By Reg Jones
Immediate retirement
October 31st, 2011 | Early retirement
Q: I am 55 and have 28 years of service under FERS. I was involuntarily downgraded in 2002 from a GS-7 position (step 7) to a GS-4 position (step 00) with safe pay, no step increases in the 10 years since this happened, and receiving only half the cost of living. This occurred because of a contracting study which was done and in which my directorate won the study over the bidding contractors followed by a handful of directorate employees choosing who would leave the directorate and be involuntarily placed into whatever was chosen for them. I received no assistance in regaining the grade it took me 17 years to achieve. Are the penalties any different for me if I decide to retire now at 55 or wait until I reach 56 because of these unfortunate circumstances that happened to me?
A: In order to retire on an immediate, unreduced annuity, you’d have to be at least 56 years old and have 30 years of service. The earliest you could retire would be when you reach age 56. However, because you wouldn’t have 30 years of service, you’d be retiring under the MRA+10 provision (minimum retirement age with at least 10, but fewer than 30, years of service).
Offset trigger
October 31st, 2011 | POST-RETIREMENT
Q: I retired from civil service at 55. I have been working in the private sector. I just turned 62 and plan on continuing to work and not collect Social Security benefits until I retire altogether. When can I expect a reduction in my CSRS Offset annuity?
A: Since you have just turned 62, the offset should occur in your next annuity payment. The offset will be made regardless of whether apply for a Social Security benefit and will be equal to the amount of benefit you earned while employed under CSRS Offset.
Tags: CSRS offset, re-employment
Buying back military time
October 31st, 2011 | Veterans' employment benefits
Q: I am thinking about buying back my 20 years of active-duty time to make a deposit. I am a 100-percent combat-disabled vet. I read in the FERS handbook under Creditable Military Service that under certain conditions someone receiving retired military pay may receive that pay and full civilian annuity, but only if a deposit is made to the civilian retirement system for that period of active-duty service. To be eligible, the employee who is receiving retired military pay must have been awarded it (a) on account of service-connected disability incurred in combat with an enemy of the United States or (b) on account of a service-connected disability caused by an instrumentality of war and incurred in the line of duty during a period of war. Does this apply to me?
A: Only your branch of service can confirm that your disability fits the definition you cited. Once you have that proof, take it to your personnel office, which can make it a part of your official personnel record. Then if you decide to make a deposit, you can do that.
Tags: buyback, FERS, military service
Disability benefits
October 31st, 2011 | Disability retirement
Q: I’m a dual-status federal/military technician in the Air National Guard. I have eight years of active duty with the remainder in the ANG for a combined total of just more than 20 years of military service. I’m going before a medical board because of service-connected disabilities (VA rated at 70 percent). Soon after the board, I will be separated from the ANG and retire from my technician position on FERS disability. Assuming my military disability rating will come back at 30 percent or more, will I be eligible for immediate concurrent receipt of all military disability pay, VA disability compensation and FERS disability retirement?
A: I’m only qualified to answer the part that deals with your entitlement to civilian retirement benefits. As a National Guard technician, if you are medically disqualified for military duty, you’d receive FERS disability benefits wihout having to meet the usual disability criteria. You’ll have to check with the VA and your branch of service to learn if you are entitled to any other benefits.
Tags: disability, FERS, military
Re-employment after buyout
October 31st, 2011 | Re-employment
Q: I am 62 and I was a USDA-ARS employee who took a buyout in July and retired. I’m a qualified Wildland Firefighter with a Red Card. If I were to join a crew, paid for by a state entity with pay coming from FEMA, headed to fight fire or work on flooding and hurricane duty for about two weeks, is that against OPM guidelines? I’m finding it hard to get an answer. They are asking for letters explaining payment of work. Hard to explain, since there are no contracts that I know of, only requests for crews who go on an availability list.
A: Here’s what OPM has to say: “An employee who receives a VSIP and later accepts employment for compensation with the Government of the United States within 5 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 reemployment.” As such, it wouldn’t appear that your short-term employment by a state agency would fall into any of those categories, regardless of where the state money came from.
Tags: buyout, OPM, re-employment
How the first COLA in 2 years will be paid
October 31st, 2011 | Uncategorized
For the first time since 2009, many retirees and survivors will receive a cost-of-living adjustment to their annuities beginning in January. For those covered by the Civil Service Retirement System, the COLA will be 3.6 percent; for those covered by the Federal Employees Retirement System, 2.6 percent.
The Office of Personnel Management uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), as published monthly by the Labor Department’s Bureau of Labor Statistics, to determine COLAs.
COLAs for both CSRS and FERS are based on the percentage increase in the CPI-W for the July-September quarter compared with the most recent quarter July-September on which an inflationary increase was based. When there isn’t any increase from the third quarter of one year to the third quarter of the following year, no COLA is payable. That’s what happened for two years running.
When COLAs are paid, CSRS retirees receive them regardless of the age at which they retire. Most FERS retirees only get them when they are age 62. However, there are exceptions. Survivors and disability retirees receive them regardless of their age, as do FERS retirees who were military reserve technicians who lost their military status due to medical reasons and were age 50 with at least 25 years of service, law enforcement officers, firefighters, air traffic controllers , and special CIA employees.
If the CPI-W increases by 3 percent or more in any year, FERS-covered retirees and survivors receive one percentage point less than that amount. If the CPI-W increases by 2 percent to less than 3 percent, CSRS retirees receive the full amount while FERS retirees receive 2 percent. If it increases by less than 2 percent, the adjustment equals the CPI-W for both CSRS and FERS.
