By Mike Miles
Switching to CSRS offset under FERCCA
May 9th, 2013 | Uncategorized
Q. I was recently informed that I fell under the Federal Erroneous Retirement Coverage Corrections Act and had an option to select CSRS Offset. I was also told that the 1 percent and matching in my Thrift Savings Plan would be removed if I selected CSRS Offset. My human resources office told me that it would be the exact amount that was put into my TSP. If it made money, I would be able to keep the difference; if it lost money, I would have to make up the difference. So I selected CSRS Offset. Now they are beginning to remove the 1 percent by pay period, but they are removing the amount plus interest. I also have a colleague who was told the same, but they are only removing the actual amount and not interest. What are they supposed to be removing from the TSP if you switch from FERS to CSRS Offset under FERCCA?
A. It’s not that simple. In fact, the FERCCA rules for this are pretty complex. The answer depends upon your particular circumstances.
FERCCA employee switching to CSRS Offset
December 14th, 2012 | Uncategorized
Q. I have elected to switch to CSRS under FERCCA. I understand I will be given the option of the refund of my portion of Thrift Savings Plan contributions. When I left the Postal Service after my first seven years in the 1980s, I withdrew my CSRS money. If I take the refund of my portion of TSP deposit over the CSRS maximum contribution, can I pay back the withdrawn CSRS money without tax implications?
A. The refund of your TSP contributions will be taxable, since you never paid taxes on the money when you earned it. You may then use after-tax money to make a CSRS redeposit, which is not tax-deductible.
Tags: CSRS, FERCCA, maximum contribution, Postal Service, taxes, TSP
Wrong retirement system?
June 27th, 2012 | Uncategorized
Q. I may be in the wrong retirement system (CSRS). If I am, are there any companies that can guide me to decide between CSRS offset and FERS under the Federal Erroneous Retirement Coverage Corrections Act?
A. Yes. I have capabilities and experience in this area (I provided decision support in one of the largest FERCCA cases on record) and will be happy to discuss your situation with you. You may contact me directly through www.variplan.com.
Agency matching funds and TSP loans
January 12th, 2010 | Uncategorized
Q: Do you know of any provisions in the Federal Erroneous Retirement Coverage Corrections Act that allows one to get a Thrift Savings Plan loan with agency matching funds in their TSP account? In April, while employed with the Department of the Army, the Army Benefit Center informed me that I was entitled to retirement plan corrective action under FERCCA. In July, I submitted my FERCCA election form to enroll me into Civil Service Retirement System Offset retirement coverage from the Federal Employees Retirement System. ABC sent letters to my previous employers notifying them of this change and informing them that they need to remove any agency matching funds and the automatic one percent from my TSP account. I understand this part of the process. However, recently I attempted to get a TSP loan and was told that I am not eligible for a loan because I have agency matching funds in my TSP account. The matching funds are there from when I was covered under FERS, and workers covered under CSRS are not eligible for agency matching funds. It’s been six months since my retirement plan changed and I still cannot borrow my own money.
A: I know of no such provisions. You should contact your employing agency and/or the TSP for further advice on how to have the excess employer contributions removed from your account.
Tags: FERCCA, loan, matching funds, TSP