Ask The Experts: Retirement

By Reg Jones

Retirement application

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Q. In your July 25 column in Federal Times,“By the calendar, 2011 makes a good year to retire,” I don’t understand the very last paragraph, which says: “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.” My application? I have to fill out a retirement application? I never heard of that. I thought my Human Resources people had all that info and they have done my calculations even though I cannot retire yet. Please explain what is meant by making sure my application is correct.

A. Of course you have to fill out an application to retire. If you are a CSRS employee, its Standard Form 2801; if FERS, it’s SF 3107. Once you’ve filled out your portion, your agency personnel office will review it for completeness and accuracy, and finish its portion. Just remember that your agency can only review what you’d submitted. It can’t fill in blanks if, for example, you had periods of service that weren’t filed in your OPF.

Medicare Part B

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Q. I have searched the Internet extensively and cannot find any statistics on what percentage of federal employees/retirees actually sign up for Medicare Part B coverage. Can you shed any light on this for me?

A. No, I can’t. If any of you who read this have that information, let me know and I’ll share it.

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FERS disability retirement

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Q. Do I count my FERS disability annuity as part of my 80 percent earnings or is it supplemental to the 80 percent I am allowed to earn prior to my retirement?

A. You are limited to earnings from wages or self employment that don’t exceed 80 percent of the pay for your grade and step on the day you went on disability retirement. Other sources of income, such as your disability annuity, aren’t counted.

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National Guard

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Q. I am about to retire from federal service. From 1969 to 1976, I served in the Air National Guard and the Coast Guard Reserve. When I joined the guard, I spent six months in training. Does that time count toward my federal service time?

A. It does count if you were called to active duty. If it is creditable, it should be reflected in your service computation date. If it isn’t, you’ll need to check with your personnel office, which can get in touch with the Air National Guard to determine if the time is creditable.

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Deferred retirement

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Q. If I have 20 years of federal service but choose to leave at age 48  to work in the private sector, will I be eligible to receive my retirement at age 50 or will it be deferred until my minimum retirement age?

A. You won’t be eligible for a deferred retirement until you reach your minimum retirement age. FYI: Deferred retirees aren’t eligible for the special retirement supplement nor are they able to re-enroll in the Federal Employees Health Benefits or Federal Employees’ Group Life Insurance programs.

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Medicare and FEHB

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Q. I am a federal retiree who begins Medicare Part A coverage on Aug. 1. I am not taking Part B coverage, but I will be maintaining my FEHB health plan as a supplement. My question concerns coverage. Does having Medicare as my primary insurance result in my FEHB benefits for in-network providers being reduced? Specifically, if I paid a $20 co-pay in July for an in-network FEHB provider, will I now being paying more out-of-pocket in August for that same provider if Medicare, which does not have a network, is the primary and FEHB is the supplement?

A. Check your plan’s benefits brochure to see how the plan handles it. If you don’t find a clear answer there, call the plan on its toll-free number.

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Postal retirement

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Q. I have been reading a great deal about how federal employees benefits and retirements will probably change through legislation to cut spending. Such changes may include changes to COLA calculations, averaging the high-5 and not the high-3, etc. Since the Postal Service is paid for through postal products, not tax dollars, will it be affected differently than the rest of the government?

A. Only time and future legislation will give us an answer to that question. However, you need to remember that no matter where your funding comes from, most of your benefits are the ones found in Title 5 U.S.Code, which, with rare exception, applies to all employees of the federal government.

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Social Security under CSRS Offset

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Q. I have about 15 years under CSRS Offset and I am 55 years old. Since part of my annuity is funded through Social Security contributions, what happens to my annuity (besides a reduction in my total time in service) if I retire at say 60 or 62 before I reach full Social Security retirement age (66 and four months)? Do I receive the full CSRS calculated annuity or is it reduced by some fraction to adjust for the Social Security portion? If so, how is that calculated?

