By Reg Jones
Involuntary separation benefits
November 19th, 2008 | Uncategorized
Q: I have 23 (22 continuous) years federal service under the Federal Employees Retirement System. I am currently age 47. Should I be involuntarily separated, will I be penalized 5 percent a year for each year I am under 56 (my minimum retirement age as I was born in 1961)? Am I entitled to health benefits, as well as my annuity commencing on the day of involuntary separation?
A: Based on your age and service, you wouldn’t be eligible to retire. So, unless you later returned to government service, your only option would be to apply for a deferred annuity at age 60. On the date you separated from the service, you would receive a 31-day extension of your health benefits coverage at no cost to you. You would then be eligible to continue that coverage for up to 18-months under the temporary continuation of coverage provision of law. You would have to pay 100 percent of premiums for that coverage plus 2 percent for administrative expenses.
– Reg Jones
TSP mandatory withdrawal
November 19th, 2008 | Uncategorized
Q: I will turn 70½ in 2009. I’m under the impression I have to start withdrawals from my Thrift Savings Plan in 2009, but I was recently told by a friend that TSP changed the required withdrawal date, and I do not have to start required distributions until age 72. I cannot find this information on the TSP Web site. Can you tell me if this is true?
A: I know of no such change. If you are retired, your first required minimum distribution must be calculated for 2009, but you don’t have to take it until April 2010. You will then have to calculate and take your 2010 distribution by Dec. 31, 2010.
– Mike Miles
Retirement date calculation
November 18th, 2008 | Uncategorized
Q: I will be 55 in January and eligible to retire under the Civil Service Retirement System with 36 years of service. What would be the best day to retire if I stay until March or April at the latest? I’ve always heard about the third of the month. How will the date affect my annuity?
A: As a CSRS employee, you can retire up to the third of any month and be on the annuity roll in that month. Each day you delay retiring after the last day of the preceding month will reduce that month’s annuity payment by 1/30th. So, for example, if you retired on the third, your annuity for that month would be 27/30th of the full amount. One factor to consider when picking your retirement date is when a pay period ends. If you retire at the end of a pay period, you will get credit for any annual and sick leave you earned in that pay period.
– Reg Jones
Health coverage for spouse
November 18th, 2008 | Uncategorized
Q: What’s the law concerning when a spouse can be added to a health insurance plan before or after retirement? I have had continuous federal health coverage for more than five years. I will be retiring in the next few years, and my wife just landed a federal job. I have been carrying her on my policy, but we may get two separate health plans because it is cheaper. However, she does not know if she will continue to work for the feds toward her retirement or go back into the private sector. Either way, can I add her to my health policy in retirement, or is it mandatory that she be a part of my policy in advance of my retirement?
A: No, she doesn’t have to be covered under your Federal Employee Health Benefits plan when you retire. She can be added during any open season.
– Reg Jones
Part-time work
November 18th, 2008 | Uncategorized
Q: Is it possible to go from full-time employment to part time for a few years and then retire (from that part-time position)? If so, are there problems for my full-time Federal Employees Retirement System retirement benefits? Otherwise, I guess I do what everyone else does: retire and take a part-time job. However, I like my agency and the work I’m doing.
A: Yes, you can retire from a part-time position; however, under current law, going part-time would significantly impact the amount of your annuity when you retire.
– Reg Jones
FERCCA settlement
November 18th, 2008 | Uncategorized
Q: I received a packet from the Office of Personnel Management on April 6, 2006. They informed me I was eligible for relief under the Federal Erroneous Retirement Coverage Correction Act. I transferred from the Army as a GS-7 to the U.S. Postal Service. Do you know anyone at the Office of Personnel Management I can contact about the getting USPS to make the settlement; they seem to be dragging their feet in this matter? I had planned to retire in December, but I do want this matter settled before do.
A: I can’t give you a name but I can give you the phone number of the FERCCA hot line, where someone will be available to answer your questions: 888-689-3233. You can call Monday through Friday from 9 a.m. to 5 p.m. Eastern Standard Time.
– Reg Jones
Catch-up contributions
November 18th, 2008 | Uncategorized
Q: Do catch-up contributions made to a Thrift Savings Plan account reduce taxable income for the year in which they are made?
A: Yes, they do.
– Mike Miles
Special retirement supplement
November 18th, 2008 | Uncategorized
Q: I am anticipating retirement in July at age 60 with 21 years of service. I have been divorced for five years after a 22-year marriage. Can I draw this special retirement supplement on my ex-husband’s Social Security benefits, and if not, at what age will I be eligible to draw from his benefits? Also, where and how do I obtain a computation of what those payments are/will be?
A: If you retire at age 60 with at least 20 years of service, you will receive the special retirement supplement, which approximates the Social Security benefit you earned while employed under the Federal Employee Retirement System. The SRS ends at age 62. Because you were married to your ex-spouse for at least 10 years, you will only be able to receive a former spouse Social Security benefit at age 62 if you are 1) unmarried and 2) not entitled to a higher Social Security benefit based on your own work record.
– Reg Jones
Annuity options
November 18th, 2008 | Uncategorized
Q: I am considering leaving my federal position and had a couple of questions about how this would affect my Federal Employees Retirement System. I have been a federal employee for a little over four years and am nowhere near my minimum retirement age (not eligible for an immediate retirement benefit). I understand that because I do not have five years of creditable service I am not eligible for a deferred annuity under FERS and that I have the option to request a refund of my FERS retirement. Since I am not eligible for a deferred annuity, is it mandatory for me to request a refund of my FERS retirement? As I understand it, if I receive a refund for my FERS retirement, I am no longer eligible for FERS retirement and I also lose my creditable years of service. I would like to keep my options open as far as returning to federal service (I want to keep the years of creditable service). If it is not mandatory to request a refund of my FERS retirement, and I don’t request a refund, will my creditable service (less than four years) still count toward my FERS retirement if I return to federal service?
A: Yes, you can leave your retirement contributions in the fund. If you return to government service later on, you’ll pick up where you left off. If you don’t, you can always request a refund.
– Reg Jones
Substantial earnings
November 18th, 2008 | Uncategorized
Q: I am a retired teacher affected by windfall elimination provision/government pension offset in California. My question is specific and related to substantial earnings and the WEP/GPO formula. Over my working lifetime (1963-2005) I amassed twice the minimum amount required total earnings for substantial earnings, however, I did not have 30 individual years above the minimum standard. I made substantially more than the requirement in many years thereby doubling the total of the formula, if you added it year by year. I have substantial earnings; does the formula take this into consideration or is the number of years the only criteria used to determine Social Security benefit? I cannot find the answer anywhere on Social Security information Web pages.
A: Substantial earnings are set on a yearly basis. There is no carryover. So, for example, if you earned twice the mount to qualify as substantial earnings in one year, but less than that in the following year, you would only be credited with one year of substantial earnings. To see what constitutes substantial earnings in a given year, go to http://ssa.gov/pubs/10045.html and scroll down to “How does it work?”
– Reg Jones