By Reg Jones
Medicare-related health plan options
May 21st, 2010 | Benefits
Q: The 2011 open-enrollment season will to intoduce a voluntary sub-option for annuitants who receive Medicare Part B. Can you give me an update on this Office of Personnel Management proposal? Will all the participatng plans offer this, especially Blue Cross/Blue Shield?
A: On April 7, OPM issued its annual call letter to plans participating in the Federal Employees Health Benefits program. In the letter, it encouraged them to propose “pilot programs wherein participating carriers offer a sub-option for Medicare-eligible annuitants as an alternate choice within their existing option(s). The sub-option may include premium pass-through accounts to be used solely for plans paying some or all of Medicare Part B premiums. The uniform contribution amount should provide an adequate incentive for eligible members to participate, but need not represent the full amount of Medicare Part B premiums. Individual Medicare premium amounts may vary based on consumer choice, penalties for failure to enroll in Medicare at the first opportunity, or increased premiums based on means testing.”
Responses to the call letter aren’t due until May 31. Whether any plans will elect to propose pilot programs is unknown at this time; if they do, it remains to be seen whether any of them would meet OPM’s criteria.
Tags: Blue Cross, Blue Shield, health care, health reform, Medicare, open enrollment
Buying back academy time
May 21st, 2010 | FERS annuity computation RETIREMENT
Q: My question is about how or if the years served at a service academy (the Air Force Academy, in my case) may be credited as years of active-duty service upon active-duty retirement. I understand that those years may be “bought back” if I am counting those years toward a civilian federal retirement under the Federal Employees Retirement System, but what about active-duty military retirement? May those years be bought back?
A: A deposit into the civilian retirement system may be made to get credit for time spent at one of the military academies. Similarly, a deposit may be made to get credit for active-duty service; however, in most cases, anyone who retires from the military (not from the reserves) must waive his military retired pay when he retires from his civilian job.
Tags: academy, Federal Employees Retirement System, FERS, military retirement, service academies
Social Security WEP rules
May 20th, 2010 | RETIREMENT
Q: I am under the Civil Service Retirement System and plan to retire within the next year after 31 years of service. I also have 40 quarters under Social Security from a previous job and plan to keep working as long as I can as a contractor paying into Social Security. If I wait until I am 70 to collect Social Security, I would have 21 years under Social Security.
As I understand it, the windfall elimination provision will be adjusted by a percentage. If I continue to work past 70, would that percentage be continually recalculated, or is it fixed at the time you elect to take Social Security?
A: The reduction is fixed at the point where you begin collecting your Social Security benefit.
Tags: CSRS, SOCIAL SECURITY, WEP, windfall elimination provision
WEP vs. “Catch 62″
May 20th, 2010 | RETIREMENT
Q: A Civil Service Retirement System employee recently retired and was told by a representative of the Social Security Administration that because he qualified for Social Security after he retired under CSRS he would not be affected by the windfall elimination provision. The rep said that he is only affected by the WEP if he had his 40 quarters during or before his CSRS employment. I can’t find any documentation supporting this.
A: The SSA rep was confusing the windfall elimination provision with what’s often referred to as “Catch 62.” The WEP applies to the Social Security benefit of anyone who receives an annuity from a retirement system where he didn’t pay Social Security taxes, such as CSRS, and has fewer then 30 years of substantial earnings under Social Security. The WEP applies no matter when a retiree qualifies for a Social Security benefit. On the other hand, Catch 62 applies to CSRS retirees who didn’t make a deposit for their active-duty military service and are eligible for a Social Security benefit at age 62 or when they retire, if it’s after their 62nd birthday.
Tags: Civil Service Retirement System, CSRS, SOCIAL SECURITY, taxes, WEP, windfall elimination provision
Federal health plans under the new law
May 20th, 2010 | Benefits
Q: Will the 2011 family plan premiums increase significantly because of the new law requiring dependent coverage until age 26, or will the Office of Personnel Management create a new plan other than “single” or “family”?
A: I’m not aware of anything in the the new law, other than adding dependent children up to age 26, that would affect next year’s health benefits premiums. And I’m not aware of any plans to request a change in the Federal Employees Health Benefit Act that would permit the addition of another option.
