Ask The Experts: Retirement

By Reg Jones

Disability retirement

Bookmark and Share

Q: I am a former CSRS employee who is receiving disability retirement from the government. I just turned 55. Will this change to regular retirement (I had the 30 year requirement). If so, what is the difference?

A: As a disability retiree under CSRS, you will continue to have to provide proof of your disability until age 60. At that point, you will be considered permanently disabled. Your disability annuity won’t be changed to a regular annuity.

Tags: ,

Credit for temporary service

Bookmark and Share

Q: I worked in a federal job as a temporary employee from October 1979 to January 1987. I paid only Social Security since temporary employees were not allowed to participate in CSRS. I was hired as a Career-Conditional FERS employee in June 2010. I am looking to pay a deposit to get credit for my years of temporary service. Can any of that service give me a CSRS annuity component even though I never participated in CSRS?

A: No.

Tags:

Buying back time

Bookmark and Share

Q: I need to know how to buy my military time back, how much it cost and where to send the forms.

A: Go to the Ask the Experts site, click on the heading “Read more” and on the right hand column click on “Creditable service: FERS,” then scroll down to “Counting military service toward retirement,” dated October 25, 2010. If, by chance, you are a CSRS employee rather than CSRS, use a Standard Form 2803 instead of the 3108.

Tags:

Retirement or disability

Bookmark and Share

Q: I work for the DHS/TSA. I am 58 and have worked there for seven years. I fell at work four years ago and have been on workers’compensation since that time. I get cortisone injections but it is becoming more difficult to overcome the pain. I have been working most of the time since then. I am at home now waiting for another injection. Can I retire early and if so, where do I start? Would I ‘retire early’ or apply for disability?

A: Even if your agency was offering an opportunity to its employees to retire early, you don’t have the right combination of age in service to do that. Nor do you meet the age and service requirements for regular retirement. Therefore, your only option is to apply for disability retirement. However, even if your application is approved, you may still want to stay on workers’ compensation because it provides the higher benefit. If OWCP later found that you were recovered and stopped your disability comp payments, you would be able to ask OPM to activate your disability retirement benefit.

Tags:

Special retirement

Bookmark and Share

Q: I served in the Air National Guard full-time WG-12 technician from March 1993 until January 2003 when I was deemed medically ineligible. I performed the same duties when doing military time as I did as a FERS employee but was given an OPM disability retirement because I lost my military status. I learned that there is Special Retirement Supplement to disability payments for law enforcement and military reserve technicians which is intended to bridge the income gap until Social Security eligibility is reached. Should I have been receiving this supplemental pay for the past eight years and would a request for retroactive payment even be considered?

A: No. Disability retirees aren’t eligible to receive the special retirement supplement.

Tags: , ,

Carryover ceiling

Bookmark and Share

Q: After working 26 years for the U.S. Postal Service, I transferred to the Defense Department. Postal service employees have a higher annual leave carryover limit than other federal sectors. I have 466 hours of annual leave and the max carry-over for DoD is 240. Will I lose all annual leave hours in excess of 240 if not used by December 31st?

A: According to OPM, “The Postal Service Reorganization Act provides that an employee transferring between the USPS and other agencies may not lose benefits if the employee transfers without a break in service. The employee is entitled to carry over the higher leave ceiling that he or she had at the USPS. All 466 hours of annual leave will transfer to DoD and only the hours in excess of his or her USPS ceiling will be subject to use or lose.
“An employee transferring from USPS is entitled to the maximum carryover ceiling (personal leave ceiling) provided by USPS upon transfer to another agency. The employee is entitled to the higher carryover ceiling unless the employee’s annual leave balance is reduced at the end of the leave year. Any reduction in the annual leave balance at the end of the leave year will result in a lower personal leave ceiling, and the employee’s personal leave ceiling will be subject to change until it is reduced to the 240-hour ceiling provided in title 5 of the United States Code.”
In your example, the employee’s USPS leave ceiling will serve as the employee’s personal leave ceiling. So if the 466 hours of annual leave is within the employee’s USPS leave ceiling, that will be the employee’s personal leave ceiling as an employee of DoD. The employee’s personal leave ceiling will continue to reduce anytime the employee’s annual leave account has less than that amount at the end of the leave year. As long as the employee’s annual leave balance is under his USPS ceiling at the end of this leave year (Dec. 31 for this leave year), that will be his or her new personal leave ceiling.

