Ask The Experts: Retirement

By Reg Jones

Active-duty, reserve time toward retirement

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Q: I have eight years of active-duty service and 10 years with the reserves. What part of that time counts toward the Federal Employees Retirement System? I was also recalled to active duty for an eight-month period and want to know whether I can add all this time.

A: Your active-duty service in the armed forces will only count if you make a deposit to the civilian retirement fund. You have already received credit for any two-week periods of annual active duty for training, which for leave purposes have been treated as if you were still on the job. Reserve time, other than when called to active duty, isn’t creditable for any purpose.

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Survivor benefits for dual-federal couples

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Q: My husband retired under the Civil Service Retirement System Offset program and had a 55 percent survivor benefit for me. I am Federal Employees Retirement System employee, and I will be retiring in three years with the maximum survivor benefit for him. Whoever dies first, will the other one receive survivor benefits and will the survivor’s other federal benefits be reduced by how much they receive from the deceased?

A: There wouldn’t be any reduction. You would be able to receive both your own annuity and the survivor benefit provided by your deceased spouse.

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Firefighter considering new post

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Q: I was employed as a GS-081 firefighter on Dec. 30, 1984, at age 20. I have met my retirement eligibility of 25 years. First, will my entire 26 or so years of experience be calculated at the special provision (firefighter) rate, or just the first 20? Second, I am in the process of taking a part-time position with the Transportation Security Administration: If I accept the job, I assume it will not affect my Federal Employees Retirement System benefits, as long as I do not leave the firefighter job, correct?

Third, if I consider a full-time TSA position, would I lose the special provision calculation for every year of service beyond my first 20 years as a firefighter? Fourth, if I do lose that provision, would it be better to officially retire from the firehouse and begin anew with TSA?

A: I can’t answer your questions as posed because they contain a mixture of fact and fiction. Instead, I’ll lead you down a straightforward path to get you the answers you need. As a firefighter with at least 25 years of covered service, you can retire at any age. Twenty years of that service will be computed using the more generous formula, the rest using the standard formula. You would also be eligible for the special retirement supplement, which approximates the Social Security benefit you earned while employed under FERS. The SRS would be reduced or stopped if you have earnings from wages or self-employment that exceed the annual Social Security earnings limit. Unless you accept a position that allows you to receive both your full annuity and the full salary of your new position, your salary would be offset by the amount of your annuity. If you did receive an appointment that allowed you to accept both, the time you spend in the new position would not be creditable for any retirement purposes.

Health care for family’s future (updated)

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Q: I am covered under the Federal Employees Retirement System and plan to retire at age 56 (my minimum retirement age) with 34 years of service. I will have met the five-year qualification for the Federal Employees Health Benefits program. I intend to keep a family FEHB plan in retirement to cover myself, my wife and my daughter. At my retirement, I will elect survivor benefits for my wife so she can continue to use my FEHB plan if I die before her.

When I turn 65, my wife will be 56 and my daughter will be 19. I understand that Medicare will be my primary insurer, but with survivor benefits, my daughter and my wife can continue to use the FEHB plan as a primary insurer. If my wife and I both to die before the FEHB plan coverage expires, can my daughter continue to be covered by my FEHB plan without assigned survivor benefits? If so, where can I find details?

A: If you were both to die, your unmarried dependent child would be eligible to receive a survivor benefit and continue to be covered under the FEHB program until age 22, when the survivor benefit ends. At that time, she would be eligible to continue coverage under the Temporary Continuation of Coverage provision for up to 18 months. The Office of Personnel Management’s website has more information on children’s benefits and on health benefits coverage regarding the situation you’ve described.

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Social Security and CSRS

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Q: I am a veteran who paid into Social Security while in service for seven years; I am now retired from federal service under the Civil Service Retirement System. Will I be entitled to Social Security payments?

A: You will only be entitled to a Social Security benefit if you have earned 40 credits, which takes 10 years of covered earnings. Note: If you are eventually entitled to a Social Security benefit, you will be impacted by the windfall elimination provision. The WEP reduces the Social Security benefit of anyone who is receiving an annuity from a retirement system in which he didn’t pay Social Security taxes, like CSRS, and has fewer than 30 years of substantial earnings under Social Security.