Tags: FEHB, health benefits, OPM
CSRS, Social Security and survivor benefits
May 20th, 2010 | Benefits Creditable service: CSRS CSRS annuity computation RETIREMENT
Q: I am employed by the Defense Department under the Civil Service Retirement System. My service computation date is Dec. 17, 1977, and I will turn 62 on Nov. 16. Prior to entering civil service, I earned enough quarters to qualify for Social Security. I have not selected a retirement date, but I am considering Dec. 31 of this year or January 2011 to receive a payout from the National Security Personnel System. If I retire Dec. 31, I will be reimbursed for all of my annual leave, but after that reimbursement I would be limited to the maximum amount of carryover, which is 240 hours. If I don’t take any additional leave for the year, I would have approximately 208 hours of “use or lose” annual leave.
First, since I earned enough quarters prior to entering civil service to qualify for Social Security benefits, will my CSRS annuity be reduced by some amount because I am eligible for Social Security? If so, how can I determine the amount? Also, if it is going to be offset, should I go ahead and apply for Social Security benefits, or wait to draw at a later date?
Second, my wife is employed and expects to continue working after I retire. I noted that the reduction for a survivor’s benefit under CSRS amounts to several hundred dollars a month. Is it better to take the reduced annuity to have the benefit or purchase term insurance to provide the benefit to the spouse?
Third, to ensure that paperwork is processed in time to avoid delays in receipt of annuity, how much in advance should I submit my retirement papers?
A: As a pure CSRS employee, your annuity won’t be affected by any Social Security benefit to which you may be entitled. However, because you will be receiving an annuity from a retirement system in which you didn’t pay Social Security taxes, your Social Security benefit will be affected by the windfall elimination provision. The WEP reduces the Social Security benefit of anyone who has fewer than 30 years of substantial earnings under Social Security. As is true of all Social Security benefits, the benefit amount will also be reduced proportionately for every year you are under full Social Security retirement age when you apply for it. Full retirement ages range between 65 and 67, depending on your year of birth.
By law, you must provide a full survivor benefit for your wife unless she agrees in writing to a lesser amount or none at all. It’s up to the two of you to decide whether it would be better for you to elect and pay for a survivor annuity or for you to receive the money in your own annuity.
While there’s no set date for submitting your retirement papers to your personnel office, the Office of Personnel Management recommends that you do so at least three months before the date you’ve set to leave. That will give OPM time to review the paperwork and resolve any questions that may arise. When they are done, they’ll send your application to your payroll office, which can begin its review. Just remember, your application can’t be forwarded to OPM until you are off the agency’s roll. Only then will OPM be able to adjudicate your case.
Tags: annuity, Civil Service Retirement System, CSRS, NSPS, Offset, OPM, SOCIAL SECURITY, surivivor benefits, WEP, windfall
OWCP and Social Security
May 20th, 2010 | Benefits RETIREMENT
Q: I am a 66-year-old U.S. Postal Service employee who was born in 1944. I had planned to retire with 15 years of service this month; I thought that I would have recovered from on-the-job injuries by this time. I had already signed up for Social Security to begin on my 66th birthday (this month), but now my doctor says he needs to do more surgery on both arms before he will release me at maximum medical improvement. Also, I keep hearing that a voluntary early retirement is on the way and want to wait a little while to see.
Can I receive payments from Office of Workers’ Compensation Programs and Social Security at the same time? I know that 15 years of my Social Security benefits come from my USPS employment, but what about the other 35 years?
A: Nothing prevents you from receiving both your workers’ compensation payments and a Social Security benefit. Because you have already reached your full retirement age under Social Security, you may earn OWCP benefits without a reduction in you Social Security benefit.
Tags: disability, OWCP, retirement age, SOCIAL SECURITY, workers comp, Workers' compensation
Leave limits and overseas work
May 19th, 2010 | Benefits
Q: I am a Federal Employees Retirement System employee and have just returned from an overseas tour. My annual leave ceiling while overseas was 360 hours (which is my current leave balance). Now that I am back in the U.S., will I be able to maintain the annual ceiling of 360 indefinitely if I only use “use or lose” time each year, or will the ceiling be adjusted at some point? I am planning for retirement and would like to keep as much leave on the books as possible for a lump-sum payout.
A: The ceiling which you had overseas became your new ceiling when you returned to the U.S. However, if you dip below that ceiling, the reduced amount becomes your new ceiling. For example, if your overseas ceiling is 360 and you have only 344 hours to your credit at the end of a leave year, those 344 hours will be your new ceiling.
Tags: LEAVE, leave ceiling, leave limits, Lump-sum payout, RETIREMENT
Reservists and leave time
May 19th, 2010 | Benefits
Q: Just wondering what happened to the lawsuit about reservists having to take military leave days on their days off. I was a reservist from 1991 to 2007. I don’t think it really affected me more than 2-3 years, but I’m still interested.
