Ask The Experts: Retirement

By Reg Jones

Retiring LEO

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Q: I am a FERS employee who had 20 years at 6c (FF/LEO) in December. In January 2013 I will have 25 years total federal civil service (21 years 6c, 4 years non-6c, with no breaks in service). I am being told that I can retire. Is  this true? OPM and retirement state “25 years of service,” not 25 years of 6c?

A: A FERS law enforcement officer can retire at age 50 with 20 years of covered service or at any age with 25 years of covered service. If you are under age 50, a combination of covered and non-covered service wouldn’t make you eligible to retire.

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Intermittent employment

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Q: I work on retirement benefits for employees. My question concerns intermittent employment for which the employee paid into FICA and wants the time to be counted toward service history for retirement. This work was performed in the late 1960s and the employee is under CSRS. I read somewhere that non-deduction service under CSRS will count toward retirement, even if the deposit is not paid. My concern is, whether OPM will accept the documentation that I have for proof of the intermittent employment. In order for OPM to accept the intermittent time worked for retirement, will the time accounted for from the SF-50s be sufficient (so that time can be counted by days) or does HR need to actually report the number of hours worked during the intermittent appointment? I am unable to find the exact number of hours worked during the intermittent appointment.

A: As a rule, OPM accepts the information on the SF-50s.

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Leave accrual

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Q: I retired from the Air Force in 1998, after 26 years and two months of service. In September 2000 I started a civil service career; and immediately started paying the deposit of the military buyback to secure all of my military service, (completed by April 2003). I am trying to ascertain whether I should have been placed in the CSRS Offset pension program, and started acquiring eight hours annual leave per pay period. I am 57 and preparing for retirement in about three years and trying to ensure my record is accurately reflecting my benefits.

A: Because you were first employed after Dec. 31, 1987, you were automatically placed in FERS. As someone receiving military retired pay, you would only be entitled to credit for that time in determining your leave accrual rate if that pay was awarded on account of a service-connected disability either incurred in combat with an enemy of the U.S. or caused by an instrumentality of war and incurred in the line of duty during a period of war.

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Retired military

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Q: I am 63 and a retired Marine. I started working for the VA in September of 2009 and decided not to participate in a buyback. There is a FERS deduction taken from my pay. Will I be eligible for retirement under FERS? If so, when?

A: You would be eligible for an annuity after you have completed five years of FERS service.

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Transferring leave

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Q: My husband is retired military (10-percent disabled) and works for the postal service. If he were to apply for a GS position, and be selected, would his time (14 years) and sick/annual leave transfer over to the GS position?

A: Yes, his years of service and annual- and sick-leave balances would transfer to his new position.

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Time to retire

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Q: I am 58 and have been with the government for 37 years under CSRS. My high-3 salary was achieved Jan. 18. I have read the best dates to retire are: June 30, 2012 – which is the first date the pay period ends at the end of the month for annuity to start in July; Jan. 3, 2013; in which I will receive payment for annual leave over 240 hours; or June 29, 2013 – in which I would receive 75 percent of my salary. (My 39th anniversary with the government. By waiting, I am concerned about several things:  the high-3 salary changing to high-5 salary; pay freeze; and what about buyouts? If you had narrowed down your retirement dates to the above three, which would you choose, and why?

A: Only you can chose a retirement date. And you can do that by selecting the one that best satisfies your financial and emotional needs. Just remember that since you are already eligible to retire, if it looks like the law is going to change or there are freezes or buyouts, you can retire at any time before your “optimal” date.

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LWOP and benefits

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Q: I will be on long-term 12 to 18 months of LWOP. Can you tell me the impact on my retirement (FERS), health benefits, life insurance and any taxes due. How do I pay these premiums to continue my benefits in the future, especially when I retire.

A: The answers to all your questions except taxes due will be found at www.opm.gov/oca/leave/HTML/LWOP_eff.asp. For the tax question, you’ll have to go to the Internal Revenue Service.

