By Reg Jones
CSRS to FERS
December 31st, 2009 | Re-employment
Q. I am considering retirement from the Postal Service after 35 years (includes military time) and am would like to become a TSA agent. Would I be able to collect my CSRS pension and work FERS if hired?
A. You’d need to check with the Transportation Security Administration to confirm that you would be able to receive both, without a reduction in either.
Tags: CSRS, FERS, RETIREMENT
Increase in Medicare Part B for current retirees
December 29th, 2009 | Medicare
Q. Why is Medicare Part B premiums increasing for retirees who currently have Part B? I thought only “new” enrollees would be paying the higher rate in 2010.
A. Most Medicare beneficiaries will not see a Part B monthly premium increase as a result of a “hold harmless” provision in the current law. This allows for 73 percent of beneficiaries to be protected from an increase raising the 2010 Part B monthly premiums. Approximately 27 percent of beneficiaries are not subject to the hold-harmless provision because they are new enrollees during the year (3 percent), they are subject to the income-related additional premium amount (5 percent), or they do not have their Part B premiums withheld from social security benefit payments (19 percent), including those who qualify for both Medicare and Medicaid and have their Part B premiums paid on their behalf by Medicaid (17 percent).
Tags: Medicare Part B, retire
WEP for FERS Special Supplement
December 29th, 2009 | Special retirement supplement Windfall elimination provision
Q. I have never been able to find the formula for calculating the FERS Special Supplement for those employees who retire at their minimum retirement age under FERS. As I transferred from CSRS to FERS during a previous open season, I would like to know if the Windfall Eliminations Provision is applied when calculating the Special Supplement. I will have less than 20 years of substantial earnings under Social Security. So will the 40 percent multiplier (rather than 90 percent) be applied to the first component of my Social Security calculation?
A. The WEP doesn’t apply to the special retirement supplement. You can estimate the amount of the SRS using the following formula: take the Social Security benefit estimate provided to you by the Social Security Administration, multiply it by your total years of service covered by FERS (rounded up to the next higher year), and divide by 40. For a more accurate estimate go to www.FEDbens.us and use the convenient software program found there.
Tags: fers formula multiplier congress, SOCIAL SECURITY, WEP
CSRS disability retirement earnings
December 29th, 2009 | Disability retirement
Q. I am on CSRS disability from the Postal Service. In June 2010, I turn 60 years of age. Am I obligated to report any earnings I make in 2010 in the private sector for the whole or part of the year? Or will I still be under earnings and medical restrictions as I am now in 2009? I am under the impression that when I turn 60 some things change. Is this true?
A. Up to age 60, the Office of Personnel Management says you are subject to periodic medical re-evaluation to determine if you are still disabled, and to an annual review of your earnings to determine if you are restored to earning capacity. After you reach age 60 those are no longer required.
Part-time work for CSRS annuitant
December 28th, 2009 | Re-employment
Q. I retired from DoD in 2007 under Civil Service Retirement System at age 56 with 31 years of service. In 2008, I went back to work for DoD as a part-time employee working 16 hours per week (832 hours per year). I was hired to fulfill functions critical to the mission of my agency. My SF 50 lists me as a permanent employee and my Annuitant Indicator is CS-No Reduction. My question is: Assuming my employer wants me to continue working, how long can I work on my current part-time job? I have read that an appointment cannot last for more than 2,087 hours (e.g., 1 year full time or 2 years part time) to mentor less-experienced employees and/or to provide continuity during critical organizational transitions.
However, on a Social Security site discussing the National Defense Authorization Act for Fiscal Year 2010 (www.ssa.gov/legislation/legis_bulletin_102809.html) it mentions that a waiver to the dual compensation rules for CSRS annuitants who are re-employed in order to fulfill functions critical to the mission of the agency cannot be applied to annuitants working more than 520 hours in a six-month period, 1,040 hours in a 12-month period, or for more than a total of 3,120 hours. The waiver authority terminates after five years. That would indicate that at a rate of 832 hours worked per year, I could work part time for a total of 3.75 years instead of two years. Which number is correct?
A. You were hired under a special authority granted to DoD. You’ll need to go to your personnel office and ask them how long you can remain on the rolls. The other authority to which you referred was prospective and applies to all other agencies of government.
Tags: CSRS, Defense Department, part-time
Voluntary early out
December 28th, 2009 | Buyouts Special retirement supplement
Q. The U.S. Postal Service has given employees retiring voluntarily on Oct. 31, 2009 an amount of $15,000. Will the first check of $10,000 have everything taken out for federal and state taxes, Medicare, Social Security, health benefits, etc? When would my first annuity check start? I am a Civil Service offset employee with 12 years under FERS. I had a total of 30 years of both civil service and FERS but I left and came back to the USPS in 1997 (7 years). I took out the money in the retirement fund and so lost 20 years credit to use for seniority purposes, I think. Do I have to wait until I am 62 years to start collecting Social Security? I was born in 1956, so my MRA is 56.
