Ask The Experts: Retirement

By Reg Jones

Service credit receipt

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Q: I paid my service credit in full in 2005 but can’t locate my paid receipt which I need for retirement.

A: Your CSD number should be sufficient proof. However, if you want additional proof you can go to scbillings@opm.gov.

 

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Spousal benefit

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Q: I am a 1998 CSRS/FERS transfer. My wife is retired and collecting a Social Security benefit. Next year when I turn 66 I thought I would take a spousal benefit off of my wife’s Social Security. Is it not true that because I have more than five years in FERS there is no GPO reduction in that spousal benefit? About a year later I plan to retire and start receiving my annuity of CSRS/FERS retirement. Even though I then would be receiving a pension that partially consists of CSRS where no Social Security was paid, wouldn’t there still be no GPO as I had completed more than five years in FERS? I wanted to do this so I could wait until age 70 before collecting my Social Security off of my own earnings, thus reducing the WEP penalty as I would have a total of over 25 years of Social Security earnings.

A: Because you have at least five years of creditable service under FERS, any Social Security spousal benefit you are entitled to won’t be affected by the government pension offset.

 

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Postal retiree and health insurance

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Q: If I retired from the postal service but am still carrying the medical coverage through them. Is it necessary to elect the Part B coverage? I am not drawing Social Security because I am not eligible until I turn 66. I am under the Civil Service portion of the postal retiree plan and am still carrying my spouse on my medical coverage.

A: You don’t have to sign up for Medicare Part B if you don’t want to. It’s optional.

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Agency reassignment in existing vacancy

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Q: I’ve been informed that I will be “reassigned within the agency to fill existing vacancies”. My agency is NARA and I work at two locations: Washington, D.C., and College Park, Md. Could they offer me reassignment to another location within the NARA organization, other than these two places? What would be my preference for the existing vacancies, with 30 percent disabled veteran status and 14 years with the federal government, and 4 years and 11 months of military service? I’m a GS-11, step 5.

A: A reassignment at the same grade or pay can be made anywhere within your commuting area. Your agency can tell you what that is. In addition, if you signed a mobility agreement when you went to work for them, they could assign you to a position outside your commuting area. Your veteran status, years of service and grade have nothing to do with what you are offered or what you can accept.

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Estimate of retirement annuity

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Q: Is it possible for me to determine how much of an annuity I might expect to receive if I were to obtain a government job? I have approximately nine years of prior federal government service and I was under the CSRS retirement system. I also have two years of military time that I would like to include if possible. I would plan on buying in on my military time but not repaying my CSRS retirement that I withdrew at the time I left government service in 1985. I am 62 years old and would like to work between one and three more years under CSRS Offset. If my salary with the government job I am attempting to get is $100,000 per year, what kind of annuity might I expect?

A: If you returned to work for the government and made a deposit for your period of active duty service, you’d get credit for that time when your annuity was computed. If you didn’t redeposit the refund of your retirement contributions. plus accrued interest, your annuity would be actuarially reduced based on the amount you owe and your age when you retire. To do that computation, you’d have to know both how much you owe and the present value factor for the age at which you retire. Since you’d be retiring on or after reaching age 62, your annuity would automatically be reduced by the amount of Social Security benefit you earned while employed under CSRS Offset. You’d also be subject to the windfall elimination provision, which would reduce your annuity if you had fewer than 30 years of substantial earnings under Social Security. With that many variables involved, it wouldn’t be possible to provide you with an estimate of your annuity.

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Last day of employment

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Q: Do you know where I can find the OPM directive that states you must report to work on your last day? I cannot find anything about this topic on the Internet. Someone told me it was a Comptroller General’s decision (circa 1954). I was unsuccessful finding that.

A: There is no such requirement. That’s why you can’t find it.

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FERS and retirement

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Q: If an employee is any age with 25 years of service or age 50 with 20 years of service, will the employee be penalized in the case of an early-out retirement if OPM has determined that the agency is undergoing a major reorganization, reduction in force, or transfer of function?

A: Those age and service combination would only be available in the circumstances you mentioned and you were one of those to whom an offer of early retirement was made. If you were a CSRS employee, you annuity would be reduced by 2 percent for every year you were younger than 55. There wouldn’t be any age penalty if you were a FERS employee.

