Ask The Experts: Retirement

By Reg Jones

Early out

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Q: I am a CSRS employee with 29 years, one month of service to date. I took the survey asking if I would consider early retirement and, if so, when. I said I would and would like to leave in December. I would be four months short of my 30 years. I have more than 600 hours of sick leave as well. What would happen to my sick leave?

A: After you met the criteria to retire, your unused hours of sick leave would be combined with any hours of actual service time that don’t add up to a full month and used to increase your total service time. You mentioned that you would be retiring four months shy of 30 years. In the initial calculation, your annuity would be 1/6 percent less for each of those four months. However, when your unused sick leave was added in, each additional month of credit would increase your annuity by 1/6 percent. For retirement purposes, 174 hours equals one month. So, if exactly 600 hours were added to your service time, your annuity would be increased by three months, with the leftover 78 hours discarded. Under this scenario, your final annuity would only be 1/6 percent less than it would have been if you had worked for a full 30 years.

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Retirement annuity

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Q: When someone re-deposits money withdrawn from the retirement fund, is the interest they paid included in computing their annuity? If it is not, does that money go into some kind of general account?

A: No, the interest paid is not included in the annuity computation. It goes into the Civil Service Retirement and Disability Fund and replaces the interest lost when the refund was made.

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Buyouts

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Q: If someone accepts a buyout, can they come back and work as a part-time contract employee?

A: According to OPM, “An employee who receives a Voluntary Separation Incentive Payment and later accepts employment for compensation with the Government of the United States within five years of the date of the separation on which the VSIP is based, including work under a personal services contract or other direct contract, must repay the entire amount of the VSIP to the agency that paid it — before the individual’s first day of re-employment.”

You’d need to check with your agency to learn if the nature of your contract employment would require you to repay the money you received.

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Disability retirement

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Q: Based on a medical condition, I am a disabled employee trying a new treatment but if it is not successful, my doctor recommends disability retirement (SSA and CSRS offset). If I do leave in a couple of months, I am planning on using my accrued annual and sick leave from approximately July 29 to approximately September 30. Note: My 36 months of continuous service is from 9/14/2008 (a Sunday) to 9/14/2011 (a Wednesday). I am a reinstated employee who separated in 1987. I understand that there are terminal leave provisions for the last pay period prior to retirement. Do you know if this applies in this situation? Also, does being on sick leave and using annual leave as a substitute for sick leave affect my 36 months of continuous service? Do I need to be in work status on 9/14/2011 or 9/15/2011?

A: While your doctor might recommend that you go on disability retirement, only OPM and the Social Security Administration can make that determination. Further, if you are covered by CSRS (or CSRS Offset), you would have to have five years of creditable service to be eligible. If you are covered by FERS, only 18 months is required. The eligibility rules for Social Security disability benefits depend on the time you were covered by Social Security before the onset of the disability and your age.

Assuming that your agency approved your use of sick leave and/or annual leave, it wouldn’t adversely affect your length of service. In fact, it would increase your time on the rolls.

According to OPM, “Terminal leave is generally prohibited except with specific authority.” I’m not aware of any authority for the use of terminal leave that would apply in this situation.

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Time with postal service

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Q: Who do I contact to find out how long I worked for the postal service?

A: Since you aren’t currently a federal employee and can’t go to your personnel office and retrieve that information from your Official Personnel Folder (OPF), you’ll have to request that information from the National Personnel Records Center. Here’s their instructions: Federal law [5 USC 552a(b)] requires that all requests for records and information be submitted in writing. Each request must be signed (in cursive) and dated (within the last year). Please identify the documents or information needed and explain the purpose of your request.

Certain basic information needed to locate civilian personnel records, includes: full name used during Federal employment, date of birth, Social Security Number (if applicable), name and location of employing Federal agency, beginning and ending dates of Federal service.

Written requests (signed and dated) may be mailed or faxed to:

National Personnel Records Center, Annex
1411 Boulder Boulevard
Valmeyer, IL 62295
Fax: 618-935-3014

Since you may not know the exact dates of your employment with the Postal Service, you’ll have to do the best you can, for example, by approximating when you worked there, such as “1985 to 1989” or “late 1980s.”

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Supplement eligibility

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Q: My wife just retired with 21 years and five months of government service at age 60. Her first two years and 10 months she was a WG employee at the Navy Exchange. She then became a DOD employee (with no break in service) and was told all of her WG time transferred to the GS position. Her service commencement date has always included her time as a WG employee. OPM has told her she is not eligible for the Social Security supplement because her time as a WG does not count, and she only has 18 years and 7 months under FERS. I think they are wrong because she qualifies for her FERS annuity based on 21 years of service and therefore is eligible for the supplement.  Is she eligible to receive the Social Security supplement?

