Ask The Experts: Retirement

By Reg Jones

Refund on military deposit

Bookmark and Share

Q. I’m a CSRS employee. I am eligible for retirement. I’ve passed my 62nd birthday and will not have enough quarters to be eligible for Social Security. I have heard different accounts of whether there is a way to get a refund on the money I paid to buy back my six years of military service time.

Since I will not be eligible for Social Security and I paid the full amount to be sure I would be able to get credit for my military service, is there a way to get a refund on the nearly $8,000 I paid, for which seemingly I will derive no benefit? Is there a place in the U.S. Code (or similar) which clarifies this?

A. No, there isn’t any way you can get a refund of your deposit.

Tags: , , , , , ,

Survivor benefits and same-sex marriage

Bookmark and Share

Q. I have 32 years of CSRS service as a civilian and am in a same-sex marriage. Can I sign up during my retirement processing for survivor benefits?

A. No, you can’t, because the law governing survivor benefits hasn’t changed. However, you could elect an insurable interest annuity if you are in good health when you retire, as demonstrated by a current medical exam, and you can show that the person you are naming would benefit financially by your continuing to be alive. To pay for the benefit, your annuity would be reduced by a percentage that depends on the difference between your age and the age of the person you name. For example, if the person was older, the same age, or less than five years younger, the reduction would be 10 percent. If you were to die, the person you name would receive an annuity equal to 55 percent of your own unreduced annuity (CSRS) or 50 percent (FERS).

Tags: , , , , ,

Law enforcement retirement

Bookmark and Share

Q. I was a federal air marshal under FERS and paid into the law enforcement officer special retirement plan, five years, and into the Thrift Savings Plan. I have since left the federal government (not retirement age yet) and have had my TSP transferred into a 401(k). I was wondering how to transfer my LEO special retirement that I paid into, or where to get more information on these benefits.

A. You can get a refund of the contributions you made to the retirement fund by completing Standard Form 3106, Application for Refund of Retirement Deductions, which is available at www.opm.gov. Click on Find Form(s). Instructions on how to transfer the money are included on the form.

Tags: , , ,

VERA and cost-of-living adjustment

Bookmark and Share

Q. I am considering taking the Voluntary Early Retirement Authority that has been offered to Postal Service mail handlers for Sept. 1. I am in FERS. Is there a cost-of-living adjustment? If so, when would I receive the increase and at what percentage?

A. As a rule, FERS retirees don’t receive cost-of-living adjustments until they reach age 62.

Tags: , , ,

Re-employment and high-3

Bookmark and Share

Q. I worked for a member of Congress for a little more than six years ending 12 years ago. Because he lost the next election, I became vested and eligible to receive a small pension but no health insurance (less than 10 years of service). Although I am over 62, I have never requested of collected any retirement benefits. Now I have an opportunity to go back to work for a federal agency at the GS-15 level. I assume that the benefits and time would be additive in some way, but how long would I have to work for my high-3 to be based on the higher salary? I have heard it could take five years. At what point would the retirement health insurance be locked in?

A. Your high-3 is always the highest three consecutive years of average salary. Because you are already 62 and can retire with as little as five years of service, which you already have, you would only need to work for three years to establish a new, higher high-3.

Tags: , , , , , ,

BRAC and workers’ comp

Bookmark and Share

Q. I was affected by base realignment and closure in 1995. My agency moved from Kettering, Ohio, to Columbus, more than 90 miles each way. Married with a child in school, I was not able to relocate.  Incidentally, I was also on workers’ compensation at the time. I resigned due to work offered outside my commuting area but received workers’ comp for the next 13 years. In March 2009, I gained employment at another government agency (we moved to another state). The new agency doesn’t want to give me my full tenure toward retirement.  It was always my belief that if an individual is receiving workers’ comp, he is still considered an employee who is treated as if he has never left his agency. I originally joined the federal government in December 1975.  If my seniority continued, I would now have 37 years. But the agency I work for has recomputed my seniority to be October 1988. Am I entitled to my 1975 seniority date?

A. No, you aren’t. The period of time between when you resigned from the government and when you returned to work can’t be included when determining your years of creditable service.

Tags: , , , ,

Service computation date and break in service

Bookmark and Share

Q. I am a retired airman who served from Aug. 9, 1978, to Sept. 1, 1998. I entered federal service at Defense Finance and Accounting Services on April 12, 1999, serving until Aug. 31, 2007 — eight years, four months and 19 days. We had a reduction in force and closed Aug. 31, 2007. I had a break in service until July 20, 2008. when I started at the Department of Veterans Affairs, where I still work. My old service computation date was April 12, 1999. What should my new SCD be with that 10-month, 19-day break?

A. Your new service computation date would be determined by working backward, a day at a time, from the date on which you re-entered government until all that prior service was accounted for.