A: You are referring to the 2003 opinion from the U.S. Court of Appeals for the District of Columbia. It held that agencies should have allowed 15 workdays of military leave for reserve training each year instead of 15 calendar days, which was the practice before the law was amended on Dec. 21, 2000, to allow reservists to take hourly leave in hourly increments. As a result of this decision, some employees may have mistakenly been required to take annual leave or leave without pay to complete their reserve training assignment. Claims for improperly charged leave or LWOP can go back as far as Sept. 30, 1980. If you think you have grounds for filing a claim, you should get in touch with your personnel office to find out the procedures for filing a claim and the time limits for doing so.
Tags: Guard and reserve, LEAVE, Military leave, reservist
VA disability, Social Security and retirement
May 19th, 2010 | Benefits CSRS annuity computation RETIREMENT
Q: I am a Vietnam vet and plan to apply for disability with the Veterans Affairs Department based on one of the illnesses caused by Agent Orange. I was in the Army for two years. I also plan to retire under the Civil Service Retirement System with 37 years of service in about 10 months. I am also eligible for a small Social Security check. If VA grants my service-related disability will my CSRS or Social Security check be reduced by the amount of the VA disability payment?
A: No, neither payment would be reduced.
Tags: CSRS, disability pay, RETIREMENT, SOCIAL SECURITY, VA
Debunking another Congress myth
May 19th, 2010 | RETIREMENT
Q: I read your earlier article about Congress, and it cleared up some misconceptions, which I appreciated. However, stating that members of Congress can’t retire at the same level of pay after only one term wasn’t really the big question. What the American public is upset about is that they can retire at any level after only one term when people in the military, the federal government and the private sector have to work 20 to 30 years to earn a modest pension. This was not explained in your answer. They can still retire after only one term. It is appalling, but I guess very lucrative if all you have to do is get elected once. They shouldn’t get any annuity after only a few years of service; I guess I’m in the wrong line of work.
A: That would be appalling if it were true, but it isn’t. To be eligible to retire, a member of Congress must have a minimum of five years of service as a member, a congressional employee, or both, and be covered during his last five years by retirement deductions or deposits. And he would only be eligible for that retirement at age 62. Paralleling the retirement rules for law enforcement officers and firefighters, he could also retire at age 50 with 20 years of service or at any age with 25.
Tags: Congress, minimum service, RETIREMENT
Partial military buyback?
May 19th, 2010 | RETIREMENT
Q: Can a retired military member elect to buy back only a portion of his military time?
A: If your active-duty service was continuous, the answer is no. If you were on active duty during separate, distinct periods of time, you can chose the period (or periods) of time for which you want to make a deposit.
Tags: buyback, buying back time, military buyback, military deposit, military service
Military deposit interest rates
May 18th, 2010 | Creditable service: CSRS Creditable service: FERS
Q: I just received my military service deposit amount plus accrued interest on my military time. The deposit amount for my service from August 1968 to August 1972 was $896, with $3,330.43 in accrued interest, for a total of $4,226.43. The accrued interest seems awfully high. The interest accrual history runs from October 1986 ($103.88) to October 2009 ($166.22).
A: I can’t tell whether the final number you got is correct. What I can tell you is that annual interest rates have been high after Dec. 31, 1984. Before that, they were a flat 3 percent. After that, market rates were applied. For example, the 1985 rate was 13 percent; 1986, 11.125 percent; 1987, 9 percent; 1988, 8.375 percent; 1989, 9.125 percent. And so on. In fact, the smallest amount of interest to be assessed is in 2010, at 3.125 percent. When you realize that interest is compounded, year after year, it’s easy to see why the final number balloons the longer you wait to make a deposit.
Tags: interest rates, military buyback, military deposit, military deposit interest, military service
Full-time temp work and retirement
May 18th, 2010 | Creditable service: CSRS Creditable service: FERS
Q: When I was first hired as a federal employee in 1986, I believe my first few months were as a full-time temporary employee before I became a full-time permanent employee. Do these first few months count as creditable service time toward my retirement?
A: They won’t count unless you make a deposit for that time to the retirement fund.
Tags: temp, temporary employment
Military service and leave time
May 18th, 2010 | Annual leave
Q: I am a federal employee working under the Federal Employees Retirement System. I have served approximately 7.5 years on active military duty, either as an active-duty soldier or as a reservist activated under Title 10.
