By Reg Jones
Basics of military-federal retirement
April 27th, 2010 | Uncategorized
Q: I’m confused by what I’m reading regarding forfeiting military retirement pay. In some cases, your answer states the individual will not lose his military retirement pay if he buys back the time. Other answers say that the individual must waive his military retirement. Do only the 20-year active-duty retirees forfeit military retirement pay?
I’m a reservist who will retire in three years at my 20-year total service mark, 11 of which were active duty. I’ve been offered a GS position that I am considering. I would like to receive credit for those 11 years, and it appears that my military retirement at age 60 would be unaffected, but some of your answers say that I might have to give up the military retirement and join the Federal Employees Retirement System. Are only the active-duty military retirees with 20 years of service required to waive their military retirement pay?
A: You haven’t read carefully enough. Only those who are receiving military retired pay are required to waive that pay if they want to get credit for that time in determining their eligibility to retire and in their annuity computation. Those who are receive reserve retired pay aren’t. In the first case, they are receiving retired pay based on an active-duty career in the armed forces. In the second, they are receiving retired pay largely based on time spent in the reserves. In either case, they are usually required to make a deposit for any periods of active-duty service for which they want to get credit.
Tags: active-duty retirement, FERS, military, military buyback, military retirement, reservist, RETIREMENT
Military retirement and FERS
April 27th, 2010 | Uncategorized
Q: I am a Federal Employees Retirement Service employee and bought back many years of military service. Since Sept. 11, 2001, I have been called back to active service enough times to get an immediate military retirement (22 years) as a reservist. What will this do to my FERS retirement? I have paid all my military time in FERS.
A: It won’t make a difference. You’ll be able to receive both your FERS annuity and reserved retired pay with no reduction in either.
Tags: FERS, military buyback, military service, reserve service, reservist
CSRS-FERS conversion refund?
April 27th, 2010 | Uncategorized
Q: I am a former federal employee. I joined federal service in 1981. I worked with the Immigration and Naturalization Service before transferring to the State Department in July 1982. I came in under the Civil Service Retirement System. In 1985, I was automatically transferred to the Federal Employees Retirement System without my knowledge.
Some employees who were transferred to FERS received a refund for their CSRS benefits. I never received a refund, and now I am under FERS. The Employee Benefits Information System is not showing that I contributed to CSRS. Can you please let me know if I a due a refund.
A: Because you had fewer than five years of coverage under CSRS, you were automatically converted to FERS when it became effective on Jan. 1, 1987. As a result, that CSRS service became FERS service. Therefore, you would be entitled to a refund of any contributions you made to the retirement fund that exceeded 1.3 percent, plus interest. You’ll need to go to your personnel office and work with them to confirm that you have a valid claim. If you do, they can help you apply for the refund.
Tags: CSRS, EBIS, Federal Employees Retirement System, FERS, refund, RETIREMENT
Retirement, Social Security and disability
April 27th, 2010 | Uncategorized
Q: I was able to retire from federal service under discontinued service retirement and as a Federal Employees Retirement System annuitant. Therefore, I have been receiving the FERS supplement for Social Security. I will be 62 in September 2011. At that time, my FERS supplement ends and I will begin collecting Social Security retirement benefits.
I also have severe fibromyalgia and other health problems. Will I be able to apply for Social Security disability? I realize that I would have to make my disability case with Social Security. If I am still eligible to apply for disability, when should I begin my case application?
A: You may apply for disability benefits at any time. I suggest that you go to the Social Security Administration’s online disability insurance planner.
Tags: disability, FERS, RETIREMENT, SOCIAL SECURITY
Secondary insurance
April 27th, 2010 | Uncategorized
Q: I am a employee with the Transportation Security Administration and my wife is an employee of the U.S. Postal Service. I am covered by her health plan. Can I also have insurance through TSA as a secondary policy?
A: No, you cannot.
Tags: HEALTH INSURANCE, health plan, secondary insurance, TSA
CSRS and returning to service
April 27th, 2010 | Uncategorized
Q: I was a federal employee for 23 years in the legislative and judicial branch. I spent about a year and a half of that time as a congressional staffer. About two years of my time at the judiciary were part time (four days a week). I left federal service at age 43. I was under the Civil Service Retirement System and left my money in the system when I left.