A: Your wife is entitled to the special retirement supplement, but it would be based solely on the years when she was a FERS employee. Other service, which might be creditable for retirement purposes, cannot be included when determining the amount of the SRS.

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Military service and retirement

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Q: I retired from the Air Force in 1998 then joined the Air Force Reserve in 2002. In 2003, I became an Air Reserve technican. Can I buy my military time back to include in my civil service total time? When I turn 60, I will convert my active-duty retirement to reserve retirement.

A: Yes, you can make a deposit to get credit for your active-duty service. If you do, that time will be added to your actual civilian service and used in the computation of your civilian annuity, but only after you have at least five years of civilian service. However, because you are receiving retired military pay, you would be required to waive that pay before you retire from your civilian employment. Any reserve retired pay to which you are separately entitled would not be affected.

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Buyback refund

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Q: I am getting ready to retire with 42 years of creditable service at age 64. At age 62, I did not have enough quarters to qualify for Social Security benefits other than medical. However, I did pay the military buyback prior to age 62. Since Social Security benefits other than medical will not be paid due to not having sufficient quarters at age 62, is the retiree entitled to a refund of any kind for the money for the military buyback? If so, is it the amount that was paid into the buyback?

A: Just to make sure that we are all on the same page, here are the rules. If an employee retires before age 62 and is eligible for a Social Security benefit at age 62, any years of active-duty service for which a deposit has not been paid will be eliminated and his annuity recomputed downward. If he retires after reaching age 62 and is eligible for a Social Security benefit at that time, the annuity reduction will be made on the day he retires. No refund is payable to anyone who makes a deposit to get credit for his military service and later finds that he needn’t have done so.

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Re-employment question

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Q: I recently retired from the postal service under CSRS. Would it be possible for me to be employed as a rural route carrier?

A: Yes. However, your salary would be offset by the amount of your annuity.

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Which plan am I in?

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Q: I need to know if I am under FERS or CSRS. My service computation date is June 1983. However, I started working in the federal government in 1980 during the summers and the holidays as a college student. Please let me know which retirement plan that I am in.

A: Because you had fewer than five years of creditable service before January 1, 1987, you should be in FERS. While it’s unlikely that your earlier employment during summers and holidays would change that, you’ll need to work with your personnel office to determine the nature of those appointments and their length.

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Part-time work

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Q: I worked part time for the Navy Exchange as a stock clerk from 1969 to 1971 while I was a student in high school. I joined federal service in 1981 where I am still employed under the CSRS system. Does the time I worked for the exchange count toward my federal service time?

A: No.

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Retirement freeze

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Q: I am CSRS Offset, 52 with more than 27 years of service. Because my agency has yet to offer a VERA, I am considering resigning and “freezing” my retirement until age 55. Is this legal, and if so, how would it impact my annuity?

A: While you could “freeze” the amount of your annuity by resigning, you wouldn’t be eligible for a deferred annuity until age 62. At that time, your annuity would be calculated using your years and full months of service and high-3 on the day you left. Any unused sick leave you had when you left would not be included in that computation. Further, if you were enrolled in the Federal Employees Health Benefits Program or Federal Employees’ Group Life Insurance Program, you would not be able to re-enroll in either. Instead, your coverage would be extended for 30 days at no cost to you with the option of converting to private coverage or, in the case of FEHB, continue your plan coverage for up to two years under the Temporary Continuation of Coverage provision, where you would pay the entire premium cost plus 2 percent.

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Effect of new marriage

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Q: I am retired from the postal service and I am under CSRS. My ex-wife receives almost half of my pension due to a court order. If I remarry, I know that I have to report that to OPM so my new wife can be under my survivor annuity. Do I have to let them know right away after I marry, and what is that two-year waiting period that I read about? Also, will money be taken out for both my ex-wife and my new wife? Please advise because I would like for my new wife to be able to collect on my annuity should anything ever happen to me.

A: Rather than attempt to summarize the rules here, which vary according to the nature of the court order, I suggest you go to www.opm.gov/retire/pubs/handbook/C052.pdf and read the sections on Survivor Elections after Retirement, Part 52A5 and 6 (CSRS) or 52B2 (FERS).

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Retirement supplement

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Q: Since I’ve been buying back my 20 years of military service toward a FERS retirement, would I qualify for the MRA (56.5 years old) and would at least 10 years of federal service actually equal 30 years of total service for calculations on the SRS? Or would the system only use the 10 years of federal service and MRA, which according to your column would disqualify me for SRS?

A: Only actual civilian service is used when calculating the special retirement supplement. Therefore, if you retired at your MRA with at least 30 years of service (actual service and service for which you made a deposit), your annuity would be based on your entire service history, but your SRS would be based solely on your 10 years of civilian service.