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Transitional employee

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Q: I am a 46-year-old letter carrier with a start date in September of 1990. However, for the first four years, I was a casual (NTE) and a transitional employee (TE). I have been a career employee since August of 1994. Does my NTE or TE time count in any way toward retirement? If I chose to retire now (before I was eligible for full retirement, 56/30 or 60/20), would I be able to retain my health insurance (at the retired employee rate)? Our NALC magazine and the post office website explains briefly the retirement process, but it’s not detailed. Any info on how much I could expect to receive monthly if I retired now would be greatly appreciated. Also, would I have to wait until age 56 years and 2 months to receive any retirement benefits or would they come now? I have $95,000 in my thrift savings account. Would I have to take a 30 percent hit on that if I took that out now upon separation? Or could I draw monthly installments without a penalty?

A: Neither your NTE or TE employment count toward retirement. Because you don’t meet the age and service requirements, you can’t retire now. You could, of course, resign and apply for a deferred annuity. Because you have at least 20 years of service, you could do that at age 60. However, deferred retirees may not re-enroll in the FEHB program. Note: Postal service retirees pay the same FEHB premiums as other federal retirees. They no longer pay the lower premiums enjoyed by Postal Service employees.

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Future pension

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Q: If I left federal service (FERS) at age 56 with 14 years of service, would I be eligible for a FERS pension at age 62?

A: If you didn’t take a refund of your retirement contributions, you’d be eligible for a deferred annuity at age 62.

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Active duty and reserve service

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Q: I served 15 years of active service in the Marine Corps. I was discharged and for the past three years I have had a job as a civilian in the federal government. I would like to buy back my 15 years of active-duty military time to have it count toward my FERS retirement. I am also planning to join the Marine Corps Reserve. If I buy back my 15 years of active service and then serve in the reserves for five years, am I then eligible to receive a retirement check from the reserves and also have that same 15 years count toward my civilian government retirement? In short, can I receive two separate retirement checks using the same 15 years of active service? On a related note, does my time in ROTC also count toward my military reserve retirement?

A: Since this is a site for civilian employees and retirees, I don’t know if you’ll be eligible for a retirement check from the reserves. However, if you are and you make a deposit for your active-duty service, you will be able to receive both benefits.

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Elimination of FERS supplement

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Q: The congressional supercommittee proposed eliminating the FERS supplement. The committee failed to reach agreement, but I can’t help but think these proposals will surface again. Had they been successful, would this elimination have applied to all employees retiring under FERS after enaction of their proposals? Or would it only have applied to new hires with less than five years of service? What if an employee retired under early out provisions before enaction? I’m 53 with 30 years of service and won’t be eligible for the FERS supplement until October of 2014. If the proposed action would have passed or has potential to pass in the future, do you know if I would be affected, or would still be eligible for the supplement if I took the early out before it’s enacted?

A: You want what you can’t have, a prediction of future events. You’ll just have to wait to see what changes, if any, occur and, if they do, how they will be applied.

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Military retirement waiver

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Q: I am an active-duty retiree and served 26 years continuous active duty, retiring in 1997. I am employed under FERS. I am in the process of establishing a military deposit account and understand that the amount of the deposit must be paid in full prior to submission of a retirement application in order to receive credit for my active-duty time for federal retirement. I would like to know if there are any provisions in law that allow enlisted retirees to receive military retirement and federal civilian retirement for the same periods of service. I am also in receipt of VA disability compensation for service-connected disability which, as I understand it, is not affected by any federal retirement options.

A: In the retirement statute, no distinction is made between commissioned and noncommissioned military retirees. You are correct that your VA disability payments would not be affected.

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Military, civilian retirement

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Q: I completed 19 years of active-duty service in the Army. I completed my time in the Texas National Guard for retirement. At age 60, I started receiving my military retirement check. I am a federal civilian employee with 11 years under FERS. I have received my statement (amount) of buyback of military time. I want to be sure I will retain my military retirement check. Buyback will give me a total of 30 years for civilian retirement when I pay the deposit. I just want to confirm I will receive both retirements with no reduction.

A: If you make a deposit for that active-duty service, you’ll be able to receive both retirement benefits with no reduction in either.

