) that implement this part. Each agency must specify in its appropriate issuance(s):

(i) The conditions under which a rating of record is considered to have been received for purposes of determining whether it is within the 4-year period prior to either the date the agency issues reduction in force notices or the agency-established cutoff date for ratings of record, as appropriate; and

(ii) If the agency elects to use a cutoff date, the number of days prior to the issuance of reduction in force notices after which no new ratings of record will be put on record and used for purposes of this subpart.

(d) Single rating pattern. If all competing employees in a reduction in force competitive area have received ratings of record under a single pattern of summary levels as set forth in § 430.208(e), an agency must calculate performance credit as described in paragraph (a) of this section, except that an agency may, in its sole and exclusive discretion, assign additional points for performance for employees covered under a summary level appraisal system in which the highest summary level is a level “3” rating (i.e., a pattern A 'pass/fail', or pattern D system authorized under § 430.208(d) of this chapter, as in effect prior to the final rule published at 91 FR 41521 (July 7, 2026)), subject to the following limitations:

(1) An agency may, in its sole and exclusive discretion, assign additional points to level “3” employees with demonstrated exceptional performance if, within the 4-year period prior to either the date the agency issues reduction in force notices or the agency-established cutoff date for ratings of record, the agency has applied performance-related criteria and taken an action that recognizes the employee's exceptional performance. Such actions may include awarding an employee: the highest Agency or Departmental award (such as a Secretary's or Chairman's award), a special act or service award, a quality step increase, or other performance awards or bonuses (e.g., a 'time-off' for demonstrated performance above expectations).

(2) An agency may determine, in its sole and exclusive discretion, whether to give more weight to the performance-related action(s) described in paragraph (d)(1) of this section for purposes of differentiating performance on a retention register. Points may be added to the value assigned for the rating of record on an annual basis or as a single addition to the calculated performance credit.

(3) An agency that chooses to assign additional credit for performance must specify and document, in advance of the reduction in force, how it will prioritize performance awards for these purposes and make these criteria readily available for review.

(e) Multiple rating patterns. (1) If an agency has employees in a competitive area who have ratings of record under more than one pattern of summary levels, as set forth in § 430.208(e), it may, in its sole and exclusive discretion, elect to provide additional retention credit for performance in accordance with the following:

(i) An agency may transmute or assign an employee a higher summary level rating than what he or she received under their previous appraisal system only when there is documented evidence of exceptional or higher level performance as evidenced by an employee who received the highest Agency or Departmental award (such as a Secretary's or Chairman's award), a quality step increase, or appraisal performance awards or bonuses (e.g., a “time-off” for demonstrated performance above expectations in lieu of a cash bonus); and

(ii) If an agency chooses to provide additional retention credit for performance in accordance with paragraph (e)(1)(i) of this section, it must specify and document, in advance of the reduction in force, the basis on which it will transmute an employee's rating; i.e., the agency must describe how it will translate evidence of documented exceptional performance to a higher performance rating under the appraisal system (i.e., pattern of summary level) being applied to the reduction in force, make these criteria readily available for review, and apply them consistently to all competing employees.

(2) An agency that elects to provide additional retention credit to competing employees in accordance with paragraph (e)(1)(i) of this section must transmute the rating of the employee who meets the criteria set forth in that paragraph to the highest summary level of the pattern summary level being applied to the reduction in force (i.e., a level “4” rating if the agency conducting the reduction in force uses a pattern C or G summary level appraisal system, or a level “5” rating if the agency uses a pattern B, E, F, or H summary level appraisal system, as authorized under § 430.208(d) of this chapter, as in effect prior to the final rule published at 91 FR 41521 (July 7, 2026)). An agency cannot transmute a rating to a summary level which is not among those in the pattern being applied to the reduction in force.

(3) In situations in which the agency conducting the reduction in force is using a pattern summary level rating appraisal system with a summary level no higher than a level “3” (i.e., a pass/fail system) but has employees rated previously under a pattern with higher summary levels, the agency may, in its sole and exclusive discretion, elect to give more performance credit to the employees with the higher summary ratings than it gives to summary level “3” employees with no documented evidence of exceptional performance (before augmenting for veterans' preference in accordance with § 351.504).

(f) Missing ratings. Use of performance ratings for competing employees who do not have three actual ratings of record during the 4-year period prior to the date of issuance of reduction in force notices or the 4-year period prior to the agency-established cutoff date for ratings of record permitted in paragraph (c)(2) of this section must be determined under paragraph (c) of this section, as appropriate, and as follows:

(1) The performance credit of an employee who has not received any rating of record for any year during the 4-year period must be based on the modal rating as defined in § 351.203 for the summary level pattern that applies to the employee's official position of record at the time of the reduction in force.

(2) For an employee who has received two previous ratings of record during the 4-year period calculate the performance credit by using a proxy value for the missing rating. Calculate the proxy value by adding the assigned values for the two actual ratings of record and dividing by 2, with the result being either (1) a whole number or (2) a number with .5 decimal value. The performance credit is the sum of the value for the missing rating (i.e., the proxy value) and the values for the two actual ratings.

(3) For an employee with only one actual rating of record during the period, calculate the performance credit by multiplying the points assigned for that rating of record times three.

[91 FR 49220, Aug. 3, 2026; 91 FR 54795, Aug. 25, 2026]

(a) Veterans' preference for both competitive and excepted service employees is applied as follows:

(1) Each preference eligible employee who has a compensable service-connected disability of 30 percent or more receives an additional 5 points added to their performance credit. These employees must be identified as being in veterans' preference Subgroup AD on the retention register.

(2) Every other preference eligible employee receives an additional 3 points added to their performance credit. These employees must be identified as being in veterans' preference Subgroup A on the retention register.

