Ask The Experts: Retirement

By Reg Jones

Creditable service

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Q: I have been on active-duty orders for the West Virginia National Guard since Nov. 8, 2009, in order to support the Defense Critical Infrastructure Program (DCIP) and the Critical Infrastructure Protection-Mission Assessments (CIP-MAAs). This executive order is the Homeland Security Presidential Directive (HSPD) – 7. I am not in direct support of OEF, however, we provide domestic security duty. Can this period of time be credited toward my federal law enforcement career, which is now on hold?

A: It will depend on the nature of the orders that led to your being called to active duty. You’ll need to share that information with your civilian agency, which can check with OPM to determine if it qualifies. If it does, your time on active duty will be fully creditable toward your federal law enforcement career once you return to your civilian job.

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Re-employment after retirement

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Q: I am employed in a law enforcement position and will face mandatory retirement in two years at age 57. If I seek employment between the ages of 57 and 62, will my Special Retirement Supplement be reduced if I exceed the earnings limit?

A: Yes.

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Legislative and executive branch service

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Q: I have 10 years of legislative branch service and 10 years of executive branch service, all under FERS. If I retire under the executive branch, do I still receive a 1.7 percent per year worked annuity for my legislative branch service? Or are all the years of legislative service treated the same as executive branch service and receive only a 1 percent per year worked annuity?

A: Your legislative branch service will be computed using the enhanced formula; the remaining years will be computed using the standard formula.

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Survivor benefits

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Q: My father retired from the U.S. Postal Service with an annuity in the late 1980s. He passed in August of this year and the OPM retirement person says there are no survivor benefits except to a spouse or disabled child. My father was divorced and never remarried. I am his only child and not disabled. She explained that the annuity was paid out to my father during his life and would be prorated from the beginning of the month he received a check to the date of his death, a monthly health insurance deducted and no other funds are available. I have submitted all the required forms. Is this true? This seems to contradict the explanations on their website.

A: Because your father retired after July 1, 1986, he received a combination of his own retirement contributions and those of the government in his monthly annuity payments. The portion that represented his own contributions was tax free because he had already paid taxes on them. If your father had no one who was eligible for a survivor annuity when he died, his unexpended retirement contributions would be paid in a lump sum according to the standard order of precedence. In this case, it would mean that the money would go to his child or children in equal amounts. On the other hand, if there is a court order on file that granted a survivor annuity to his former spouse, those contributions would constitute a tax free part of her own survivor annuity.

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Retirement age

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Q: I am a federal law enforcement agent covered under FERS. If I turn 57 at the end of January 20XX, can I work until the end of that year or do I have to retire at the end of the month when I turn 57?

A: You will have to retire on the last day of the month in which you reach mandatory retirement age.

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Social Security supplement

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Q: I am a Postal worker and will have my 30 years on 04/30/2013. I am under the FERS system & will be 57 years old if I retire then. Can you explain about “supplemental Social Security” or something that makes up the difference of what I would receive if I were 62 years old?

A: The special retirement supplement is intended to bridge the gap between the date on which you retire and age 62, when you’ll first be eligible for a Social Security benefit. You can do a paper and pencil estimate of what that might be by using a simple formula. Multiply the Social Security benefit estimate provided to you by the Social Security Administration by your total years of FERS service, rounded up to the next higher year. Then divide the product by 40. Alternatively, you can use the software available at www.FEDbens.us. Two things to remember about the SRS: First, it isn’t increased by cost-of-living adjustments. Second, if you exceed the annual Social Security earnings limit, your SRS will be reduced or suspended. In 2011, the earnings limit from wages or self-employment is $14,160.

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VSIP in 2011 or 2012

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Q: Have you seen any articles or heard of any possibility of the DoD offering Voluntary Separation Incentive Payments this fiscal year or perhaps in FY12?

A: No.

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Unused sick leave at retirement

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Q: If I continue to work until I have actually worked 41 years and 11 months and I have accrued an additional 1,400 hours of sick leave, will I be paid for my sick leave?

A: No, you won’t be paid for your unused sick leave. Those hours will be added to your creditable service and used to increase the amount of your annuity. The 80 percent limit only applies to an earned annuity.

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Social Security

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Q: Why do spouses get a Social Security check along with their husbands when the spouses never worked a day to pay into it?

A: Because that’s the law and has been since it was passed in 1935. While it was assumed that a single retiree or disabled worker could survive on a Social Security benefit, a family could not. Therefore, benefits were extended to the spouses and children of retired or disabled workers.

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Overtime pay

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Q: Could you please tell me what year or when the law went into effect that states that overtime is not included when calculating a high-3?

A: To the best of my knowledge, overtime has never been considered to be a part of base pay when computing an employee’s high-3.

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CSRS-Social Security offset

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Q: I retired from the federal government on 12/31/2010 (at age 74) under the CSRS annuity plan. For many years, I also received Social Security benefits. I know there is an “offset” provision and my SS benefit will be reduced substantially. My question is: Will OPM notify SSA of my retirement automatically? Or do I have to tell SSA of my retirement?