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CSRS Offset question

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Q: I have eight years prior federal service (1980-1988). Upon resignation, I received a lump-sum payout for my CSRS account.  Subsequently, I worked for 20 years in the private sector until I was laid off in 2009. Reinstatement eligible, I was hired in November as a “Term” employee, classified as “CSRS Offset.”  However, I was informed recently that the classification was incorrect, and is being changed to “FICA with option for FERS.” Is this correct?

A: It sounds like you were hired into what is called a temporary time-limited position. If that’s the case, then you would contribute to Social Security and Medicare, but would not be covered by retirement or life and health insurance benefits, nor would you be able to contribute to the Thrift Savings Plan. However, if you were to be converted to a permanent position down the road, you would be covered by CSRS Offset with the option of electing to transfer to FERS. If you stayed in CSRS Offset, you would get credit for your temporary service and be able to make a deposit to get credit for that time in your annuity computation. However, if you transferred to FERS, you would get no credit for that time. As for your earlier period of CSRS service, if you became a permanent employee, you’d get credit for that time in determining your total years of service. If you redeposited the money that was refunded to you, plus accrued interest, you’d get credit for that time in your annuity computation. If you didn’t, your annuity would be actuarially reduced based on the amount you owed and your age at retirement.

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Early out penalty

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Q: I’m a CSRS employee who is thinking of taking an early out if  offered. My age will be 54 years and 2 months, so I will have a penalty. I was told the penalty goes away once  I reach 55. Is that true?

A: No, it isn’t true. The reduction in your annuity for being under age 55 would be permanent.

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Debt ceiling and pensions

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Q: I am a recent CSRS retiree with more than 42 years of service.  If the debt ceiling is not increased in a timely manner, will that impact my annuity? If so, how would that be recalculated? Will it ever be repaid?

A: The money used to pay your annuity is in the Civil Service Retirement and Disability Fund and would not be affected by a failure to raise the debt ceiling. However, if the ceiling is not raised, the Treasury Department could borrow money from the fund so the government could continue to run. When things settle down, that debt would be repaid.

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Lump-sum calculation

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Q: I am a CSRS dentist with more than 36 years of government service and I am about to retire. I have 80 days (not hours) of annual leave for which I should receive a lump-sum payment upon retirement from my local VA medical center, minus income tax and other deductions. My local payroll office tells me that although they will use my base and market pay to determine my annual salary, that salary will be divided by 364 days (instead of 261 days) to determine my daily and hourly rate. This doesn’t seem correct, as my ability to earn annual leave was reduced four years ago from 30 days per year to 26, and my tour of duty is 261 days per year. What is the correct way for my local payroll office to determine the value of the 80 days of accrued unused annual leave for which I should receive a lump-sum payment?

A: According to OPM, “An agency calculates a lump-sum payment by multiplying the number of hours of accumulated and accrued annual leave by the employee’s applicable hourly rate of pay, plus other types of pay the employee would have received while on annual leave, excluding any allowances that are paid for the sole purpose of retaining a Federal employee in Government service (e.g., retention incentives and physicians comparability allowances).” For a complete run-down on lump-sum leave payments, go to www.opm.gov/oca/leave/html/lumpsum.asp.

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Survivor benefits

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Q: I am 57 with more than 30 years of CSRS service. My husband is 60 and retired from the military in 1997 with 27 years of service. He soon will have 14 years with FERS. We plan on retiring in September. I know I’ll be affected by the “windfall” and “offset” because of Social Security that we’ve both paid, his while in the military and mine prior to my federal service. If my spouse dies before me, will I receive the full military survivor benefit ($500) that he designated from his military retirement or will it be reduced or eliminated as well?

A: There won’t be any reduction in your military survivor benefit.

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Buyback and the reserves

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Q: I’m 39 with 18 years of military service (6 active, 12 reserve). I’ve been working for the government as a GS employee under the FERS plan  for 12 years. I’ve read and heard the benefits associated with buying back my active-duty military time, but I am confused as to whether it will cause me to have to remain in the reserves longer to make up for the active time I’m buying back. My initial plan was to have two retirement checks, one from my federal service and the other from my military service that I would collect at age 60. I’m senior enlisted so staying beyond 20 years to make up that time would not be too difficult and would only add money to my overall retirement. There’s quite a bit of material out there for active military buyback, but nothing related to those who have continued on a reserve status. Can you help shed some light on if my plan to “double dip” is feasible? Also, can you point me in a direction where I can read the government policies on military time buyback?

A: Making a deposit to get credit for your active-duty service won’t reduce the amount of your reserve service. You’ll be able to receive both retirement benefits when you are eligible for them.

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