A. If you are already retired, at age 62 your CSRS annuity will be reduced by the amount of Social Security benefit you earned while a CSRS Offset employee. If you retire on or after reaching age 62, the reduction will occur on the day you retire. You’ll still get the same amount of money, it will just come from two different places. However, if you have fewer than 30 years of substantial earnings under Social Security, you will be subject to the windfall elimination provision. Although it’s unlikely to affect the portion you earned while covered by CSRS Offset, it could reduce any additional Social Security benefit to which you may be entitled based on nonfederal work. Note:  Just because your CSRS annuity will be offset doesn’t mean that you have to apply for a Social Security benefit at that time. You can, if you prefer, defer applying for that benefit to a later date to lessen or eliminate the reduction that automatically occurs when you begin receiving a Social Security benefit before reaching your full retirement age.

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Annual leave buyback

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Q. Is there a cap on the amount of annual leave that can be bought back by the government at retirement?

A. To the best of my knowledge, only the U.S. Postal Service has a limit on the number of hours of unused annual leave for which it will make a lump-sum payment.

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CSRS Offset and Social Security

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Q. I retired under CSRS Offset in January. I am obliged to begin receiving Social Security at age 62 even though I would not normally request Social Security until I reached full retirement age (in my case at 66 and seven months). What effect will disbursement of Social Security beginning at age 62 have on the amount of Social Security that I will receive if I do not retire until I reach full retirement age? I know that I am subject to the earnings test for whatever income I receive between age 62 and when I formally retire. I am, as well, going to be subject to the windfall elimination provision since I will not have 30 years of creditable Social Security service.

A. The offset applies at age 62 only if you are retired or when you retire if it’s after you reach age 62. Even it you retired and the offset was applied to your CSRS annuity, you aren’t required to apply for a Social Security benefit until you want to. If you didn’t apply for it until you reached full retirement age, there wouldn’t be any reduction in your Social Security benefit.

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Law enforcement retirement

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Q. I started my federal government career in September 1986 in a non-law enforcement position.  In November 1989, I became an 1811 and have remained in the job series to the present.  In September, I will have 25 years of federal service (three non law enforcement and 22 law enforcement). I will be 48 in October.

Am I eligible to retire this year with 25 years of government service, or do I have to wait until 2013 when I am 50?  I am getting conflicting information from my agency and  OPM, and then from retirement planning instructors working for the USDA Graduate School.

A: You will have to wait until you are age 50. Law enforcement officers can retire at age 50 with 20 years of LEO-covered service or at any age with 25 years of LEO-covered service. Non-LEO service doesn’t count when determining that retirement eligibility.

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Retirement date

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Q. You mentioned Dec 31 as a good retirement date. On the CSRS retirement application, Section B, Block 2, the date of final separation is Friday, Dec 30, 2011.  Some people confuse separation date and retirement date when they fill out the application. That could cause them to lose all their excess leave if they put Dec 31, 2011, in the final separation date. Right?

A: You are making hard work out of a simple matter. You separate at the end of the workday on which you elect to retire. For most employees, this year their pay period will end at close of business on Friday. Dec. 30, 2011. They can elect to separate on either Dec. 30 or Dec. 31. In either case, they would be on the annuity roll on Jan. 1, 2012.

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Buyouts

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Q. I am a FERS employee with 25 years of service. I am 47 years old. I will have 25 years in law enforcement in January. Will I be eligible for the buyouts if they are offered? I am told they will want buyouts off the books by November.

A. The fact that you would be eligible to retire doesn’t affect your ability to accept a buyout if one is offered to you.

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Veterans preference

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Q. I was medically retired from the National Guard with 20 years of service. I was a federal technician in a dual-status position at the time and am currently receiving an annuity. I am considering applying for a position in the U.S. Citizens and Immigration Services and I was asked me if I wanted the veterans preference. Do I qualify for that and if so, for how many points? Also, are there any other issues I should be aware of?

A. To find out if you are eligible for veterans preference and, if so,  how much,  go to www.fedshirevets.gov/job/vetpref/index.aspx

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Retirement back pay owed

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Q. I retired on Jan 1 and have been living on approximately half pay since then. I was advised about two weeks ago that the Office of Personnel Management had the file as of June and were completing the file and could expect my back pay owed before September.

