Ask The Experts: Retirement

By Reg Jones

Penalties for early retirement

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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

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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

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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?

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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?

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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

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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.

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Recrediting unused leave

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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.


Creditable military service and leave accrual

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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 Once there, scroll down to section 1-6.

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Health insurance

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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.

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Standby Premium and FLSA in high-3?

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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

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LWOP and retirement

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Q. Does my retirement date get postponed if I use leave without pay?

A. Only if you exceed six months of LWOP in a calendar year.

Not exempt from CSRS reduction

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Q. Does the reduced annuity under age 55 apply to Civil Service Retirement System law enforcement officers who opt to take the Voluntary Early Retirement Authority and Voluntary Separation Incentive Payments (VERA/VISP)? Or is the CSRS law enforcement category exempt from this reduction?

A. Assuming that you aren’t talking about retiring as a CSRS law enforcement officer, the law enforcement category isn’t exempt. The 2 percent reduction for being under age 55 would apply. On the other hand, if you are talking about a CSRS law enforcement officer who retires under the special age and service criteria – age 50 with 20 years of service - then he wouldn’t be retiring early and the reduction for being under age 55 wouldn’t apply. Accepting a VSIP wouldn’t change the picture in either case.

Provision stops wife from receiving husband’s Social Security benefits

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Q. I am 57 and a retired federal worker. I retired under the Civil Service Retirement System at the GS-13 level. I only worked a total of about three months before my federal service paying into Social Security, so I am not eligible for any Social Security benefits for myself. However, my husband, who is 60, has worked since he was 19, and has been paying into the Social Security system since then. My understanding is that I am not eligible to receive any of his Social Security benefits because my civil service pension is too high. My question: Is this still true if he dies before me and I become a widow? Will I then be able to receive some of his Social Security benefits?

A. No. The government pension offset provision of law would reduce either benefit by $2 for every $3 you receive in your CSRS annuity.

Two retirements

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Q. I’m interested in getting this answer before I sign any reserve papers. I served in the Navy for 9 1/2 years. I now work for Homeland Security and want to buy back my time served; I’m also interested in finishing my Navy time as a reservist. Can I buy back my active-duty time, put it toward my federal job, and finish my 11 years as a Navy reservist — ending up with two retirements?

A. Yes.

Leave cash-in value depends on personal decision

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Q. I will be retiring this year (2012), with 30.3 years as a Civil Service Retirement System employee. The leave year ends on Jan. 12, 2013. If I waited until then to retire to maximize my leave cash-in value, my annuity wouldn’t start until February 2013, but if I retired on Dec. 31, 2012, my annuity would start in January 2013. However, I would not maximize my leave cash-in value. Is this correct?

A. If you retired on Dec. 31, you would receive a lump-sum leave payment for all the annual leave you had accumulated up to that point. If you are a non-Postal Service employee who retired at the end of the following pay period, you would only receive a lump-sum payment for the maximum hours that could be carried over into the next leave year, which for most employees is 240 hours. However, if you are a Postal Service employee, your leave year doesn’t end until two weeks after that, not on January 12, which is a Thursday. Therefore, you would have a trade-off to consider: Receive a lump-sum payment that includes one more pay period’s worth of annual leave and lose one month’s annuity, or lose one pay period’s worth of annual leave and be on the annuity roll in January. It’s up to you.

Benefits, CSRS Offset and WEP

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Q. I’m a Civil Service Retirement System Offset employee with 18 years, 6½ months, under straight CSRS; 12 years, 7 months, at retirement (April 30, 2012); and with at least 40 quarters earned under Social Security before federal service. I had an appointment the other day at the Social Security Administration to see what my benefits, offset amount and windfall amounts would be. The person who I talked to had no idea about the CSRS Offset and kept calling the windfall elimination provision (WEP) an offset. She insisted she never had to consider/calculate the offset amount for the Office of Personnel Management, and that OPM would do the calculations and she just had to do the WEP calculations.

My first question: At the time of retirement, does OPM notify a Social Security office where there are people who have dealt with CSRS Offset and WEP and will calculate my benefits properly and correctly?

My second question: What figures and formula do I use to figure out my benefit amount at 64, my offset amount and the WEP amount?

My third question: My full retirement age is 66; retiring at 64 will reduce my full retirement benefit. The offset amount is calculated against the total amount I’m due at 64; that amount reduces the CSRS annuity, not the Social Security amount, and the combination of the two amounts will total the same as the original CSRS benefit. Is the WEP also calculated against the amount I’m due at 64?

A. For a primer on CSRS Offset and how and why your annuity would be offset, read OPM’s Retirement Fact 13 at http://www.opm/forms/pdfimage/RI83-19.pdf. For the full story on how the offset will be calculated, go to and scroll down to Section 50A3.1.1-4.

For a primer on the WEP and how and why your annuity might be affected, read the Social Security Administration’s WEP Fact Sheet at Then use the calculator at to determine what effect the WEP would have on your Social Security benefit.

Converting disability retirement to regular retirement

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Q. I have completed 20 years of firefighter service covered by the Federal Employees Retirement System. I recently was medically disqualified for service due to a permanent medical condition. I am 48 years old — not old enough for voluntary retirement. I have applied for disability retirement. Can I change my disability retirement to a regular firefighter retirement once I reach 50? If not, when I turn 62 and my retirement is recalculated, will I get the 1.7 multiplier for the 20 years of fire service?

A. No, you can’t convert from disability retirement to regular retirement at age 50. And no, the enhanced multiplier won’t be used when your annuity is recalculated at age 62.

Primary insurance depends on employment status

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Q. I have been receiving workers’ comp benefits since 1981. I have no Civil Service Retirement System benefits available, as I withdrew my contributions when I was separated from service. I am now 65 years old and have applied for Medicare. I have maintained my Blue Cross/Blue Shield insurance through the Office of Workers’ Compensation Programs. There is now a dispute as to whether that insurance is primary or Medicare is primary. The question seems to revolve around the following question: Am I “retired” or am I still employed? Do you know the answer?

A: Workers’ compensation is an income replacement program that is designed to continue until an injured employee recovers or dies, whichever comes first. If someone on workers’ comp recovers, he goes back on the agency rolls or, if he is eligible and wants to do so, retires. This tells me that you aren’t retired, a conclusion that is bolstered by the fact that you are not on OPM’s annuity roll and, therefore, not receiving an annuity. If I am right, then your Federal Employees Health Benefit plan carrier would continue to be the primary payer and Medicare secondary.

Buyout or disability retirement?

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Q. I am a federal worker who has multiple sclerosis. I would be eligible for disability retirement, but my boss just informed me that I am eligible for a buyout from our agency, the Administrative Office of U.S. Courts. I’ve worked there for about 17 years. I am only 45 years old and am confused as to which is the most advantageous option.

A. Because you have a disability that would make you eligible for disability retirement, you aren’t eligible for a buyout. Your only option is to apply for disability retirement.

Paying for survivor annuity

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Q. I am not married, and will retire under the Federal Employees Retirement System. After I retire, if I then get married, can I then elect survivor annuity? If so, what is required to make the election?

A. Yes, you can, as long as you do that within two years after the date of your marriage. To pay for the survivor annuity, there will be two reductions in your annuity. The first will be the standard reduction to provide for the survivor benefit. The second will be an actuarial reduction to pay the survivor benefit deposit. That deposit equals the difference between the new annuity rate and the annuity paid to you for each month since you retired, plus 6 percent interest. The first reduction will be eliminated if the marriage ends in the death of your spouse or divorce; the second reduction is permanent.