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Upcoming early retirement eligibility

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Q: Will the Labor Department/Mine Safety and Health Adminstration be taking part in the Voluntary Early Retirement Authority this year?

A: We haven’t heard a thing.

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Setting up a survivor annuity

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Q: My 76-year-old mother got married last year to a 76-year-old man. After they got married, they were getting about $5,000 a month from his Civil Service Retirement System annuity and about $1,500 a month from her Social Security. Sadly, he had a massive heart attack two weeks ago and passed away. They had been married 11 months.

This gentleman had told my mother that he had named her as the beneficiary of his survivor annuity and that she would receive about $3,000 a month if he died first. Will my mother’s $1,500-per-month Social Security be affected by this annuity? Basically, will she receive $4,500 per month, or something less?

A: Your mother would only be eligible for a survivor annuity if her late husband elected to provide one for her and accepted two reductions in his annuity. The first reduction would be to pay for the benefit; the second would pay for a deposit that equals the difference between the new annuity and the annuity he received each month after he retired, plus 6 percent interest. Simply naming her as his beneficiary in a will wouldn’t entitle her to a survivor benefit. To find out if he took the right steps to provide her with one, call the U.S. Office of Personnel Management at 888-767-6738. After reporting his death, ask whether you mother is entitled to a survivor annuity.

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Expert appointments and retirement

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Q: I voluntarily retired after 37 1/2 years with the Internal Revenue Service on Jan. 3, 2007, under the Civil Service Retirement System. From July 2007 to Dec. 6, 2009, I served as a contractor to the Health and Human Services Department. I was then hired as a full-time employee. Human resources made a mistake and did not offset my annuity until March 2010. As a result, this left me with only $38 in net pay and a debt of $15K because my salary was not offset.

HHS wants me to continue to provide my services so they offered to hire me under an “Expert” appointment not to exceed one year from the date of the original appointment. After the year expires, they will offer me another appointment for two years. Upon completion of that appointment, they will offer me another two-year appointment with no more offers thereafter, resulting in a total of five years. When this appointment is made retroactively to the December 2009 starting date, I will need to request a waiver of the debt as through no fault of my own, I was not fully informed of the ramifications of my appointment. I understand the waiver will be accepted and I will be relieved of this debt.

As a result of this appointment, I will not be allowed to put any monies into CSRS retirement, I cannot participate in the Thrift Savings Plan and I will not be able to participate in the dental or vision insurance plans. I planned on working for an additional five years to reach the 41-year, 11-month requirement so my annuity can be recalculated to equal 80 percent of my total salary. If I set aside 7 percent of my salary, which I understand is the percentage that would be deducted if I was able to pay into retirement after the five years, can I request an recalculation of my annuity if I pay in the amount set aside?

A: No, you can’t do that.

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Unused leave

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Q: As a federal civil service employee in the Defense Department, I usually have several days of use/lose annual leave at the end of the year. Rather than taking off almost the entire month of December to avoid losing accrued annual leave, am I allowed to sell back the unused leave?

A: There is no provision in law that would allow you to be paid for unused annual leave that exceeds the carryover amount from one leave year to the next.

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Survivor benefits and annuities

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Q: For my spouse to continue to be covered under the Federal Employees Health Benefits program after I retire from federal service and after my death, which type of annuity should I select? My spouse does not want to receive a survivor annuity and will consent to sign an attachment to SF 2801-2, Spouse’s Consent to Survivor Election, but he needs the FEHB coverage.

A: He can’t be covered under the FEHB program unless he is receiving a survivor annuity. However, as a Civil Service Retirement System employee, with your husband’s written consent, you could elect to give him any amount of annuity from $1 up. Many retirees in your situation elect a survivor annuity amount that is sufficient to cover the premiums. If it isn’t sufficient, he would be able to pay the premiums directly.