I could go back to work for Congress for a few years. I understand that I would have to go into the Federal Employees Retirement Service. What would be the impact on my retirement if I were to return to work for Congress? How long would I need to work?
A: First, let me correct a misunderstanding. If you went back to work for the government, you would be covered by CSRS Offset (CSRS and Social Security), with the option of electing to be covered under FERS. If you stayed in CSRS Offset, your eligibility to retire would be determined by CSRS rules, as would your annuity computation. Under CSRS, you would be able to retire at age 55 with 30 years of service, at age 60 with at least 20, or at age 62 with at least five. If you retired before age 62, at age 62 your CSRS annuity would be reduced by the amount of the Social Security benefit you earned while covered by CSRS Offset; if you retired at age 62 or later, the reduction would occur on the day you retired.
On the other hand, if you elected to be covered by FERS, your eligibility to retire would be determined by FERS rules, as would your annuity computation. However, because you had at least five years of coverage under CSRS, your annuity would have a CSRS component in it and your annuity for that portion would be computed under CSRS rules. As an FERS employee, you would be able to retire at your minimum retirement age with 30 years of service, at age 60 with at least 20 years of service, or at age 62 with at least five. MRAs range between 55 and 57, depending on your year of birth. Note: If you retired with at least five years of service as a congressional employee, that portion of your annuity would be computed using a more generous formula.
Tags: annuity, annuity computation, CSRS, CSRS offset, FERS, minimum retirement age, MRA
Deferred retirement
April 27th, 2010 | Uncategorized
Q: I plan on taking a deferred retirement at age 54 with 32 years of federal service in May 2012. I have been in the Federal Employees Health Benefits program since 1985. My wife plans taking a job in the federal government prior to me taking the deferred retirement. When she is hired, the plan is for me to transfer to her FEHB.
When I reach age 56 in May 2014, how will the deferred retirement impact the three parts of the Federal Employees Retirement System (basic retirement with high-3, etc.; supplement, which should be 32/40 x what I receive in Social Security at age 62; and Thrift Savings Plan), as well as my FEHB and my sick-leave reimbursement (current projection at 1,400 hours)?
A: Your deferred retirement would be based on your highest three consecutive years of average salary and your years and full months of service on the day you left. Because you had at least 30 years of creditable service, you would be able to apply for a deferred annuity at your minimum retirement age. However, as a deferred retiree, you wouldn’t be eligible for the special retirement supplement and you wouldn’t get any credit for your unused sick leave.
As a retiree, you might be able to assume primary coverage in the FEHB program during an open enrollment season when your wife was still employed and she switched from self and family enrollment in her name to yours, assuming that she had obtained coverage before you left government. However, I recommend that you check this out with your personnel office because there are some potentially tricky corners here.
(Read more about this question on the Federal Times Ask the Experts: Money Matters blog.)
Annuities and part-time service
April 27th, 2010 | Uncategorized
Q: I am a Title 38 Veterans Health Administration part-time registered nurse and will be going full time my final three years. I will be retiring with 31 years of service at age 58. Are my part-time years computed on a prorated basis for my retirement annuity?
A: Without getting into agonizing detail, your period of part-time service will be treated as if it were full-time service when determining your eligibility to retire; however, because you were less than full time, when computing your annuity, that period will be prorated. For example, if you had 30 years of service and you worked 20 hours a week during three of them, your annuity would be based on 28.5 years. It’s actually more complicated than that, but you get the idea.
Tags: annuity, full-time, part-time, prorated, retirement eligibility
CSRS, retirement and insurance
April 27th, 2010 | Uncategorized
Q: I went to a Civil Service Retirement System seminar recently and an interesting question about retirement calculation came out during your Q-and-A: What I fail to follow was the first two options (of three) you mentioned regarding the basic life insurance choices.
First, if I opted to keep my basic life insurance at its current level, would that mean that the insurance’s face value would remain the same for me as when I was employed through the rest of my retirement years? I would then assume that I will still continue to pay the same premium on basic life insurance for the rest of my life, as well through my retirement years.
Second, at 50 percent face value, would my premium also decline until the face value reaches 50 percent? Would I then pay that premium for the rest of my retirement years?
A: Not quite. If you elect to maintain your basic insurance at the level it was at on the day you retired, you would pay $2.155 per month for every $1,000 of coverage until you reached age 65. After that, you would pay $1.83 per month for every $1,000 of coverage. If you choose the 50 percent reduction, you’d pay $0.925 per month per $1,000 until age 65 and $0.60 per month per $1,000 after that.
