By Reg Jones
Penalties for early retirement
January 31st, 2012 | Creditable service: CSRS Creditable service: FERS CSRS annuity computation Early retirement FERS annuity computation RETIREMENT
Q. I have a question about early outs. I am 53 and have 25 years of Federal Employees Retirement System service. If an offer is made in 2012, will I be penalized for the number of years I am under age 62? Reading the past posts, I am confused. Also, are health benefits based on the non-postal rate for federal employees? Is unused sick leave added to the annuity or years of service in the coming year?
A. Retiring CSRS employees are penalized for being under regular retirement age; retiring FERS employees aren’t. The premium rates for retired Postal Service employees are the same as those for all other employees and retirees. The lower premium rate for Postal Service employees is the result of union contract negotiations, which don’t carry over into retirement. FERS employees retiring before Jan. 1, 2014, will only get half credit for their unused sick leave; after that, they’ll get full credit.
Figuring out primary, secondary coverage
January 31st, 2012 | Coverage after retirement FEHBP and Medicare HEALTH INSURANCE Medicare RETIREMENT
Q. I plan to retire in a few years. I am currently 67 years old, participate in the Federal Employees Health Benefit Plan with Blue Cross Blue Shield and am enrolled in Medicare Part A, which is free and required at 65. I do not wish to participate in Medicare Part B because, from the way I see it, I would be paying for two primary insurers even when I retire. Am I entitled to continue with my FEHB as my primary coverage, and would I be entitled to the same choices as though I were still working for the government? I feel that Blue Cross is the better of the two coverages and Medicare Part B and my portion of my Basic Plan with BCBS is about the same cost to me and Blue Cross is readily accepted by all doctors.
A. Once you retire, Medicare Part A will be primary and your FEHB plan secondary. If you don’t enroll in Medicare Part B, your FEHB plan will be your only coverage, but it won’t pay benefits in the same way it did when you were employed. How that is done is explained on pages 24 and 25 of your 2011 Blue Cross and Blue Shield Service Benefit Plan brochure.
Part B decision depends on costs, benefits
January 31st, 2012 | Coverage after retirement FEHBP and Medicare HEALTH INSURANCE Medicare RETIREMENT
Q. I am 62, and will be retiring from the Postal Service within three months, rather unexpectedly. We will be continuing with my current Blue Cross Blue Shield plan for annuitants. My wife is 65, and declined Medicare Part B since I was still working. Will it be necessary for her to sign up for Part B, or will the continued Federal Employees Health Benefit plan suffice?
A. She doesn’t have to sign up for Medicare Part B. However, before she makes up her mind, the two of you need to weigh the potential costs and benefits of that decision. If you conclude that what is covered by your Blue Cross Blue Shield plan will be sufficient over time, she can decide not to elect Part B. On the other hand, if Part B offers complementary benefits and/or different ones that fill important gaps and reduce your out-of-pocket cost, even when considering the monthly premiums, then she can elect Part B.
Retirement at age 50?
January 31st, 2012 | Early retirement RETIREMENT
Q. I’ve been with the Postal Service for 22 years and am 49 years old. I’ve started a new career. Can I retire next year at age 50? Will I be eligible for any retirement money?
A. No, you cannot retire at age 50. In fact, the earliest you would be able to retire is when you reach your minimum retirement age, which is 56. Even then you would be retiring under the MRA+10 provision (minimum retirement age with at least 10 but fewer than 30 years of service). At retirement, your annuity would be reduced by 5 percent for every year (5/12 percent per month) you were under age 62. The only way to reduce or avoid the reduction would be to retire and postpone the receipt of your annuity until a later date.
How would VERA/VSIP affect retirement pay?
January 31st, 2012 | Creditable service: CSRS Creditable service: FERS CSRS annuity computation Early retirement RETIREMENT Special retirement supplement
Q. I am a Civil Service Retirement System/Federal Employees Retirement System offset employee with 31 years of service, and I have been offered Voluntary Early Retirement Authority and Voluntary Separation Incentive Payments (VERA/VSIP). I would like to know how a VERA/VSIP would affect my retirement. I have been depositing the maximum in my TSP account, and I see that the government is not required to match it. Does government matching or not matching my deposit depend on the agency I work for?
