Ask The Experts: Retirement

By Reg Jones

Disability retirement

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Q. I was approved for disability retirement through FERS and was a part-time flexible carrier. Before I was separated, I was converted to full time in May. In July, my disability annuity was approved by OPM. My annuity payment was reduced as a part time. Does being a part-time employee but doing 40 hours a week throughout my employment and converting to full time before OPM’s approval entitle me to get benefits as a full-time employee? Can they do this knowing I worked full-time hours all the time? Also what about hours paid from Office of Workers’ Compensation Program (OWCP) leave of absence due to a illness. Shouldn’t those hours be calculated in my annuity as worked?

A. A disability annuity is based on simple formulas that don’t depend on whether you are full time or part time or on any OWCP benefits you received. Here are the formulas. For the first 12 months, you’d receive 60 percent of your high-3, minus 100 percent of any Social Security disability benefit to which you are entitled. After the first 12 months, you’d receive 40 percent of your high-3. minus 60 percent of any Social Security disability benefit.

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LWOP and FERS contribution

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Q. Several years ago, I was granted 16 months of leave without pay for a medical condition. While I was on LWOP, I made no contributions to FERS so I assume I should notify my Human Resources Office to buy back this time. Is this correct? If so, is there a specific form to complete? I recently bought back 25 months of active-duty military service so I assume LWOP would be handled in a similar manner.

A. An aggregate nonpay status of six months in any calendar year is creditable service. Coverage continues at no cost to you while in a nonpay status. When you are in a nonpay status for only a portion of a pay period, your retirement deductions are adjusted in proportion to your basic pay. If your LWOP exceeded six months in any calendar year, you’d have to make a deposit to the retirement fund to get credit for that time.

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FERS disability retirement

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Q. I was placed on a FERS disability retirement by the FAA after suffering a stroke in 2005. The FAA revoked my class II medical, otherwise I would be able to return to my previous position. All my work for the FAA was conducted in either Kansas or Utah. In 2008, I obtained a job with a private company in N.J. In 2011, I was terminated and I requested unemployment benefits. The New Jersey unemployment office is stating I am not entitled to unemployment benefits due to my FERS retirement. Is this true?

A. Because this isn’t a question about federal employee and retiree benefits, you’ll have to take the matter up with the State of New Jersey unemployment office and ask them to show why you are barred from receiving that benefit.

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Survivor annuity

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Q. I am a FERS employee. When I retire, I do not wish to name my spouse for a survivor annuity because I do not want my annuity reduced. (She has a secure financial plan in place). However, I do want her to continue to be included in my FEHB plan after I retire. I am currently enrolled in a family option. I was told that she cannot be included in my health benefit package (after my retirement) unless I at least partially name her for a survivor annuity. Is this true?

A. You are required by law to provide a full survivor annuity for your wife unless she agrees in writing to a lesser amount or none at all. Because you are a FERS employee, the only lesser amount is 25 percent of your unreduced annuity. If you were to die and she wasn’t entitled to a survivor annuity, her FEHB coverage would end.

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RIF and retirement

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Q. In a recent post,  you answer that if given a specific reduction in force notice and you have the combination of age and service needed for immediate or early retirement, you can retire. Would this be the minimum retirement age and or age 50 with 20 years of service? Will this incur any penalty?

A. If given a specific RIF notice, you can take early retirement if you meet one of the age and service combinations: age 50 with 20 years service or at any age with 25. If you are a FERS employee, there won’t be any age penalty for taking early retirement, If you are a CSRS employee, your annuity will be reduced by 2 percent for every year you are under age 55 (1/6 percent per month).

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FEHB and Medicare after 65

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Q. I am 65, employed at the U.S. Postal Service and applying for Medicare Ppart A but not Part B. I am confused after reading in the FEHB benefits brochure from several plans: “When you are age 65 or over and do not have Medicare …” That sound like if I do not take Medicare Part B, plans will pay less benefits and I will be paying more. There is a benefit to taking Part B, but the monthly premium negates it. I am afraid they pay only what Medicare pays and I will be left paying the difference.

A. If you don’t enroll in Medicare Part B, you’ll be responsible for any costs that exceed the Medicare-approved amounts for physicians who accept Medicare assignment for your claims or a potentially higher amount if your physicians don’t accept Medicare. You’’ll have to decide if the premiums you’d pay for Part B will be offset over time by what you’d gain from having that coverage.

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WEP question

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Q: I was an attorney for the government from 1976 to 1982. I withdrew a lump-sum retirement and have not/will not refund deposit. I worked from 1982 to 2002 in the private sector, during which I had substantial earnings and paid applicable Social Security. In 2002 I returned to a federal job and hope to retire in November. By then I will have about 15 years of federal service of which 10 years I paid both Social Security and CSRS offset. Am I safe in assuming that I wil not suffer WEP?

A: The fact that you took a refund of your CSRS contributions and don’t intend to redeposit that money doesn’t exempt you from the windfall elimination provision. You will still get credit for that period of service in determining your eligibility to retire and in your annuity computation. The latter will simply be actuarially reduced based on how much you owe and your age at retirement.

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GS leave while mobilized

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Q: I am a civilian GS employee and an active reservist. I am getting deployed to Afghanistan for about 100 days. I was wondering if I am allowed to use any/all/combination of my military leave, civilian regular leave or sick leave while I am deployed. This would allow me to get my GS salary as well as my Army salary at the same time. My GS salary is more than my active-duty salary will be.

A: You may take military leave (the 15 days granted each year for training), annual leave or LWOP-US. You may not use sick leave. For more information about your civilian benefits while on active duty, go to www.opm.gov/flsa/oca/compmemo/2001/2001-09a.asp.