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Retirement formula

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Q: I am 54 with 21 years of combined military and federal service. I fall under the CSRS plan. The highest paygrade I have had is GS-7. How do I figure out my pay for retirement, what is the formula? I would like to get a general idea of how much my pay would be at this point and time if I could retire.

A: For CSRS employees, the formula is:

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

You can either get out a pencil and paper and do the arithmetic or go to www.FEDbens.us and use the handy software you’ll find there.

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Retirement health benefits

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Q: My husband, five years my senior, retired last year and now has Medicare. I have no insurance. I am 60 and unemployed. Will Medicare cover me for health care, and if so, what will the cost be?

A: According to the official Medicare website, “Medicare is not offered as a family or dependent benefit. This means all people who have Medicare must qualify on an individual basis. For example, a person under age 65 does not automatically receive Medicare because their spouse is 65 or older and enrolled in the Medicare program.”

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Retirement calculations

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Q: I am a former government employee with more than nine years of service under CSRS and 22 months of military service. When I left the federal government in 1985 I withdrew all of my contributions to CSRS. I am 62 years old and I am now considering getting a federal government job with the hopes of working long enough to get an annuity under CSRS offset. My understanding is that the calculations of your high-3 are based upon three consecutive years of pay. Is this correct? Would I need to work three years to be eligible for an annuity? Or if I only worked one year, would my high-3 be based upon the high three years that I had under my prior government job?

A: A high-3 is based on an employee’s three highest consecutive years of average salary. If you returned to work for one year, your high-3 would be based on that year’s basic pay plus the last two years of your previous federal employment. Note: Unless you redeposited the retirement contributions that were refunded to you, including accrued interest, when you retired your annuity would be actuarially reduced based on the amount you owe and your age.

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FERS retirement question

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Q: I’m in my 30s and I’m under the Federal Employees Retirement System. My MRA is 57. I’ve worked for five years in federal civil service and will buy back five years of military service in the next few months. This will give me a total of 10 years combined service. If I left government work for the private sector or to start my own business would I still be eligible to receive a retirement benefit at 57? This would put me at the MRA with 10 years of combined service. Also, if I’m eligible for a retirement benefit at 57, how would I file for the benefit assuming I would no longer be a government employee?

A: You would be eligible for a deferred retirement when you reach your minimum retirement age. Under the MRA+10 provision, your annuity would be reduced by 5 percent for every year you were younger than 62. You could, of course, delay the receipt of your annuity to a later date to reduce or eliminate the age penalty. As an MRA+10 retiree, you wouldn’t be eligible for the special retirement supplement, which approximates the Social Security benefit you earned while covered by FERS, nor would you be able to re-enroll in the Federal Employees Health Benefits or Federal Employees’ Group Life Insurance programs. To apply for a deferred retirement, you’d need to complete a copy of Standard Form 3107 and send it to OPM. You can download a copy by going to www.opm.gov and clicking on Find Form(s).

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RIF and retirement

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Q: I’m 50 with a minimum retirement age of 56. I have 26 years of government service counting my military service (six years bought back). If I’m affected by a reduction in force before 56, do I lose my basic annuity and other retirement benefits?

A: No, you wouldn’t lose them. You’d be able to retire under the special age and service criteria: age 50 with 20 years of service or any age with 25. Any other benefits to which you’d be entitled, such as health and life insurance, would continue as long as you had been covered by them for the five consecutive years before you retired.

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FERS retirement question

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Q: I’m under the Federal Employees Retirement System and was planning to retire at minimum retirement age (56) with 31 years of combined civilian and military service. Six of those 31 years were under LWOP-US where I paid a military deposit for those years. Are those six years included as credible service for an immediate annuity or are they calculated as MRA+ 10 because I did not have 30 years of civil service years?

A: No, you won’t be retiring under the MRA+10 provision. You’ll receive an immediate, unreduced annuity because you will have reached your minimum retirement age and have at least 30 years of combined service.