Tags: ,

Injury and buying back military time

Bookmark and Share

Q: I was an Air Force reservist on orders for six months back in October 2006. I injured myself while on active duty and the six-month orders turned into two years. I was put on the “Permanent Disability Retired List with a 30 percent disability (noncombat related). I served 29 years in the Air Force Reserve with a total of four years and eight months of active duty. I was hired in October 2008 as a federal employee. I am in the process of buying back/military deposit those four years and eight months. I attended a FERS retirement seminar recently and on one of the slides it said the government would  allow a waiver of “military retirement pay” for those with a “combat-related injury.” Will I be able to continue to buy back my military time with a disability retirement check for a noncombat-related injury? Is this counted as “military retirement?” Can I add my military time to my civilian seniority?  Do I need to cancel my payment for military deposit?

A: What you heard was that if an employee was awarded military retired pay on account of a service-connected disability either incurred in combat with an enemy of the U.S. or caused by an instrumentality of war and incurred in the line of duty, he wouldn’t have to waive his military retired pay if he wanted to combine it with his civilian service. If he did, he’d still have to make a deposit to the civilian retirement system for any period(s) of active-duty service. That special provision in the law doesn’t apply in your case. For you to get any credit for your active-duty service, you’ll have to complete your deposit. Doing so will have no affect on any reserve retired pay to which you are entitled.

Tags: ,

Buying back military time

Bookmark and Share

Q: If I pay about $4,000 I will have my 12 years of military service counted. I got hurt at my federal job, and I am thinking about asking for FERS disability. The problem is, I am a month shy of the 18 months required. Can I only pay a portion of the $4,000 (to have the month required), or do I have to pay the whole amount? Are we allowed to just pay part of the buyback money?

A: First, you have to have 18 months of creditable civilian service under FERS to be eligible to apply for disability retirement. Active-duty service for which a deposit has been made doesn’t count toward meeting that requirement. Second, you can’t make a deposit that covers only a portion of a period of active-duty service. It’s all or nothing.

Tags: ,

COLA eligibility

Bookmark and Share

Q: I will be 75 Oct. 28. I am in CSRS and have been working at the Nuclear Regulatory Commission for 39 years. I plan to retire on Oct. 30. Will I be eligible for the COLA (if there is any) in January of next year? Also, on which day, Sept. 30 or Oct. 30, would it be better for me to retire?

A: If there is a cost-of-living adjustment and you retire at the end of September, you’ll be on the annuity roll in October and receive 1/6th of that COLA. If you retire at the end of September, you’ll be on the annuity roll in October and receive 1/12th of that COLA. As for which is the better month for you retire, that’s a judgment you’ll have to make.

Tags: ,

Affected by WEP?

Bookmark and Share

Q: Does the Windfall Elimination Provision apply to anyone in CSRS Offset who is 55 or older and has 30-plus years of service upon retirement?

A: The windfall elimination provision applies to anyone who is receiving an annuity – in whole or part – from a retirement system where he didn’t pay Social Security taxes and has fewer tha 30 years of substantial earnings under Social Security.

Tags: ,

Retirement fund deposit

Bookmark and Share

Q: Can I get FERS retirement credit (without buy-in) for my 20 years of military service? I was awarded 100 percent Veterans Affairs service-connected disability five years after my military retirement. I have 12 years of FERS time and 10 percent of my VA disability is combat-related.

A: No, you’d have to make a deposit to the civilian retirement fund to get credit for that time.

Tags: , ,

Future annuity

Bookmark and Share

Q: I am FERS employee. I’m planning on leaving government service early next year having completed a total 10 years federal service (which includes military time – buyback paid in full) and five years pure civilian federal service. I understand I would be entitled to deferred annuity down the road. I want to make sure that all necessary documents are complete. What do I need to do to and what forms do I need to fill out to ensure that my application for deferred annuity will be approved 20-plus years from now?

A: As long as you leave your contributions and deposit in the retirement fund, all you need to do is apply for a deferred annuity several months before your 62nd birthday. You can find the answers to your questions if you go to www.opm.gov/retire/pubs/handbook/C045.pdf and scroll down to Part 45B.