Tags: basic insurance, CSRS, health benefits, insurance, RETIREMENT, retirement benefits
Early retirement eligibility
April 27th, 2010 | Uncategorized
Q: I have 30 years of federal service and am under the Civil Service Retirement System. Next week, I will be 52 years old. I was thinking about retiring before age 55, and I know about the 2 percent reduction in monthly retirement benefits for every year under age 55. When I contacted the Office of Personnel Management about an early retirement, the answer was that I had to wait until age 55 to retire unless my agency offered an early out or buyout.
Maybe I’m not using the correct terminology. Is there any way for me to “retire” before I reach age 55? If I can retire before 55, at what age will I start to receive my monthly retirement benefits? If I retire before 55, will there be additional reductions other than the 2 percent reduction for every year under age 55?
A: What OPM told you was correct. You could only retire before age 55 if your agency offered you an opportunity to retire early. Since it hasn’t, the earliest you can retire is age 55.
Tags: buyout, CSRS, Early retirement, OPM
Re-employment consequences
April 27th, 2010 | Uncategorized
Q: Can an offer be made and accepted on a federal position prior to an effective retirement date?
A: There’s no prohibition against accepting another federal position prior to retiring from your current position, as long as the reporting date is after you retire. However, you need to consider the potential consequences of becoming a re-employed annuitant.
For example, if you retired on an immediate unreduced annuity, the salary of your new position would be reduced by the amount of that annuity, unless you were being hired into one of those rare positions where you are allowed to keep both. If you left under an early retirement authority before meeting the age and service requirement for an immediate annuity, your annuity would stop and you’d be treated like a regular employee. In that case, you’d only be able to retire again when you met the age and service requirements.
Also, if you received a buyout when you retired and returned to work for the government within five years, you’d have to repay every penny of that amount. Further, if you received a lump-sum payment for unused annual leave, you’d have to repay the portion that wasn’t covered by the days you were retired before being re-employed. That’s because annual leave is projected forward as if you were still on the agency’s rolls. Of course, those aren’t the only things to consider, so I suggest that you check out OPM’s website on re-employed annuitants.
Tags: annuity, lump-sum payment, OPM, re-employed, re-employment
FEHB re-enrollment
April 27th, 2010 | Uncategorized
Q: I may be transitioning to nonappropriated-funds employment. I would be keeping my Federal Employees Retirement System status. There is no provision for me to stay enrolled in the Federal Employees Health Benefits program while I am a NAF employee. When I retire (under FERS), can I re-enroll in FEHB and have the premiums deducted from my pension? This is a make-or-break issue for me.
A: No, you won’t be able to re-enroll.
Tags: Federal Employees Health Benefits, Federal Employees Retirement System, FEHB, FERS, NAF, nonappropriated funds, re-enrollment
FEHB and annuities
April 27th, 2010 | Uncategorized
Q: I am covered by the Federal Employees Retirement System. I have six years of part-time service in and want to carry Federal Employee Health Benefits coverage for the last six years of federal service, which will give me a total of 12 years of federal employment. If I resign from federal employment after the 12 years, will I be able to pick up my FEHB coverage as well as collect my annuity at age 62?
A: No, you won’t. No one who applies for a deferred annuity is eligible to re-enroll in the Federal Employees Health Benefits program.
Tags: annuity, Federal Employees Health Benefits, Federal Employees Retirement System, FEHB, FERS, part-time
High-3 regulations
April 27th, 2010 | Uncategorized
Q: I would like to retire at the end of 2011. When this time arrives, my annual pay over the previous four years should be as follows: 2008, $90,000; 2009, $93,000; 2010, $80,000; 2011, $106,000. I will have had a stateside job with locality pay in all of those years except 2010, which would have been an overseas federal job without locality pay (a job in South Korea).
I am concerned about the $80,000 that I’ll be earning in 2010, which is substantially less than the other years shown. Will the retirement system use the $80,000 that I will earn in 2010 for computing the average high-3, or will it disregard that and instead use the earnings for 2008, 2009 and 2011, even though these years are not consecutive?
A: High-3s are always based on an employee’s highest three consecutive years of average basic pay, no matter when that occurs in his career.
