Ask The Experts: Retirement

By Reg Jones

Health benefits

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Q: I understand that to be eligible to carry Federal Employees Health Benefits  coverage into retirement the individual must, have at least five years of consecutive coverage under the Federal Employee Health Benefits Program, or have been  covered since your first  opportunity to enroll. My question concerns a federal employee who is covered under their spouse’s FEHB. If the spouse dies, is the survivor still covered?

A: If you were covered under the self and family option of an FEHB plan when your spouse died, you would continue to be covered.

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Census work

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Q: I worked for the Census temporarily in 2000.  Would those months of service count toward retirement under the Federal Employees Retirement System?

A: No.

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Annuity eligibility

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Q: I will be eligible for retirement in 2011 with 35 years of service under the Civil Service Retirement System.  I have just heard that I will need to work 40 years to get 80 percent of my salary.  What percentage will I receive if I retire with 35 years of service.

A: To receive an annuity that equals 80 percent of your highest three years of average salary, you would have to have 41 years and 11 months of service and owe no deposits or redeposits. To figure out how much your annuity would be, use the following formula, 0.015 x your high-3 x five years of service + 0.0175 x your high-3 x five years of service + 0.02 times all remaining years of service. Note: Any unused sick leave you might have would increase the amount of your annuity and wouldn’t be subject to the 80 percent limit.

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Retiring after 20 years

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Q: I will have completed 20 years under the Federal Employees Retirement System  in mid-2015 at the age of 58.  Because I wish to continue contributing to and receiving Federal Employees Health Benefit, I do not want to go the deferred annuity route.  If I retire with 20 years service at age 58, will I be able to receive my annuity and the special supplement until age 62?  If so, will I be able to work in a private sector job and still receive my annuity and supplement?

A: You aren’t eligible to retire. Unless you are a law enforcement officer, firefighter or air traffic controller, the earliest you could retire with 20 years of service would be age 60. You would then be eligible for the special retirement supplement. However, if your earnings from wages or self employment exceeded the Social Security annual earnings limit, your SRS would be reduced or eliminated.

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Re-employed annuitant

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Q: I took an early-out retirement in 2003 and have been working for the Army in Hawaii  as a contractor since 2004.  I have a few questions I’d like confirmation on.  My position has been insourced, and I will be offered a job as a rehired annuitant to provide critical skills missing from current workforce.  Under this critical skills scenario, I have been told there will be no decrement to my current CSRS Offset retirement monthly payment to offset my government salary, is that correct?  Will I have any type of 401(k)-like program that I can contribute pre-tax dollars to?  Do I get to participate in the Federal Employees Group Life Insurance, Flexible Spending Account, and long-term care program? I took my government health insurance into retirement so assume I will continue to receive my health insurance through deduction from my retirement annuity, can you confirm?

A: If you are appointed to a position that allows you to receive both your annuity and the full salary of your new position, you will not be considered to be an employee for retirement purposes. In other words, you couldn’t elect to have retirement contributions withheld from your pay; as a result, you would not be eligible for either a supplemental or a redetermined annuity. Further, you would not be allowed to participate in the Thrift Savings Plan. However, if your employment was over one year, you would be able to enroll in the Federal Employees Health Benefits and the Federal Employees’ Group Life Insurance programs, even if you had not been covered as a retiree. If you already have such coverage as a retiree, the premiums would be deducted from your annuity.

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Early outs and special retirement supplements

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Q: If offered an early out by an agency, which presumably would allow for the special supplement to apply (the Office of Personnel Management website only says you “may” be entitled to), how is that computed? From what I read on the OPM website, the base amount figured on a 40 year pay into Social Security divided into the number of years of Federal Employees Retirement System service (in my case 24/40). Does the base figure assume I paid into Social Security up through 62 years of age (even though I haven’t); or the figure what I actually have paid into Social Security, say through my minimum retirement age? No one in my human resources office or OPM seems to know for sure?