Tags: ,

Civil service disability

Bookmark and Share

Q: I’ve been on civil service disability retirement (OPM) since December 2004. Must I continue going in once a year to the doctor for a new ca-17? I’m never going to get better physically to where I can go back to work. I’ll be 61 this August 26. Will I lose my disability monthly income if I don’t get the ca-17 anymore? I did read where OPM doesn’t require you to schedule a medical evaluation after age 60, so would that also mean that unless your physically healthy enough to go back to work you would still receive your disability checks and not have to see the doctor unless you had a problem?

A: Periodic medical exams are only required until age 60. If you are a CSRS retiree who is still disabled at that time, your disability annuity will continue. if you are a FERS retiree, at age 62, when you become eligible for a Social Security benefit, your disability annuity will be recomputed as if you’d been working until age 62 and converted into a regular annuity.

Tags: ,

Paying back

Bookmark and Share

Q: I am a formal Federal employee and was under the CSRS program, I had 27 years service and cashed out my funds in my CSRS account and I did not retire. I was a re-instatement status. I am now re-employed with the federal government again under the CSRS offset plan. Can I pay back the funds I cashed out?

A: Assuming that you took a refund of your retirement contributions after February 28, 1991, you can redeposit that amount plus accrued interest and get full credit for that time in you annuity computation. Even if you didn’t you’d still get credit for that time in determining your total years of creditable service. If the refund occurred before that date and you didn’t make a redeposit,  your annuity would be actuarially reduced based on the amount you owe and your age at retirement.

Tags:

Exceeding the limit

Bookmark and Share

Q: What happens to my civil service retirement benefits if I exceed the cumulative five-year LWOP-US limit set by USERRA?

A: Assuming that you had at least five years of creditable civilian service and left your retirement contributions in the fund, you would be eligible for a deferred annuity at age 62. If you had as many as 20, you’d be eligible at age 60.

Tags:

Not in offset

Bookmark and Share

Q: From 1983-98 I worked full time for government – CSRS retirement (15 years). From 1998-2000 I worked part time for government – FICA
2000 – went to work full time again for governement, was placed in FERS automatically. A few months later I was told I should have been CSRS offset and sent a letter that allowed me to opt into FERS, the letter scared me, saying that there could be substantial amounts reduced from my pay. I was never counseled on the best retirement plan in my case. At that time, I was going through a divorce (NOVember 2000) and was on anti-depressants and really was not able to make such a big decision on my own and the postmaster told me to sign the form for FERS, so I signed for FERS. For the last 10 years, by retirement showed as FERS only. Then I received a letter stating I was FERS with frozen CSRS and that I fall under FERRCA as I was erroneously placed in FERS instead of the appropriate retirement plan. I have researched a lot now and feel that I should have been in CSRS Offset all along and if appropriately advised would have been there. Is there anything I can do?

A: Your agency is responsible for processing any cases identified as being affected under FERCCA after Aug. 1, 2004. To see how the process operates, go to www.opm/retire/pre/fercca/index.asp.

Tags: ,

Health insurance

Bookmark and Share

Q: I am on disability retirement through the postal service. I am 48 years old and am FERS.  I have been retired since 2009. I am also receiving Social Security Disability.  I just received information from Social Security stating I am required to receive Medicare B.  It says I may opt out, but if I decide to join later, I may end up paying penalties.  My question is can I keep my health insurance through FEHBP? I have Blue Cross Blue Shield. If I do keep it, and decide to keep Medicare B, is Medicare B the supplementary insurance or the primary?  If I decide I do not want Medicare B, will I be penalized when I do want to have it?  What if I don’t want Medicare B until I reach the legal age? Will I still need to pay back penalties?

A: Enrolling in Medicare Part B is voluntary; however, as you were told, if you later elect to enroll in Part B, you will have to pay the penalty for late enrollment. That penalty is 10 percent for each 12-month period you could have been enrolled but weren’t. Because you aren’t employed, Medicare is your primary payer and FEHB plan your secondary payer.

Tags: ,

Paid annual leave

Bookmark and Share

Q: I have a question on paid annual leave upon retirement. I will be 59 years and 8 months old and has 37 years seven months on the target retirement date of Dec. 31. I only earned 33 quarters and to earn more credit on Social Security, can paid annual leave be considered as Social Security income for the year 2012, since the paid annual leave is not included as CSRS income for the year 2011? If so, what is the procedure to report it as Social Security income? And will this only be applied at the end of the year of retirement or it can be considered in any month of the year?