Tags: high-3, locality pay, RETIREMENT
Reserve duty and retirement
April 27th, 2010 | Uncategorized
Q: I understand that active-duty time counts, but do weekend drills and the two-weeks-a-year tour also count toward retirement?
A: No, they don’t. You are already receiving credit for your two-week periods of active-duty training, which are treated for accounting purposes as if you were still on the job. Weekend drills are generally on your own time. If one were to fall on what would otherwise be a work day, it would be treated in the same way. Simply stated, you can’t get credit twice for the same period of time.
Tags: military, military service, reserve, reserve duty, reservist, RETIREMENT
Service academy time and accrued leave (updated)
April 27th, 2010 | Uncategorized
Q: I began working in the federal government in August 2008. I am currently buying back 13 years of military service: nine years in the Marine Corps and four years at the Naval Academy. I understand once I complete the military service buy-back I will have 13 years added to my creditable service date for retirement purposes.
My leave service computation date currently reflects the nine years of Marine Corps service plus my 1.5 years as civilian employee. As a result, I am earning six hours of leave per pay period. I questioned my human resources department as to why my leave SCD does not reflect all of my creditable military service I am buying back. My HR department stated that service academy time is creditable for retirement purposes but is not creditable for leave purposes.
This may be correct. However, it does not seem very logical. To date, no one from my HR department can produce the reference that confirms this policy. Can you tell me if my HR department is correct, and can you let me know where I could find this reference?
A: Your HR office was mistaken. According to OPM, Section 1115 of the National Defense Authorization Act of 2008 made academy time creditable for retirement purposes and, by extension, leave accrual purposes. That service is creditable both prospectively and restrospectively.
Tags: buy back, buyback, LEAVE, military buyback, RETIREMENT, SCD, service academy
Benefits intact
April 21st, 2010 | Veterans' employment benefits
Q: I work for the Air Force. One of our retired military members was told that if he waived his retired military pay to combine the military and the civilian service, he would lose his Tricare benefit. What exactly are people waiving when they waive retired military pay?
A: He was misinformed. Waiving his military retired pay and making a deposit to the civilian retirement fund would allow him to get credit for his active-duty service in determining his eligibility to retire from his civilian job and in his annuity computation. It will have no affect on any military benefits to which he would otherwise be entitled.
Tags: military service, Tricare
Leaving for the military
April 21st, 2010 | DOWNSIZING
Q: I am a federal employee with 10 years active-duty time that I have almost finished buying back. I am also in the National Guard and I have just been offered a full-time Active Guard reserve position. Since I will leave federal service to return to active duty (Guard), can I get the money back that I have contributed to buying back my
active-duty time?
A: You can get a refund of your military deposit only if you: 1) resign from the government before you are eligible to retire and 2) receive a refund of all your contributions to the retirement fund, both the military deposit and any retirement deductions taken from your civilian pay.
Tags: military buyback
WEP and annuity
April 21st, 2010 | Windfall elimination provision
Q: My husband worked for 13 years in the civil service and then left. He was a meat cutter WG-8 with the commissary system and that position was being phased out as well as the nearest bases to us being closed. He left the system in 1987 and applied at that time to receive his retirement contributions to use for retraining for another line of work. Since that time, he has worked as a tile contractor. Some years were good some were not. He will be 62 in a few months and went to the Social Security office to inquire about retirement benefits and was told that we are in the windfall elimination provision catagory and that hardly none of the years he worked counted as qualifying income, even those years he worked before he began working for the civil service. He was told that because of his government pension his Social Security would be only $249 dollars per month. Is this correct? What pension? We took the modest amount of his retirement contributions so that he could begin work in the tile trade. We have no pension from the government. Does this still count? Are we sill stuck in the WEP catagory?
A: Your husband was misinformed. The windfall elimination provision only applies to someone who is eligible for an annuity from a retirement system where he didn’t pay Social Security taxes. Because he took his contributions out of such a retirement system, he isn’t eligible for an annuity; and because he isn’t eligible for an annuity, the WEP doesn’t apply.
GPO/WEP repeal
April 21st, 2010 | Windfall elimination provision
Q: I recently read that the GPO/WEP repeal issue was tabled for 2010 and somehow attached to the health care bill. Do you have any current information on this?
A: No action has been taken on that bill. And no, it didn’t get attached to the health care bill.
Tags: WEP