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No step increase

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Q: I have a little more than 11 years of military active-duty time and two years FERS time in law enforcement. I’m going to send off my RI 20-97 in a day or two. If I make a lump-sum payment, will my GS-6 step 3 (current pay grade) increase to a step 8 (pay grade at 13 years service)?

A: No, it won’t. However, making the deposit will increase your length of service and be used in your annuity computation when you retire.

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Back to work

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Q: I was employed by the federal government between August 1983 and September 1999. At the time I left civil service, I withdrew contributions of $50,000. I have been offered a position with the federal government again. I am now 64. If I accept the position, will I be eligible for a pension? How many years would I have to work? Am I eligible for redeposit of funds?

A: In order to get credit for your prior service, you would have to redeposit that money plus accumulated interest. If you did so, you’d be eligible for an immediate annuity because the requirements for getting that are age 62 with five years of service, both of which you’d meet. If you didn’t redeposit that money, you’d only get credit for the time you work after being re-employed. Therefore you could only retire after you have five years of service.

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Fit for duty

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Q: I have worked in government since April 15, 1991, and in December of that year had an on-the-job accident. I have endured four surgeries since then and the doctors want me to have a fifth. It’s now up to OWCP on the direction to go. I have been on light duty for more than a year, and my employers want to resolve this, including getting me to volunteer to retire, medical retire or even do a fit for duty. I have four more years before I am 57,and I prefer to stick it out, but if I choose to retire, what are my options?

A: Because of your age and service, you would only be eligible for involuntary retirement if your agency separated you, or disability retirement if OPM found you qualified for it.

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Eligible but holding

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Q: I am a 57-year-old CSRS employee with 35 1/2 years creditable service. I am eligible to retire now (since June 21, 2009) but enjoy the challenge of my job, so I have stayed on. I gave serious consideration to retiring Dec. 31, 2011, but I am not 100 percent certain that is what I want to do (my wife wants to work a while longer). Am I running a risk of losing any benefits by staying a while longer? What is the minimum amount of time required after mailing my retirement application, and the effective date I retire?

A: As to your first question, at this point, no one knows what risk you are taking by staying on. Only time will tell. On your second question, you can submit your paperwork up to the day you leave work. However, prudence suggests that you let your employer know what your plans are well in advance and that you take enough time to have your application reviewed by your personnel office. The consequences of putting your application in at the last minute include having it bounce because of errors or omissions and/or delays in processing by your agency that keep you from getting your initial interim annuity payment until months after you leave.

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Insurance for spouse

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Q: When do I have to put my wife under my health insurance? She is still working and doesn’t plan to retire for a couple of more years. I plan to retire next year. Do I have to insure her before I retire, while I am still working for the VA, or can I wait till she retires and loses her insurance to put her under my health insurance after I retire?

A: You could change your coverage from self to self and family when she loses her nonfederal coverage. The authority for that is Code 2G under OPM’s Table of Changes to Enrollment.

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Eligibility for unemployment

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Q: I am retired military with 29 years of service on April 1, 2010. I have been employed in the Defense Department lab demo program since April 12, 2010. Have an SCD leave date of Dec. 13, 1990, SCD Civ of April 4, 2010 and SCD RIF of April 12, 2010. If given a notice of involuntary separation by my agency, will I be eligible for unemployment? Where can I find more details?

A: You’ll have to check with your state unemployment office.

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Retirement date

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Q: I plan to retire the last day in February. Is that a good time to retire? I was going to retire Dec. 31, 2011, but had to change the date.

A: For most agencies, Feb. 25, 2012, was the end of a pay period. By retiring on the last day of February, you’d be getting credit for the annual and sick leave earned during that pay period plus three additional days of pay and service credit. You’d also be on the annuity roll the following day.

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Social Security offset

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Q: I know if a FERS employee retires before age 62, he would receive a Social Security offset payment under the same rules as if receiving Social Security. Under this rule, the maximum that could be earned without a payment reduction is a little more than $14,000. If I get a job that is not in the Social Security system, such as many teachers do, will the over-14K income rule still apply?

A: Yes, the limit will apply regardless of the source of the earnings from wages or self employment.

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Disability benefits

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Q: My daughter was declared permanently disabled and allowed to remain on my FEHB plan. What happens when I pass on? Will she have an option to continue coverage?

A: Yes, as long as she continues to be eligible for the disabled child benefit.

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Health benefits

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Q: My husband and I work for the post office – he will retire soon and I will carry the health insurance and leave with a deferred retirement in a few years – at 45 with 20 years – what happens to the health benefits?

A: Your husband would be able to continue the self and family coverage under Code 1M of the Table of Permissible Changes in Enrollment.

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FERS and back pay

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Q: I retired Sept. 30. I have begun receiving my estimated annuity each month. When I begin receiving my FERS supplement, will it include the amounts not paid in the months after I retired but before OPM did my final annuity computations?

A: Yes, it will.

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Unused sick leave

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Q: As a postal worker under FERS, I will retire with 35 years service with a balance of one year of unused sick leave. Will I be credited as if I had worked 36 years? I earn $60,000 annually. How many retirement years will it take me to receive and realize the year of sick leave I turn back?

A: If you retire after December 31, 2013, you’ll get full credit for your unused sick leave. If you have 2,087 hours, you’ll receive one year’s credit in your annuity calculation. Therefore, using your figures, instead of the formula being 0.01 x $60,000 x 35, it will be 0.01 x $60,000 x 36. Since I have no idea what you are getting at with your second question, I can’t respond to it.

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