(3) Non-preference eligible employees receive 0 additional points added to their performance credit. These employees must be identified as being in veterans' preference Subgroup B on the retention register.

(b) A retired member of a uniformed service is considered a preference eligible under this part only if the member meets at least one of the conditions of the following paragraphs (b)(1), (2), or (3) of this section, except as limited by paragraph (b)(4) or (b)(5):

(1) The employee's military retirement is based on disability that either:

(i) Resulted from injury or disease received in the line of duty as a direct result of armed conflict; or

(ii) Was caused by an instrumentality of war incurred in the line of duty during a period of war as defined by 38 U.S.C. 101 and 301.

(2) The employee's retired pay from a uniformed service is not based upon 20 or more years of full-time active service, regardless of when performed but not including periods of active duty for training.

(3) The employee has been continuously employed in a position covered by this part since November 30, 1964, without a break in service of more than 30 days.

(4) An employee retired at the rank of major or above (or equivalent) is considered a preference eligible under this part if such employee is a disabled veteran as defined in 5 U.S.C. 2108(2) and meets one of the conditions covered in paragraphs (b)(1), (2), or (3) of this section.

(5) An employee who is eligible for retired pay under 10 U.S.C. chapter 67 and who retired at the rank of major or above (or equivalent) is considered a preference eligible under this part at age 60, only if such employee is a disabled veteran as defined in 5 U.S.C. 2108(2).

(a) All civilian service as a Federal employee, as defined in 5 U.S.C. 2105(a), is creditable for purposes of this part. Civilian service performed in employment that does not meet the definition of Federal employee set forth in 5 U.S.C. 2105(a) is creditable for purposes of this part only if specifically authorized by statute as creditable for retention purposes.

(b)(1) As authorized by 5 U.S.C. 3502(a)(A), all active duty in a uniformed service, as defined in 5 U.S.C. 2101(3), is creditable for purposes of this part, except as provided in paragraphs (b)(2) and (b)(3) of this section.

(2) As authorized by 5 U.S.C. 3502(a)(B), a retired member of a uniformed service who is covered by § 351.504(b) is entitled to credit under this part only for:

(i) The length of time in active service in the Armed Forces during a war, or in a campaign or expedition for which a campaign or expedition badge has been authorized; or

(ii) The total length of time in active service in the Armed Forces if the employee is considered a preference eligible under 5 U.S.C. 2108 and 5 U.S.C. 3501(a), as implemented in § 351.504(b).

(3) An employee may not receive dual service credit for purposes of this part for service performed on active duty in the Armed Forces that was performed during concurrent civilian employment as a Federal employee, as defined in 5 U.S.C. 2105(a).

(c)(1) The agency is responsible for establishing the service computation date applicable to each employee competing for retention under this part. If applicable, the agency is also responsible for adjusting the service computation date to withhold retention service credit for non-creditable service.

(2) The service computation date includes all actual creditable service under paragraph (a) and paragraph (b) of this section.

(d) The service computation date is computed on the following basis:

(1) The effective date of appointment as a Federal employee under 5 U.S.C. 2105(a) when the employee has no previous creditable service under paragraph (a) or (b) of this section; or if applicable,

(2) The date calculated by subtracting the employee's total previous creditable service under paragraph (a) or (b) of this section from the most recent effective date of appointment as a Federal employee under 5 U.S.C. 2105(a).

(a) The agency is responsible for maintaining correct personnel records that are used to determine the retention standing of its employees competing for retention under this part.

(b) The agency must allow its retention registers and related records to be inspected by:

(1) An employee of the agency who has received a specific reduction in force notice, and/or the employee's representative if the representative is acting on behalf of the individual employee; and

(2) An authorized representative of OPM.

(c) An employee who has received a specific notice of reduction in force under the authority of subpart H of this part has the right to review any completed records used by the agency in a reduction in force action that was taken, or will be taken, against the employee, including:

(1) The complete retention register, if applicable, with the released employee's name and other relevant retention information (including the names of all other employees listed on that register, the employee's performance credit calculated under § 351.503 as augmented by veterans' preference under § 351.504, and the employee's service computation date under § 351.505), so that the employee may consider how the agency constructed the competitive level, and how the agency determined the relative retention standing of the competing employees; and

(2) The complete retention registers, if applicable, for other positions that could affect the composition of the employee's competitive level, and/or the determination of the employee's assignment rights (e.g., registers to which the released employee may have potential assignment rights under § 351.701(b)).

(d) An employee who has not received a specific reduction in force notice has no right under this section to review the agency's retention registers and related records. This paragraph does not limit any right of access available under another statute or regulation.

(e) The agency is responsible for ensuring that each employee's access to retention records is consistent with both the Freedom of Information Act (5 U.S.C. 552), and the Privacy Act (5 U.S.C. 552a).

(f) The agency must preserve all registers and records relating to a reduction in force for at least 2 years after the date it issues a specific reduction in force notice.

[91 FR 49220, Aug. 3, 2026; 91 FR 54795, Aug. 25, 2026]

(a) The retention standing of each employee released from a competitive level in the order prescribed in § 351.601 is determined as of the date the employee receives a specific reduction in force notice.

(b) The retention standing of each employee retained in a competitive level as an exception under § 351.606(b), § 351.607, or § 351.608 is determined as of the date the employee receives a specific reduction in force notice, irrespective of when the employee would have been released had the exception not been used. The retention standing of each employee retained under any of these provisions remains fixed until completion of the reduction in force action which resulted in the temporary retention.

(c) When an agency discovers an error in the determination of an employee's retention standing, it must correct the error and adjust any erroneous reduction in force action to accord with the employee's proper retention standing as of the effective date established by this section.