Tags: , , ,

Disability retirement and Medicare Part B

Bookmark and Share

Q. I was approved for OPM disability retirement and Social Security. I understand that I can elect Medicare Part B coverage and pay an additional premium. I already am covered under the Federal Employees Health Benefits plan and pay that premium. I also have been advised that I will pay a penalty for every year that I do not sign up for Medicare Part B while eligible. Is that so in every case? Should I pay both premiums? I am 52 years old.

A. Yes, there is a penalty for every year you don’t sign up for Part B. However, I can’t tell you if you should sign up for it. You’ll have to figure that out on your own based on your current and anticipated medical needs. Once you’ve figured that out, compare what will be covered by your FEHB plan with what Part B covers.

Tags: , , , , , , ,

Unused sick leave

Bookmark and Share

Q. I’m covered under FERS for retirement and currently have 27 years and eight months of service (service computation date of Oct. 10, 1984) with over a year of sick leave accrued/unused. I understand that starting in 2014, unused sick leave for FERS employees will be credited “day for day” vs. “1/2 for day.” If I schedule retirement for January 2014, will my unused sick leave place me over the 30-year mark for service  and qualify me for the 1.1 percent of pay/year of service for the FERS annuity portion of the retirement package?

A. No, it will not. Sick leave is only added after an employee has met the age and service requirements to retire. Further, the 1.1 percent multiplier is only used when an employee with at least 20 years of service retires at age 60 or later.

Tags: , , , , ,

Refund on military deposit?

Bookmark and Share

Q. I have paid the military buyback but am in the process of increasing my disability rating through the Veterans Affairs Department. This would not be advantageous for me to combine my military with civilian service in the federal government. Can I ask for a refund of the military buyback? What is the form or process I would use to do this?

A. No, you cannot get a refund of your deposit.

Tags: , , ,

Survivor annuity and Social Security

Bookmark and Share

Q. I retired in 2002 with 32 years of service and receiving a CSRS annuity. I am 65 and do not have the required 40 quarters to collect Social Security. My retirement annuity is being reduced for “full surviving spouse’s annuity.”  Will my wife, who is 61 and plans to draw Social Security next year (over $600 a month), be able to draw her full Social Security and the CSRS survivor annuity, even though I was not eligible for Social Security, if I pass away before her?

A. Yes, she will be able to receive her full, earned Social Security and any CSRS survivor annuity that you have provided for her.

Tags: , , ,

6c retirement

Bookmark and Share

Q. When I am 47 years old, I will have 20 years of coverage under 6c law enforcement pay and 25 years of federal service (FERS). Will I be able to retire, or do I have to wait until I am 50?

A. You will have to wait until you are 50. Only those with 25 years of covered service can retire at any age. Noncovered service can’t be used to meet that 25-year requirement.

Tags: , , ,

VSIP

Bookmark and Share

Q. I am a CSRS employee and was offered an early retirement by July 31 by Voluntary Separation Incentive Payments. I will be 53 in November. If I take this offer to leave two years and four months early, am I losing — as opposed to waiting the two years and four months until age 55. They are giving $20,000 in two lumps — $10,000 in December 2012 and the other $10,000 in December 2013.

A. If you retire before reaching age 55, your annuity will be permanently reduced by 2 percent for every year you are under age 55 (1/6 percent per month). In your case, that would mean a reduction of 4.67 percent. Whether the VSIP would make up for that is something you’ll have to consider, perhaps with the help of a financial adviser.

Tags: , , , ,

3 questions on CSRS retirement

Bookmark and Share

Q. Three questions regarding CSRS retirement:

1.  I read that in 2010 and 2011, there was a six- to 12-month delay before retiring employees actually receive their full pension. I’m not sure if a partial pension was received in the meantime and how much. Is this still true for employees retiring in 2012? I am under CSRS and planning on retiring the end of July or early August. I understand it’s best for me to retire at the end of a month or within the first three days of a month to receive my pension check the following month. I will need my monthly pension to cover my mortgage and delays will not pay the rent.

2. How long after I retire does it take to receive payment for my annual leave? I have heard and read different time frames.

3. Since I accumulated my full Social Security quarters through private industry (CSRS does not deduct for Social Security), will I be affected by any windfalls? I am under the original CSRS retirement program, not CSRS offset.

A. 1. While the Office of Personnel Management is improving the processing of retirement applications and increasing the amount provided in interim payments, the delays in finalizing a case are still substantial. As a CSRS employee, if you want to be on the annuity roll as quickly as possible, you should retire no later than the third day of a month. That way, you’ll be on the annuity roll in that month.

2. Lump-sum annual leave payments are made by your agency. You’ll have to check with your payroll office to learn what their processing time is.

3. Because you’ll be receiving an annuity from a retirement system where you didn’t pay Social Security taxes, you’ll be subject to the windfall elimination provision. The WEP will reduce, but not eliminate, that benefit if you have fewer than 30 years of substantial earnings under Social Security.

