To allow agencies to offer certain Federal employees an opportunity to take early retirement without having to remain subject to the otherwise applicable reduction, based on age, after attaining age 55.

Authorizes the head of a Federal agency to offer early retirement to employees of such agency: (1) in any component thereof; (2) in any occupation; (3) in any geographic location; or (4) in any combination of the three.

Redetermines the reduction in retirement benefits for such employees caused by such early retirement based on the age the employee attains on his or her next birthday after the commencement of such employee's annuity.

Sets forth conditions for early retirement under this Act, including acceptance of early retirement during an election period chosen by the employer. Makes eligible for such early retirement election employees under both the Civil Service Retirement System and the Federal Employees' Retirement System.

Authorizes appropriations.

Provides for continued eligibility of such employees for Government health and life insurance benefits as retired Federal employees. Places on the retiree responsibility for any Government contributions otherwise payable with respect to an annuitant.