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Insurance and Medicare Part B

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Q: I am working full time as a Coast Guard civilian. I have Mail Handler’s self-only medical insurance, but I am also covered by my wife’s medical insurance, which is what I really use. Her provider sent me a letter informing me that because she is retired and I’m turning 65 on April 28 that I need to sign up for Medicare Parts A and B to continue my coverage through them. I signed up with her insurance company as a single member and my wife changed her plan. Her former employer and her annuity will continue to pay for our premiums. So, did I really need to sign up for Medicare Part B at this time? I have never used my Mail Handlers plan, nor do I intend to start. I plan to retire next year with more than 42 years of federal service.

My other question is, how do I pay for Part B? I have 40 credits with Social Security even though I am a Civil Service Retirement System employee. I worked a part-time job for more than 10 years during the early stages of my federal career. Should I wait until age 66 to start claiming Social Security or start now (to pay for Medicare Part B)?

A: I’m not qualified to answer questions about nonfederal benefits. I can tell you that if you are still working when you turn 65, you can delay enrolling in Medicare Part B without incurring any penalty. However, if you delay after retiring, you premium will be 10 percent higher for each 12-month period that you could have been enrolled and didn’t. Premiums for Part B can be deducted from your Social Security benefit if it is sufficient to cover them. If not, you can pay them directly. Note: Because you will be receiving an annuity from a retirement system where you didn’t pay Social Security taxes, you will be subject to the windfall elimination provision. As a result, any Social Security benefit to which you are entitled will be reduced if you have fewer than 30 years of substantial earnings under Social Security.

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Firefighter retirement codes

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Q: I got hired in the Defense Department fire service as a GS 0099 student trainee (firefighter) in 2006. When I started I was scheduled to work a full 72-hour work week and was not restricted from any duties. All my retirement codes were “M” for special retirement. In 2009, most of the 0099 SF 50 codes were changed to “K,” but not all of them: Four of my SF 50s are still “M.” Does it matter the series number for special retirement? I need to know the proper code.

A: It makes a tremendous difference. “M” is the code for law enforcement officers and firefighters who are covered by the Federal Employees Retirement System and Federal Insurance Contributions Act-Special: In other words, special-category employees who are entitled to the more generous retirement benefits. “K” applies to everyone else covered by FERS and FICA who will be entitled to regular retirement benefits. Any period of service which is classified as “K” isn’t covered service for law enforcement or firefighter retirement purposes.

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USPS and disability

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Q: I’m a U.S. Postal Service employee. For more than two years, I’ve been on periodic roll with the Labor Department. My physician’s report was disputed, and the Labor Department sent me to its physician. Eventually there was a referee physician picked by the Labor Department. The referee physician determined that I was unable to work until I had knee joint replacement.

I’ve had five knee surgeries, four of them job-related, and at this time will not have the surgery. My question is, is it possible to be put on permanent periodic roll by the Labor Department, or do I have to apply for disability? I live in New Jersey and would like to relocate out of state, and I fear that the Labor Department will try to employ me after I move.

A: Only your agency can tell you whether you could be put on a permanent periodic roll. As for disability retirement, you’d need to work with your agency to determine if you are eligible to apply for that benefit. For starters, your agency would need to certify that you are unable to perform the duties of your current position or any other position for which you are qualified at the same grade or pay in your commuting area.

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CSRS, Social Security and survivor benefits

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Q: My husband and I are both Civil Service Retirement System Offset employees who will elect a survivor annuity. Can you explain how a CSRS Offset employee’s survivor annuity offset amount is calculated? A specific example would be helpful of how the offset amount is applied to a survivor annuity.

When my husband begins getting Social Security, his annuity is estimated to be offset by about $800, mine by about $200. If I receive a survivor annuity upon his death, will my survivor annuity amount be reduced dollar for dollar by the full $800, or will my husband’s full annuity amount be reduced by the $800 offset and then have the survivor annuity calculation (55 percent of the reduced offset annuity) applied to arrive at the spousal annuity amount? Or is there another way of calculating? My Social Security benefit will not be as large as my husband’s, so I will qualify for his Social Security benefit upon his death.