A: No, your paid annual leave cannot be used to get Social Security credits. Only earnings from wages or self employment that are subject to Social Security taxes can secure those credits.

Tags: ,

Military credit

Bookmark and Share

Q: I have three periods of military service for which I am required to pay a deposit under “Catch 62.” The first period, 1969 to 1972, I paid for when it came due in 1986. This bought me a period of about 2.6 years. Later I was mobilized for operations Desert Shield/Desert Storm in 1990 to 1991; and Bosnia in 1997; for an additional eight and seven months each. I plan to work off the additional time by delaying my retirement for 15 months or more. When I discussed this plan with our HR office (SSA HQ) I was told that I may not be able to keep the original 2.6 years I’ve already redeemed if I do not completely pay off all three periods of active duty. Is this true? I’m not too disturbed by this, since if I work the extra 15 months anyway they will all be after my 42nd anniversary with the federal government. The excess CSRS deposits I make during that time will more than cover the entire amount I expect to owe. When the time comes to crunch the numbers, that option may even be more cost effective.

A: No, it isn’t true. When you have more that one period of active duty service, you can select which one or ones for which you want to make a deposit. The time for which you already made a deposit is “in the bank” and can’t be affected by what you do about the other two periods of active-duty service.

Tags: ,

By the calendar, 2011 marks a good year to retire

Bookmark and Share

Panicky employees are asking me if they should retire rather than face two proposals that have been made in deficit reduction and debt ceiling talks: a 5 percent increase in Federal Employees Retirement System employees’ payroll deductions for their defined-benefit pension plans; and a new calculation of pensions based on employees’ five highest annual salaries, instead of the current high-three.

We’ll have to wait until the deficit reduction and debt ceiling negotiations are completed to learn whether federal retirement benefits will be affected and, if so, how.

However, in the midst of uncertainty, what remains constant is the calendar. And, based on that, this is a good year to retire if you have the age and service to do so.

That’s because the 2011 leave year ends on Saturday, Dec. 31. In comparison, the 2012 leave year will end Jan. 12, 2013.

If you are a FERS employee, that Dec. 31 date is good news because you have to retire no later than the end of a month to be on the annuity roll in the following month. Step over the line by one day and you won’t be on the annuity roll until the following month. Retire by Dec. 31, 2011, and you’ll be on the annuity roll in January 2012. Retire at the end of the leave year in 2012, and you won’t be on the annuity roll until February 2013.

The 2011 calendar also is good news if you are a Civil Service Retirement System employee. Although you can retire up to the third day of a month and be on the annuity roll in that month, by retiring Dec. 31, you won’t lose 1/30th of that first month’s annuity payment for every day you are still on the payroll.

Any of you with work schedules that have you completing your tour of duty Friday, Dec. 30, or even earlier in the pay period if you have a flexible work schedule, can relax.

The Office of Personnel Management says that when you’ve completed your tour of duty, you are free to retire, no matter what day in the pay period your last day falls on. You’ll also get |credit for any annual and sick leave you earned during that pay period.

Moreover, by retiring at the end of a pay period, most of you will get paid for all your unused annual leave, including the so-called use-or-lose leave that |you would have forfeited if |you retired after the new leave year begins.

Note that I said most of you. That’s because there are limits on how much annual leave a U.S. Postal Service employee can cash in.

Unfortunately, the cash value of that annual leave won’t be maximized the way it has been in the past. Before the pay-scale freeze, your lump-sum payment would have been increased by the new, higher hourly rate |that would have gone into effect on the first pay period on or |after Jan. 1.

Of course, if you received a step increase before you retired, you will get credit for that in your lump-sum calculation.

Finally, there’s a tax benefit if your income in the year after you retire, including any lump-sum annual leave payment or buyout, is lower than it was while you were working. Not only is there a good chance that your tax bracket will be lower, but a portion of your annuity won’t be taxable.

You can find out how much of it will be nontaxable in Internal Revenue Service Publication 721, Tax Guide to U.S. Civil Service Retirement Benefits, available at the IRS’s website.

So, if you decide to retire, what can you do to assure that your retirement application will be processed smoothly and quickly? Make sure your application is complete and accurate.