A: You don’t have to do anything. OPM and the Social Security Administration routinely do computer matches to identify retirees whose work histories require that their Social Security benefits be reduced.

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Question about buyback

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Q: I had eight years of active duty after being honorably discharged from the Army in 2001. In 2008, I got a federal government job. I began to buy back my military time. I am leaving the federal government after years, but before I finish buying my time back. What are my options for the money? I do plan on coming back to the government some day. Can I just leave the money in there or will it be automatically refunded? Can I continue to contribute to it even though I am no longer a federal employee?

A: When you leave, you will be offered two choices. You can either leave your contributions and deposit in the retirement fund or you can receive a refund of both. If you return to work for the government, you can complete the deposit. (You cannot make any deposits while you aren’t employed by the federal government.) If you don’t return to work for the government, you can, at any time, ask for a full refund of your contributions and deposit.

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FERS retirement

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Q: I have spent 11 years on active duty and I immediately went to work for the federal government under the Federal Employees Retirement System. At this time I have a total of 32 years (22 years federal services and 10 years active duty). If I buy back my military time, may I retire at age 57 without any penalty? If not, what is my earliest retirement age without penalties under FERS?

A: Yes, if you make a deposit for your years of active duty service, you’ll be able to retire at age 57. And there won’t be any penalties.

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County employment and military service

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Q: I have five years, four months active duty that I believe I can buy back toward a federal retirement. I also have eight years as an engineer/paramedic for Marin County. Can I buy back any of my county time as a firefighter?

A: No, you can’t.

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Deferred retirement

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Q: I have 31 years of credible federal service and am 51 years of age. I would like to take an early retirement. I have been told I can take a “deferred retirement” until 2010 (56 years of age) without penalty. However, I cannot locate any formal OPM documents that clearly state this is accurate. Your thoughts would be greatly appreciated.

A: The information you are looking for will be found at www.opm.gov/retire/pubs/handbook/C045.pdf. Assuming that you are covered by FERS, you would be able to receive a deferred retirement at your minimum retirement age. If you are covered by CSRS, you wouldn’t be eligible until age 62. Note: FERS deferred retirees aren’t eligible to receive the special retirement supplement. Neither FERS nor CSRS deferred retirees are eligible to re-enroll in the Federal Employees Health Benefits or Federal Employees’ Group Life Insurance Program.

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FEDVIP coverage

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Q: I know that the FEHB rules changed regarding coverage of dependents up to the age of 26, but what about the FEDVIP rules (vision and dental)?

A: As specified in law, the change in age applied only to the Federal Employees Health Benefits program.

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Three retirements

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Q: I am currently receiving military retirement pay for service with the U.S. Navy from 1960 to 1980. I began drawing my full Social Security pay at 65 years and 10 months. I began working under CSRS in 1980 and am planning on retiring in 2013 or 2014. My question: Since all of my time for my Social Security was from my military service and not CSRS service, will I be under either the GPO or WEP provisions when I do retire from CSRS? Can I receive all three of my retirements without any penalties of GPO or WEP?

A: Unless you have at least 30 years of substantial earnings under Social Security, the windfall elimination provision will reduce the amount of your Social Security benefit. On the other hand, you’ll be able to receive an unreduced CSRS annuity and continue to receive your military retired pay. The government pension offset would only apply if you were eligible to receive a Social Security spousal benefit based on your wife’s Social Security-covered work record.

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FERS high-3

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Q: Is there a time limit on when you have to hold that salary rate for it to be counted for a good year? Here is an example: If I get awarded a QSI (quality step increase) in the month of October and hold that rate for three months before my next step goes into affect in January, will that rate I received in October for three months be counted as a good high-3 figure?

A: Your question is based on a false premise. A high-3 is calculated by adding up the base salary you received for each pay period during your highest three consecutive years and dividing it by the number of pay periods. Most employees are paid every two weeks, which means that the cumulative base pay they receive over a three year period would be divided by 156 (3 x 26 pay periods.)

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Special retirement supplement and re-employment

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Q: I am a 57-year-old FERS annuitant who retired in 2010 with 33 years of service. I am considering going back to work part-time for my former agency (Dept of Energy) in a position that will allow me to receive both my annuity and the full salary of the new position. In addition to my FERS annuity, I am also receiving a special annuity supplement of about $12,000 per year. Normally, if I become employed and earn a salary I will lose $1 of the special annuity supplement for every $2 I earn over the IRS limit of about $14,100 per year. Will I lose the special annuity supplement if I become a part-time Fed and earn over the limit, or is the supplement protected in the same way that my annuity will not be offset by my earnings?

A: Your special retirement supplement will not be protected. It will be reduced in the manner you described if you exceed the Social Security earnings limit.

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2012 early retirement

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Q: I’m retired from the Army and my wife has the age and years to retire if her office offers early retirement. Can you tell me if there is any chance if the Department of Labor might offer early retirement in 2012?

A: No, I can’t. Even a fortune teller would shy away from answering that question.

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