I have bought back the 7.5 years of military time. In doing so, am I entitled to receive the equivalent of annual leave time that I would have received had I been employed with the federal government? If so, will it be calculated at a rate of four hours per pay period or the six hours that I am currently accruing?
A: Accordng to the Office of Personnel Management: “For nonretired members, full credit for uniformed service (including active duty and active duty for training) performed under honorable conditions is given for annual leave accrual purposes.”
Tags: leave accrual, leave rate, Military leave, military service, military time
Leaving law enforcement, staying in government
May 18th, 2010 | Special category employee retirement
Q: If I was in a law enforcement-covered position for eight years, then took a noncovered position for seven years, then moved back to a covered position, what time would count toward the LEO-covered retirement? I was told that as long as you had served three years in a covered position, you were vested and your service would continue in the special-category retirement as long as you had no break in federal service.
A: As long as you are in a primary law enforcement position for the requisite period of time and have a total 20 years of covered service, you will be eligible for retirement under the special provision. Those years don’t have to be consecutive to qualify you for that benefit.
Tags: law enforcement, law enforcement retirement, LEO, LEO retirement, special category retirement
Military buyback and leave accrual
May 18th, 2010 | Annual leave Creditable service: CSRS Creditable service: FERS
Q: I will soon be accepting a GS-13 position with the Department of Homeland Security. I am retired military and understand the buyback system; my question pertains to leave accrual. How will leave accrual be determined if I choose (or choose not to) to buy back my military time?
Also, I have two deployments for which I received an Armed Forces Expeditionary Medal. Is that time automatically approved for leave accrual?
A: Unless you make a deposit for your active-duty service and waive your military retired pay, you’d only get leave accrual credit for those periods of service when you were participating in a campaign or expedition for which a campaign badge was authorized.
Tags: buyback, LEAVE, leave accrual, military buyback, military retired pay
CSRS vs. FERS retirement
May 14th, 2010 | RETIREMENT
Q: I resigned in 1994, withdrew my retirement of $20,000 from CSRS. At that time, my SCD was January 1974. Came back to civil service in 1996. At that time, I was given the choice of CSRS or FERS. I chose FERS. My SCD was recalculated to January 1977 with 10 years frozen service. I have two questions: Am I required to pay back the withdrawal in order for the 20 years (1974 to 1994) to count toward retirement? And what exactly is frozen service? Will it affect my retirement years? Right now,based on my SCD,I have 33 years. I’m concerned that if I don’t pay the $20,000 back, I really only have 23 years. I’m 54 years old.
A: Since you took a refund of your retirement deductions after February 28, 1991, you will have that time credited in determining your eligibility to retire. However, it won’t be used in computing the CSRS component of your annuity unless you redeposit the amount that was refunded to you, plus accrued interest. If you don’t, the only annuity to which you’ll be entitled will be the one based on your FERS service.
Involuntary retirement
May 14th, 2010 | Special category employee retirement
Q: I am 56 with 28 years of service. I owe a deposit for two years of that service when I was under FICA (1979-80) and CSRS (1981-83). When I left, I withdrew my CSRS retirement funds. Will I have to make that deposit to get credit for that two years of service if I retire under a FERS Involuntary Discontinued Service Retirement? I am considering this option because I am newly disabled and can’t work a full day, but I’m not sure if I would qualify for FERS/SS Disability.
A: As a FERS employee, the only way you can get credit for any of that time is by making a deposit for your part-time temporary service and/or a redeposit for that period of service where you took a refund of your retirement contributions.
Tags: disability, RETIREMENT
Combined retirement
May 14th, 2010 | RETIREMENT
Q: I transferred to the inactive Naval Reserve in August 1994 with 20 years of service, and I still draw retirement from the Navy. I work for the U.S. Postal Service (under FERS) and I am eligible to retire from the Postal Service in August 2012 with approximately 15 years of service. I know of one individual who claims to have combined his retirement from the Air Force with his retirement from the FAA several years ago. He was Civil Service when he retired from the FAA. What are my options at retirement from the Postal Service? Is there a specific way that I need to set up my retirement that would be beneficial to me?
A: Employees always have the option of making a deposit to the civilian retirement system for any years of active-duty service in the military. As a FERS-covered employee, doing so would not only increase your civilian service time but be used in the computation of your annuity. The amount of the deposit would be 3 percent of your basic pay while on active duty, not including any allowances or differentials you may have received, plus accrued interest. Making that deposit would have no effect on any reserve retired pay to which you are entitled. Check this website’s back file for directions on how to find what you owe and how to make the payments, if you decide to do that.
Tags: Postal Service, retire