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Windfall elimination

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Q: I have been unable to identify if there is an exception to the windfall elimination provisions that will allow me simultaneous entitlement to a CSRS annuity and to full or non-reduced Social Security benefits. I assume
that Social Security benefits are not subject to reduction under the windfall elimination provisions if the credits earned were earned as a
federal employee and during the time period (15 years) in which the credits were earned, I made no payments into any other retirement system. I think that benefits earned under the CSRS system were earned during a time period (20 years) when I made no contributions to the Social Security trust fund. The facts are that I am a CSRS annuitant, I also earned 60 Social Security credit hours employed by the federal government in which both the federal government and I paid into the Social Security
trust fund for the hours earned and during which I was paying into no other retirement system other than Social Security. There were two separate periods of time associated with his situation: 20 years payment into the CSRS system and approximately 15 years paying into Social Security as a federal employee. Can Social Security payments be reduced where the Social Security credits earned were earned as a federal employee and no payments were made into the CSRS system, or any other retirement system, during the time the payments made?

A. No. To see how and why the windfall elimination provision is applied and what the exceptions are to it, go to www.socialsecurity.gov/pubs/10045.html.

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Retirement-date numbers

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Q: I am a FERS employee who plans to retire Nov. 30 or Dec. 31 this year or Jan. 15, 2013. My Service Computation Date is May 15, 1982. Which one is the best date to retire? I will be 59 on Aug. 20. I also read an article about losing annuity supplement if it exceeds the maximum amount
of $14,160 annually (not my Social Security benefit unless I retire at 62).

A: I can’t advise you. What I can do is give you some facts that may help you make a decision. First, the 2012 leave year ends Jan. 12, 2013. If you retire after that date, any annual leave you have above the maximum carryover will be lost. Second, as a FERS employee, if you retire after the last day of any month, you won’t be on the annuity roll until the following month. For example, if you retired Jan. 12, you wouldn’t be on the annuity roll until February. Third, to receive a full cost-of-living adjustment in the year following your retirement, you’d need to be on the annuity roll in December. Any month you retired after that would result in your COLA being reduced by 1/12th.

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Forced to retire

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Q: I am 79 with 40 years of service with the post office. I was told that if I resigned that I would be able to get a lump sump from my retirement so all the paperwork was done. Now I’ve been told that because of my age and that I have more than 30 years with the post office that I cannot resign. I would have to retire per the law. I need to get the lump sum to save my house which is in foreclosure. What can I do?

A: Unfortunately, there’s nothing you can do. Because you are eligible for immediate retirement, you cannot receive a refund of your retirement contributions. That’s the law, and there’s no way around it.

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Retirement date

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Q: I am a CSRS employee who plans to retire on or about Jan. 3, 2013. Is this a safe date to maximize my annual leave accruals and still be paid for the January retirement payment?

A: Yes, because the 2012 leave year ends on January 12, 2013. And, because you are a CSRS employee, you can retire up to the third day of a month and be on the annuity roll in that month. Note: Your first month’s annuity will be reduced by 1/30 for every day you are still on the rolls as an employee.

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Returning employee

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Q: I worked for the government for three years a long time ago and returned recently. I will be eligible to retire at 62 in about three years. I plan to work until 67, if possible. When should I pay back the withdrawals I took from my CSRS retirement? Is it better to do it sooner or later, assuming that I have the funds available?

A: Making a deposit sooner than later is the better option because interest continues to accumulate on the amount owed.

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Sick and annual leave

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Q: I am a FERS employee who has more than a year of accumulated Sick leave. Under the current rules, I can get credit for 50 percent until 2014 when I can get 100 percent credit. What’s the first day I can retire to get the 100 percent credit, and how does that fit with the best day to retire to take advantage of getting paid for the maximum amount of annual leave 240 carry over, plus the maximum accumulated during the last year?  Can I get both or will I have to make a choice?

A: You can get full credit for your unused sick leave if you retire on or after Jan. 1, 2014. Because the 2013 leave year ends on Jan. 11, 2014, you could retire up to that date and get credit for all your accumulated annual leave.

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No buyback

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Q: I work for the government under FERS. I retired from the military after 20 years, but did not buy back my time for retiring from the federal government. I am a GS13 and will be 62 next year and will also have 10 years working for the federal government. Will I get some sort of retirement? Will I be allowed to draw a retirement from the the federal government and also continue to draw my military retirement pay?

A: To be eligible for a FERS annuity at age 62, you would only need to work for five years. If you retire at that age with 10 years, your annuity would be calculated using this formula: 0.01 x your high-3 x 10 years. Because you haven’t combined your active-duty military service with your civilian service, you’ll be able to receive both benefits, with no reduction in either.

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