A: A surviving spouse who isn’t eligible for a Social Security survivor benefit is paid the full CSRS survivor annuity. A surviving spouse who is entitled to a Social Security survivor benefit will have that annuity reduced by the amount of Social Security survivor benefit that is attributable to the period the deceased annuitant was employed under CSRS Offset. That offset normally occurs at age 60. If you are entitled to a Social Security survivor benefit and a Social Security benefit based on your own record, you will receive the larger of the two benefit amounts, but not both.

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Reserve retirement and FERS

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Q: I am a dual-status Army Reserve technician about to retire, and my Federal Employees Retirement System workers and I are confused as to whether we can receive both the Social Security supplement and our Army Reserve retirement money without deductions taken from either amount. For example, I will retire at age 56 under FERS, which qualifies me for a Social Security supplement of $1,045 until age 62. I also become eligible for the Army Reserve retirement check for about $1,500 at age 60. So far, no one can tell me whether we will lose part of our our supplement; up until this point, all of our retirees have been under the Civil Service Retirement System.

A: Yes, you may receive both benefits without a reduction in either. That’s because the Social Security earnings limit, which could reduce the amount of the special retirement supplement, is based solely on earnings from wages or self-employment. All other forms of income, including annuities, aren’t counted.

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Coverage gap for children over 22

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Q: We are on the federal Blue Cross/Blue Shield plan, and our son will turn 22 evidently before the extension comes into effect. I understand that he gets a month of courtesy coverage, which would expire on Dec. 22. So, what do we do for the additional nine or 10 days to keep him covered?

A: He will be offered an opportunity to continue his coverage under the Temporary Continuation of Coverage provision in the current law. The cost of that coverage would be 100 percent of the monthly premium, plus an additional 2 percent for administrative costs. Note: The Office of Personnel Management is working with Congress to amend the law to allow dependents such as your son to be covered sooner than Jan. 1, 2011. If that happens, you won’t have a problem.

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Negotiating leave accrual rates

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Q: Is there any possibility of negotiating a higher level of annual leave accrual when accepting a permanent federal employment position, with no prior military or permanent federal civilian service?

I understand new federal employees normally accrue four hours per pay period. However, I have been a contractor supporting this federal agency for more than 10 years, and I am interested in determining whether there is any precedent for negotiating a higher rate of annual leave accrual based on prior federal contractor employment.

A: No, there isn’t. Leave accrual rates are set by law.

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The end of retirement annuity

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Q: My uncle’s ex-wife has been receiving half of my uncle’s retirement annuity since he retired. She never remarried and is now claiming that she can pass on her portion of the annuity when she dies. She wants to leave the annuity to her church. Can she do this?

A: No, she can’t. Her survivor annuity will end with her death.

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Social Security and FERS disability

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Q: I suffered a stroke on the job with the U.S Postal Service, and I recieve disabilty pay from the USPS. I also applied for and recieve disabilty pay from Social Security. When I had the stroke, I had enough sick leave to hold me over until I was approved for Federal Employees Retirement System disabilty pay. Social Security gave me the back pay. Do I have to pay this money back? Also, will my FERS disability pay be reduced since I get Social Securirty disability pay?

A: Yes, your FERS disability annuity will be affected by your Social Security disability benefit. During the first 12 months, you will receive 60 percent of your high-3 average salary minus 100 percent of your Social Security disability benefit. After that, you’ll receive 40 percent of your high-3 average salary minus 60 percent of your Social Security benefit. I have no way of knowing whether you have received the correct amount of money from the Social Security Administration or if you will have to give any of it back. You’ll have to ask the Social Security Administration.

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Wage system COLA?

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Q: I’m a WG-9, Step 3. We just recently received the 2010 cost-of-living adjustment. However, it was not retroactive to January 2010 like the GS COLA adjustments were. Will this automatically be retroactive, or is this COLA effective the date the president signed the order?

A: Wage system and GS employees don’t receive cost-of-living adjustments. They receive pay increases. While the increases for GS employees are usually effective on the first pay period beginning on or after Jan. 1, wage system increases are based on wage surveys conducted at different times of the year and vary by locality.

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