A: You’ll find the methodology for computing the special retirement supplement
in OPM’s Civil Service Retirement System and FERS Handbook for Personnel and Payroll Offices. Go to http://opm.gov/retire/pubs/handbook/C051.pdf and scroll down to Part 51A2

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Disability and retirement pay

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Q. I am currently a Defense Department employee and also retired Air Force officer enrolled in the Federal Employees Retirement System.  I served 21 years active military service.  I am making deposits to Defense Finance and Accounting in order to potentially buy back my post 1957 military service time at time of my final retirement. During my military service,  I sustained injuries performing hazardous duty (instrumentality of war).  As a result, I have a 90 percent VA disability rating and Air Force Combat Related Special Compensation (CRSC) at the 90 percent rate.

If I decide to combine my Military Service time with my FERS annuity in the future, would I have to surrender Air Force retirement pay, VA disability, CRSC? Currently the majority of my monthly compensation is VA Disability Compensation and CRSC. I reviewed regulations that seems to apply.  Can you please clarify them for me?

A: If your service-connected disability was either incurred in combat with an enemy of the United States or caused by an instrumentality of war and incurred in the line of duty during a period of war, you wouldn’t have to waive your military retired pay when you retire from your civilian job. However, your agency cannot take your word for this. Proof must be provided by your branch of service. Check with your personnel office for the procedure to use to obtain such proof.

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Potential annuity

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Q: What will my high-3 be if I retire at the age of 55 with 34 years of civil service?  My computation date is Nov. 10,1980. My retirement date is planned for Nov. 10, 2014.

A: I’ll give you the formula. You’ll have to do the arithmetic.
0.015 x your high-3 x 5 years of service, plus
0.0175 x your high-3 x 5 years of service, plus
0.02 x your high-3 x all remaining years and full months of service.
Additional months are created if you have any unused sick leave. You can find out how many you have by dividing your total unused sick leave hours by 174. Any hours left over are dropped.

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CSRS retirement and life insurance

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Q. 1) Suppose one retires under the Civil Service Retirement System on Sunday, Oct. 31. I like to ask whether that is an especially poor date because I heard: a) in computing the high-3, only 30 days are used and thus Day 31 is not used; b) if one retires any other day except for the 31st, an extra day is added in computing high-3; c) two days of annuity is lost since salaries are not paid/prorated on weekends while annuity is paid/prorated.

Yet, Human Resources said that the above is untrue because by some complicated formula, Day 31 is considered in computation and counted. Also, annuity is also not prorated on weekends either.

Will you please clarify this mystery and let me know your opinion whether retiring on Oct. 31 is truly an unadvisable date and whether one should, instead, delay to Monday, Nov. 1?

2) I understand people cannot carry the Federal Employees Group Life Insurance Part A into retirement unless he/she was enrolled in it for the immediate five years prior to retirement or if there was specials circumstance preventing him/her from being enrolled for five years. Yet, there was no open season for many years.  Thus, for that reason, people cannot enroll, and that is beyond the employees’ control.

Is that enough reason for retiring CSRS employees to be eligible to enroll into Part A into retirment?

A: Question 1:To find out how the Office of Personnel Management computes a high-3 average salary, go to http://opm.gov/retire/pubs/handbook/C050.pdf and scroll down to Section 50A2.1-4.
Question 2: No, the fact that OPM doesn’t hold regular open seasons for enrollment in the Federal Employees’ Group Life Insurance Program is not a basis for waiving the five-year or first opportunity to enroll requirement.

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Special retirement supplement

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Q: I retired at the end of 2007 but continued to work part time until February .  I “failed” my first earnings test in June 2009, and my supplement was suspended that August.  My earnings for 2009 were similar to 2008, but my earnings for 2010 will be below the threshold for a supplement reduction.  When and how will my supplement get turned back on?

A: According to the Office of Personnel Management, special retirement supplements are reviewed when it receives information on the annual survey they sent to retirees or from either the Social Security Administration or the Internal Revenue Service if a survey is not received. If the earnings limit is exceeded, the SRS is reduced or stopped effective July 1. If the next year’s survey (or information from SSA or IRS) shows that income has dropped, the SRS will be restored either in part or to its previous level. The date of the restoration depends on when the information is received.

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State hospital employment

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Q: I currently work for the federal government.  I previously worked for a
state hospital back in the ’70s.  Will/can that state time count towards
my retirement?

A: No, your work for the state hospital won’t count.