A. To estimate what your annuity would be, use the formulas for each retirement system:
FERS: 0.01 x your three highest consecutive years of average salary (your high-3) x all years and full months of FERS service.
CSRS: 0.015 x your high-3 x 5 years of CSRS service, plus 0.0175 x your high-3 x 5 years of CSRS service, plus
0.02 x your high-3 x all remaining years and full months of CSRS service.
Unused sick leave that doesn’t exceed the amount you had to your credit when you transferred to FERS will be added to your CSRS service. If you retire before 2013, half of any remaining hours will be added to your FERS service. In both cases, hours that don’t add up to a month (approximately 174 hours) will be dropped.
As a FERS employee, if you retire before age 62, you will be entitled to the special retirement supplement, which is approximately the amount of Social Security benefit earned while you were a FERS employee. Here’s the formula: Social Security benefit estimate provided by the Social Security Administration x total years of FERS service rounded up to the next higher year divided by 40.
The basic rules on the amount of a Voluntary Separation Incentive Payment are as follows: An amount equal to the severance pay you would be entitled to, without an adjustment for any previous payments made or an amount determined by the head of your agency, not to exceed $25,000. Only your agency can tell you if you’re eligible for a VSIP and, if so, in what amount.
Creditable academy time
January 30th, 2012 | Uncategorized
Q. My Civilian Personnel Activity Center office is questioning whether my service academy time is creditable toward my service computation date based on the fact that my type of separation (dismissal) and character of service (not applicable). My discharge is not honorable or dishonorable, but I didn’t think it mattered for service academy time because I wasn’t commissioned yet. Any documentation to show my CPAC office would be much appreciated.
A. Section 1115 of the National Defense Authorization Act of 2008 explicitly made academy time creditable for retirement purposes and should be included when setting that service computation date. Although not specifically included in the Act, according to OPM, the fact that academy time is creditable for retirement purposes also makes it creditable for leave accrual purposes.
Tags: creditable service, service academy, service computation date
Recrediting unused leave
January 30th, 2012 | Uncategorized
Q. I retired in 2005. My sick leave was rounded up (or down) and added to my service time. I am now re-employed as a temp. Can the unused portion of hours be recredited to my account?
A. No, it can’t.
Tags: sick leave
Creditable military service and leave accrual
January 30th, 2012 | Uncategorized
Q. I am retired from the Coast Guard with 22 years of service. I now work for the Bureau of Prisons in the Department of Justice as GL09. When hired, human resources told me I would get eight hours of leave per pay period, or 26 days per year. I received my first leave statement and it shows only four hours per pay period. HR said it made a mistake and four is all I can get unless I can show I have the Expeditionary Medal, in which case I may get six hours per pay period. What is the deal, and where can I find the information in writing?
A. The authoritative source of information about creditable military service for leave accumulation purposes is at www.opm.gov/feddata/gppa/gppa06.pdf. Once there, scroll down to section 1-6.
Tags: creditable service, leave accrual
Health insurance
January 30th, 2012 | Uncategorized
Q. My husband and I are both federal employees. He was a postal worker for 13 years and then transferred to a job at Wright-Patterson Air Force Base, Ohio. We are close to retirement, within four or five years. He is on my health care (family plan) and has been for 13 years, which is how long we have been married. Does he have to have his own insurance five years prior to retirement? I have carried a family plan for at least 19 years.
A. An employee only needs to be enrolled in or covered by the Federal Employees Health Benefits program to carry that coverage into retirement.
Tags: family coverage, FEHB, HEALTH INSURANCE, Postal Service, RETIREMENT
Standby Premium and FLSA in high-3?
January 30th, 2012 | Uncategorized
Q. I am a Federal Employees Retirement System non-law enforcement officer (1811) employee who receives Standby Premium and Fair Labor Standards Act pay. I can retire at age 56, when I will have 33 years of service. In calculating my high-3 average, will Standby Premium and/or FLSA pay be included in the average?
A. An employee’s basic pay is used to calculate his high-3. To see what’s included and excluded from basic pay, go to www.opm.gov/retire/pubs/handbook/C030.pdf.