A. All federal payments, including taxes, Medicare and Social Security, will be deducted from each payment. Other payments, such as health benefits, will not. As a FERS employee, you will be eligible to receive the special retirement supplement when you reach your MRA. It will continue until age 62 when you will be eligible for a Social Security benefit. Whether you apply for one at that time is up to you. If you retired on Oct. 31, you would have been on the annuity roll on Nov. 1.
Tags: FERS, RETIREMENT, USPS
Federal employees retirement
December 28th, 2009 | Annual leave FERS annuity computation Sick leave
Q. I am reading the article, “It is not too late to retire in 2009 or plan for 2010 or 2011.” I understand that federal employees should retire by the last day of the month to get their annuity starting from the first of the following month. Example: Federal system employee can retire on Dec. 31, 2009. The annuity will start from Jan. 1, 2010. However, the pay period ends on Jan. 2. The employee will lose annual leave for Friday and paid leave on Saturday and Sundays? Though those days will be paid much less under the annuity. Is that right? What is the best situation in this case?
A. For FERS employees, it’s a matter of trade-offs. If you retire by the last day in a month, you’ll be on the annuity roll in the following month, e.g., retire no later than Dec. 31 and you’ll be on the annuity roll Jan. 1. If you retire after the last day, you won’t be on the annuity roll until the month following the month in which you retired, e.g. retire on Jan. 2 and you won’t be on the annuity roll until February. Retiring employees have to balance the gains to be made by completing a pay period (particularly any sick or annual leave they would earn) with any delay in receiving their first annuity payment.
Service time
December 28th, 2009 | Special category employee retirement
Q. I was an active-duty firefighter in the Air Force. Does that time count towards the special computation for retirement of LE/FF/ATC? I am currently not a FF in the federal system but am a federal employee.
A: No, it does not. It would only count if you were a firefighter who was called to active duty and then returned to your firefighter position.
Tags: air force, RETIREMENT
Civil Service Retirees COLA for 2010
December 28th, 2009 | Cost-of-living adjustments
Q. Can anyone explain why retirees are not included in the 2 percent cost-of-living allowance for 2010? Is it because the President is pro union and retirees are not covered by the union? As far as I know, this is the first time retirees were excluded from annual COLAs. It would seem to me that retirees are more in need of the COLA than currently employed full-time employees.
A: There are two pieces of law involved here. The salaries of employees are governed by the pay comparability act, which compares the salaries of federal jobs with those in the private sector. Employees never receive COLAs. Only retirees and survivors are eligible for COLAs, which, like Social Security benefits, are controlled by changes in the consumer price index.
It’s not too late to retire in 2009, or plan for 2010 or 2011
December 15th, 2009 | CSRS annuity computation FERS annuity computation
It’s not too late to retire in 2009, and it’s not too soon to at least begin planning to retire in 2010 or 2011. For this year and the next two years, the calendar is working in favor of many of you. Let me explain.
As my regular readers know, my position is that there is no one best date to retire. However, each of you can pick the best one for you if you know how.
First, you must figure out if you are ready to retire. To do that, you have to answer three questions: Do you meet the age and service requirements to retire? Are you financially able to retire? Are you emotionally prepared to retire?
The first question is an easy one to answer. You either meet the requirements spelled out in law or you don’t. However, the other two questions are ones that only you can answer. The first requires the computer-age equivalent of paper and pencil; the next two require a good deal of soul searching and reflection.
If you’ve decided that you are ready to retire, here are the tools you’ll need to pick your date:
* Know when your annuity begins. Ideally, you’ll want to retire on a date that affords a seamless break between work and retirement. To come as close as possible to achieving that, you need to know the law.
If you are a Federal Employees Retirement System employee, you must retire no later than the last day of a month to be on the annuity roll in the following month.
If you are a Civil Service Retirement System employee, you have more flexibility. You can retire up to the third day of a month and be on the annuity roll in the same month; however, your annuity for that month will be reduced by 1/30th for each of those three days that you are still on the payroll.
* Get credit for unused leave. If you retire before the end of a pay period, you won’t get credit for any annual or sick leave you would otherwise have earned. Gaining additional hours of annual leave is important because they are paid to you in a lump sum at your hourly rate of basic pay.
* Get credit for “use or lose” leave. If you have accumulated more annual leave than you can carry forward into the next leave year, you’ll want to retire no later than the day before the new leave year begins. Otherwise, that excess leave will be lost along with the dollars you would have received in your lump sum payment.
Therefore, if you are leaning toward retiring at the end of a year, it’s important to know when the leave year ends. In 2008, it ended on Jan. 3, 2009, and many CSRS employees took advantage of that fact, giving up three days of their January annuity payment in order to gain the annual and sick leave they earned in that final pay period.
In 2009, the first-month annuity reduction will be even less, because the leave year ends on Jan. 2, 2010. The same is true in 2010, when the leave year ends on Jan. 1, 2011. (And yes, you can retire on a holiday.)
Dec. 31, 2011, the end of the leave year in 2011, is a magic date for both FERS and CSRS employees.
FERS employees can walk off the payroll and onto the annuity roll without losing a day of pay, and any CSRS employee can do the same without losing a day of annuity.
Tags: annual leave, annuity, CSRS, FERS, LEAVE, retired, RETIREMENT, unused