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CSRS disability retirement

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Q: I am a CSRS employee who was disabled in 1984. I was approved for CSRS disability retirement on Jan. 24, 1985. I was approved for OWCP benefits. Now at 62 I am told I should convert from USDOL/OWVP compensation to disability retirement benefit. How does one compute the basic annuity? My retirement computed to Jan. 28, 1985, was as follows: $25,293 (high 3) for five years and four months of service which gave a basic annuity of $ 2,044, which computed to $843 per month. How much would that compute to in 2011?

A: Your annuity would be based on what it would have been had you retired on the date you went on workers comp, increased by any retiree cost-of living adjustments that have occurred since then. You’ll find a complete inventory of COLAs at www1.opm.gov/retire/annuity/cola/colalist.asp.

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Military service toward retirement

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Q: I am 68. I have three years and nine months of military service that I have bought in. On Sept. 30, 2011, I will have 2½ years of civilian service. Will I be eligible at that time for FERS retirement?

A: No, you won’t. You have to have completed five years under FERS to be eligible to retire.

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Health insurance

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Q: Is it possible for retired federal employee husband and wife to receive 100 percent medical coverage? Right now my husband has the family plan and we are getting 80 percent coverage. I was wondering if I could enroll as well and get the other 20 percent either with a the single or family plan.

A: No, you can’t do that. You can either have one family plan or two self only plans. If you want better coverage than you have now, you’ll need to do some research during the next Federal Employees Health Benefits program open season to find which plan gives the best coverage for the price.

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Buyout eligibility

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Q: I am 29 and I have been working for the government for a little more than five years. Am I eligible for the buyout? If so, how much would I be able to get?

A: If you were offered a buyout, there would be nothing that would prevent you from accepting it. Unlike early outs, you don’t have to be eligible to retire to accept one. The amount of the buyout would be whatever your agency is offering to all those employees it has identified as being surplus to its needs, not to exceed $25,000.

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Survivor benefits

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Q: My father is 78. He served in the Korean War, worked for the postal service for more than 30 years (letter carrier and postmaster) and retired from the postal service at 58. He receives an annual annuity and social security but is now in failing health and recently expressed concerns that my mother may not receive his annuity upon his death. I have searched the Internet and can find information about survivor benefits for current employees, but cannot find a section on survivor benefits for spouses after the death of a retiree. Can you help me understand the survivor benefits my mother would be eligible for so I can put my father’s mind to rest?

A: You’ll find what you are looking for at http://www.opm.gov/retire/pubs/handbook/C071.pdf and http://ssa.gov/pgm/survivors.htm.

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Impact on Social Security annuity of retiring at 60

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Q: My husband and I are both FERS employees. We are now 58 and plan to retire at 60. We will both meet minimum age and years of service requirements to receive the Special Retirement Supplement from age 60 to 62. What we cannot find out is how much our Social Security payment will be when we start receiving it at age 62 because we will not be working those two years (between 60 and 62) and thus not paying into Social Security past age 60. The yearly statement from the Social Security Administration assumes we will work until 62 in figuring the estimated monthly payment. Calculators all assume you will work at least until age 62, so there doesn’t seem to be any way to get a ballpark figure on how retiring at 60 will affect our Social Security annuity. How can we determine (albeit roughly) what our monthly Social Security payment will be at age 62 (that is, not counting two years of payment into Social Security from age 60 to 62)? Will retiring at 60 and not working those two years severely impact our Social Security payment or is the impact minimal?

A: The Social Security Administration has a benefit estimator at http://ssa.gov/estimator. Just enter 0 for ages 61 and 62.

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GEHA Basic and Medicare Part A and B

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Q: I have GEHA Basic and Medicare Part A and B. I take no prescriptions and go to the doctor very little, mostly to have tests done. I am considering dropping my Medicare B as I will have GEHA and Medicare A. I am interested in an unbiased answer.

A: Decisions like this are always personal. However, there are two things to consider before making a decision about dropping Medicare Part B. First, you need to review what benefits are included in Part B and decide whether you will need anything it covers that is not provided by your FEHB plan either now or in the future. Second, you need to be aware that if you drop your Part B coverage and want to re-enroll at a later date, you’ll have to wait for a general enrollment period, which is between Jan.1 and March 31 each year, wait for the coverage to be effective, which won’t start until the following July, and pay a 10 percent penalty for each full year you could have been enrolled in Part B but weren’t.

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