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Early out offers

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Q: I understand the federal government is beginning to consider offering early outs. Can you confirm this?

A: No.

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Cost-of-living adjustment

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Q: If I retire on Dec. 31 at the age of 56 with more than 20 years in law enforcement, would I immediately be eligible for any cost-of-living adjustment for retirees paid at the beginning of the new year, or would I have to wait another full year for the increase?

A: No, you wouldn’t be eligible for any cost-of-living increase in 2011. You would receive your first COLA increase in your January 2012 annuity payment. The amount would be 11/12ths of that increase. To receive the full COLA, you would have to retire no later than Nov. 30, 2010.

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Unused credit hours

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Q: I know that unused annual and compensatory leave is paid in a lump sum upon retirement. Are unused credit hours also paid out as lump sum?

A: Yes. Up to 24 credit hours may be paid in a lump sum at the hourly rate of pay you were earning on the day you retired.

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Re-employment

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Q: I retired four years ago as a state university extension service employee in the Civil Service Retirement System retirement as well as state retirement.  My health benefits were and continue to be through the state retirement system.  I now have an opportunity to work part-time for another Agriculture Department agency.  If I become a part-time employee of that agency, will it affect my CSRS benefit?

A: As a rule, the salary of your new position would be reduced by the amount of your annuity. You’ll need to check with the new agency to see if there would be an exception to this rule.

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FERS retirement after 62

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Q: I became fully eligible for Social Security at 66.  I am now 67 and will work until I am 68.  For each year, limited to five years, Social Security will increase the benefit by 8 percent a year if drawing Social Security is deferred.  Is there a similar provision for Federal Employees Retirement System retirement?

A: No. However, a FERS employee who attains age 62 and retires with at least 20 years of service will have the first number in his annuity formula increased from 0.01 to 0.011. The new formula would then be 0.011 x high-3 x years and full months of service.

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TVA buy back

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Q: How would I apply for credit or buy-back other federal service time
(specifically Tennessee Valley Authority time) under the Federal Employees Retirement System?

A: You would need to take a refund of the retirement contributions you made to TVA and deposit them, with interest, if applicable, in the Civil Service Retirement and Disability Fund. Your personnel office can help you complete the paperwork needed to do that.

Returning to federal work

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Q: I was an attorney for the Justice Department from 1998 to 2001, and then an attorney at IRS from 2001 to 2005. Then I quit the government, quit practicing law and completely changed careers. Here, five years later, I’m considering looking at federal employment again.

My questions are:
1. What exactly is career status?
2. Do I have it?
3. Does it matter?
4. Does it apply even if I’m applying for a job that has little at all to do with my former career?

A: In the federal government, anyone who is hired into a career-conditional position in the competitive service and completes three years of service with successful performance ratings is a career employee. You can find out if you were in the career service by looking at line 34 on one of your Standard Form 50s to see if box 1, Competitive Service, is checked. If box 2 is checked you were in the Excepted Service.
If you were in the competitive service and reach career status, that means you have permanent reemployment status and can be reemployed without further examination. However, that doesn’t mean that you don’t have to meet the qualification requirements of the job for which you are applying. You will have to meet those, not only for the occupation but for the grade level you are seeking.

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Sick leave accrual

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Q: I plan to retire in December 2011. I will have 42 years in the Civil Service Retirement System with the U.S. Postal Service max annuity is 80 percent, but I will have 18 months of sick leave on the books. How will I be compensated for the sick time?

A: At 41 years and 11 months of actual service, you will have reached the maximum annuity of 80 percent. The Office of Personnel Management will offer you the choice of receiving a refund of the additional month’s retirement contributions or using them to buy a little additional annuity. Like your unused sick leave, it won’t be subject to the 80 percent limit but will be added to your earned annuity.

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Refund for switch

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Q: I switched over to the Federal Employees Retirement System in 1986, with less than five years of service, and I withdrew my money from the Civil Service Retirement System, but not all of it. What happened to the money that I did not receive?

A: You were automatically covered by FERS because you had fewer than five years of CSRS service, so that time was automatically converted to FERS service. Since the retirement deductions needed to pay for FERS service were less than those for CSRS, what you received was a refund of the difference.