Under both CSRS and FERS, when a COLA is payable, it’s applied to annuities that are effective Dec. 1, and the increase shows up in pension payments made on the first business day of January. If you retire any time during the year immediately preceding a COLA, your first COLA will be prorated. Because that has led to a lot of confusion about who is eligible for a COLA and how much it would be, here is the full picture.
If your monthly annuity began in December 2010, you will have been on the annuity rolls for 12 months when the 2012 COLAs take effect. Therefore you will receive the full COLA of 3.6 percent if you retired under CSRS or 2.6 percent if you retired under FERS.
Here is how COLAs are prorated for those who retired later:
• 3.3 percent under CSRS or 2.4 percent under FERS for January retirees.
• 3.0 percent under CSRS or 2.2 percent under FERS for February retirees.
• 2.7 percent under CSRS or 2.0 percent under FERS for March retirees.
• 2.4 percent under CSRS or 1.7 percent under FERS for April retirees.
• 2.1 percent under CSRS or 1.5 percent under FERS for May retirees.
• 1.8 percent under CSRS or 1.3 percent under FERS for June retirees.
• 1.5 percent under CSRS or 1.1 percent under FERS for July retirees.
• 1.2 percent under CSRS or 0.9 percent under FERS for August retirees.
• 0.9 percent under CSRS or 0.7 percent under FERS for September retirees.
• 0.6 percent under CSRS or 0.4 percent under FERS for October retirees.
• 0.3 percent under CSRS or 0.2 percent under FERS for November retirees.
Those who will retire in December are not eligible for COLAs in 2012.
Since the CPI-W is also used by the Social Security Administration to determine the amount of a Social Security cost-of-living adjustment, any of you who are eligible and have applied for a Social Security benefit can expect to receive a COLA pegged to the amount of time you’ve been entitled to that benefit. There’s no difference in the treatment of CSRS and FERS retirees and survivors. Those who have been on the Social Security benefit rolls since December 2010 will get the full 3.6 percent increase in January. Those who have entered the rolls since then will get proportionately less.
Multiple survivor benefits
October 28th, 2011 | Uncategorized
Q. I am a federal retiree, and have recently married a woman whose ex-husband (also a federal retiree) assigned ex-spouse survivor benefits to her. (They divorced while he was stilll employed.) She is older than 55, so the age at remarriage is not an issue. I intend to provide at least some sort of survivor benefit for her, so that she will be able to continue health benefits after my death.
If I die first, will she be able to select her ex-husband’s (higher) survivor annuity upon his death? (I assume she cannot receive both. ) If both her ex and I die, and assuming she selects his survivor annuity, will she be able to continue her participation in the FEHB as a result of the fact that I assigned her an annuity, even if she selects the other one?
I called OPM regarding this and received very conflicting and confusing information.
A: To learn more about multiple annuities, go to www.opm.gov/retire/pubs/handbook/C071.pdf and scroll down to Section 71A2.1-1C, More Than One Survivor Annuity. To be eligible for continuing FEHB coverage, she would have to have been covered as a family member under the self and family option of your plan at the time of your death.
Tags: FEHB, Survivor benefits
Retirement buyback
October 28th, 2011 | Uncategorized
Q. I left the government in 1984 (after eight years of service) and cashed out my retirement. I then came back in 1985, as a term employee with no retirement, until 1989 when I obtained a permanent position. Thinking I would only be with the government several more years I converted from CSRS Offset to FERS for the TSP matching. Ten years later, I made a deposit (based on OPM calculations) to buy into CSRS for the time I was a term employee and have those years count toward my years in service. I was advised at the time, not to redeposit the previous CSRS money plus interest, as the reduction in my CSRS annuity wouldn’t, on a present value basis, offset paying back the principal and interest. My benefits office is calculating my retirement as 12 years CSRS (to 1989) and now 22 years FERS. Does this sound right?
Is there any way to get my FICA back for the four years that I paid into Social Security that I assume are now covered under CSRS after the buyback?
What are your thoughts about a CSRS redeposit versus reduction in annuity for my original eight years (Probably about $11,000 principal and $50,000 interest right now), if I retire at 59?
A. 1. You will get credit for all those CSRS years in determining your eligibility to retire. However, only the years for which you made a deposit will be included when calculating the CSRS component in your annuity. 2) No, you can’t get a refund of your FICA deductions. 3) You’ll have to do the math to find out which makes better sense, a redeposit or the reduction in the CSRS portion of your annuity.
Cashing in annual leave
October 28th, 2011 | Uncategorized
Q. I have an employee who works for me (CSRS) who recently had a preretirement conference with HR. He is a postal worker who is able to carry over 440 hours of earned annual leave from year to year. He plans to retire at the end of this year which ends Dec. 31 or possibly Jan. 2, which would place him in the following leave year. His question is, if he carried over 440 hours of annual leave from 2010 into 2011, and earned another 208 hours of additional annual leave this year, and retired prior to the end of 2011 could he cash in up 648 hours of earned annual leave (assuming he uses no annual leave during this year) since he would not be carrying over any leave into 2012, or is 440 the maximum that he would be able to cash in period? Is this the same for both CSRS and FERS? If he retired on Jan. 1 or later, would he loose the 208 hours from 2011? HR told him he could only cash in 440 hours.
A. His HR was correct. He can only cash out a maximum of 440 hours. Any hours above 440 would be lost.
Tags: annual leave, RETIREMENT, unused sick leave
Early retirement / Social Security
October 28th, 2011 | Uncategorized
Q. I am 50 years old with 25 years of service (FERS). There is talk of an early retirement being offered later this year. If I were to take an early retirement would I receive the Social Security supplement?
A. You wouldn’t be eligible to receive the special retirement supplement until you reach your minimum retirement age. Since you were born between 1953 and 1964, your MRA is 56.