Also, does the possibility of the “high 5″ as opposed to the “high 3″ affect my pay status, since the effective date of my retirement was January 2011? Would this decision be retroactive?

A. When your retirement is finalized, you’ll receive any underpayments you are entitled to while you were on interim pay. If you were in interim pay for three months, you’d get three months back pay, six months, six months, etc.

While no one knows how the high-3/high-5 debate will end up, it’s unlikely that any change would be made retroactively.

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Is lump sum worth it?

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Q. My husband worked for the Department of Veterans Affairs for 12 years and went out on disability retirement at age 55. He recently passed away at age 60. As he did not reach the age of 62, he was never converted to a regular Federal Employees Retirement System retirement. I am told I may be eligible for a lump-sum benefit/refund of any monies paid into FERS. Is this worth applying for, or were his FERS contributions used to pay his disability retirement for the past five years?

A. Assuming that you were married to him for at least 18 months before he died, you’d be entitled to a lump-sum payment. If you were married to him for at least 10 years, you’d also be entitled to a survivor annuity. If you have not already done so, you need to contact the Office of Personnel Management at 888-767-6738 and report his death. They’ll help you make sure you receive any survivor benefits to which you are entitled.

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Self to family coverage

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Q. The Office of Personnel Management website is unclear to a couple of us potential Civil Service Retirement System retirees as to whether a nonfederal spouse, not covered by a Federal Employees Health Benefits policy, can receive coverage by the federal annuitant changing from single coverage to a family plan during an open season after the federal spouse retires.

For example, assume a federal employee currently covered by an FEHB Kaiser Permanente plan has a nonfederally employed wife (currently covered by a Kaiser Permanente single-only health plan though her employer). The federal employee retires Sept. 3, 2011. After he retires, can he convert from a single health policy to an FEHB family plan to add coverage for his spouse (who would then drop her separate, single coverage) during the November 2011 open season or during the November 2012 open season?

A. Yes, a retiree can move from self-only coverage to self and family during any open season. See Code 2A in OPM’s Table of Permissible Changes in FEHB Enrollment for Annuitants and Compensationers.

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Switching to FEHB

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Q. I am a 59-year-old with 26 years with the federal government. I am a 20/20/20 former spouse also (not remarried). I have not been enrolled in a Federal Employees Health Benefits plan because I am covered under Tricare. I planning on retiring in December 2012 at age 61, with 27 years in federal service. I would like to enroll in an FEHB plan this year during open season. I would like to have the option to use Tricare until I am 65 and then be able to use my FEHB plan rather than use Tricare for Life.

When I renew my military spouse ID card, I have to sign a statement that I am not enrolled in an employee-sponsored heath care plan. Can I enroll in the FEHB plan and choose not to use it until a later date?

I also understand that if you have Tricare, you don’t have to have the FEHB plan for five years before you retire and only need to have it for one year.

Please help me find the answers or direct me to the right people. I have talked to Tricare and the Defense Enrollment Eligibility Reporting System, and they don’t seem to have the answer.

A. Coverage under Tricare will count as meeting the five-year requirement to carry FEHB coverage into retirement as long as you are enrolled in an FEHB plan when you retire. You could do that during the next open season. While I’m not aware that your enrollment in the FEHB would alter your entitlement to coverage under Tricare, Tricare is a military program that falls outside the borders of this forum.

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Jump ship before retirement changes?

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Q. I plan on retiring in January 2012. If the proposal passes to make a five-year average to create my monthly retirement funds, what date would I have to retire to keep the three-year average? Sept. 30, 2011? Dec. 31, 2011?

A. You are asking for a prediction, which, the way things stand, would be no better than guess work. You’ll just have to hang on until the legislative picture becomes clearer.

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Retire with 30 years in?

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Q. I will have 30 years of service under the Federal Employees Retirement System in three years and am 46 old. If I were to retire at that time, would I have to take a penalty for not having the MRA+10?

A. You wouldn’t be eligible to retire. Even though you have 30 years of service, you’d still have to have reached your minimum retirement age to do that. The only exception would be if your agency was granted authority to offer early retirements and your position was one that was included. Then you could retire without an age penalty.

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