Tags: , , , , , , , ,

Workers’ comp and survivor annuity

Bookmark and Share

Q. I have been receiving my husband’s annuity but got hurt at work and now receive workers’ compensation. Because of this, my survivor annuity has been canceled. Is this correct?

A. Yes, you have to make a choice. If you elect workers’ compensation and it is later canceled, you can once again receive your survivor annuity.

Tags: ,

Pay period ending and retirement date

Bookmark and Share

Q. I am under FERS. I turn 65 on Nov. 20 and will have completed 12 years and one month as a federal civilian. My service computation date is Oct. 10, 2000. Is it possible for me to retire effective Nov. 28, or do I have to wait until the end of the pay period?

I will have over 300 hours of annual leave to sell back on Nov. 28.  Because my hourly pay is $69, will that $20,700 affect the annual limit from Social Security limit in 2013?  I will be applying for Social Security starting on my 65th birthday.

How soon should I apply for retirement — 60 days prior to Nov. 28? Earlier?

A. No, you don’t need to wait until the end of a pay period to retire. The only disadvantage of not doing so is that you wouldn’t receive credit for any annual or sick leave you would have earned during that pay period.

Regardless of the date you pick, it’s recommended that you submit your retirement application at least 60 days in advance.

As for the impact on any Social Security benefit you are entitled to, you may be protected by the Social Security first-year rule. To find out more about it, got to www.socialsecurity.gov/retire2/rule.htm.

Tags: , , , , , , ,

Disability retirement

Bookmark and Share

Q. As part of an Equal Employment Opportunity Commission settlement, my agency wants me to accept a federal disability retirement and is willing to put me on administrative leave while waiting for approval. I am a federal law enforcement officer with 21 years service, and my high-3 is about $128,000. I recently had a spinal fusion. I will get around $70,000 in disability retirement the first year, and if I get denied by Social Security, I can ask to continue at 60 percent rather than 40 percent, which would give me $70,000 per year. This would work out better than my regular retirement in four years. Are they right about being able to continue to get paid at 60 percent? I cannot find any regulations that allow this.

A. Like you, I can find no basis for your agency’s contention that you could continue at the 60 percent level after the first year. The law is clear. For the first 12 months, you’d receive 60 percent of your high-3, minus 100 percent of any Social Security disability benefit. From then until age 62, it would be reduced to 40 percent of your high-3, minus 60 percent of any Social Security disability benefit. If you weren’t eligible for a Social Security disability benefit, you’d receive 60 percent and then 40 percent of your high-3.

Tags: , , , , , ,

Annual leave lump sum

Bookmark and Share

Q. I’m a CSRS employee. When I retire and sell my annual leave, will Social Security be deducted from my lump-sum payment?

A. No.

Tags: , , ,

Military buyback and reduced Social Security

Bookmark and Share

Q. I have civil service retirement with the Postal Service. I have been informed that if I do not pay back the Social Security I did not need to pay when I was in my five years of military service, then once I am eligible for Social Security, the payback will start being deducted from that. I thought once that withdrawal started, it would not stop, even after it was paid up. Is this true? And if I pay it back in full now, my Social Security will not be touched for that at all. Is that correct? I am 58, and will be eligible for Social Security at age 62½ due to working all the quarters required.

A. First, let me correct a misunderstanding on your part. Because you served in the military after Dec. 31, 1956, you were required by law to have Social Security deductions taken from your military pay.

Now we can move on to the issue that’s bothering you. By law, any CSRS employee who retires, was given credit for his active-duty service in his annuity computation, did not make a deposit to the retirement fund for that service, and is eligible for a Social Security benefit at age 62 will have those years of service eliminated and his annuity recomputed without them. If he retires at or after reaching age 62, the reduction will occur on the day he retires.

While this “Catch-62” won’t affect the amount of your Social Security benefit, there’s another provision of law that will. The windfall elimination provision reduces the Social Security benefit of anyone who is receiving an annuity from a retirement system where he didn’t have Social Security deductions taken from his pay, such as CSRS, and has fewer that 30 years of substantial earnings under Social Security.

Tags: , , , , , , , , ,

Survivor annuity for dual-federal couple

Bookmark and Share

Q. I am retiring under CSRS with 34 years of service. My spouse will still be working as a federal employee and retire in eight years with a 20-year full pension under FERS. Is there any advantage to taking the survivor benefit for my spouse, or is it better to elect not to take the survivor benefit? If I pass away, would it be considered double-dipping for my spouse to collect the survivor benefit from my retirement?

A. Let me clear up two points. First, federal employees are required by law to provide a full survivor annuity for their spouses. They can only provide a lesser amount (or none at all) with their spouse’s written consent. Second, spouses can receive a survivor annuity and the salary of their position or a survivor annuity and their own annuity. Now that you know what the rules are, you and your spouse should be able to make an informed decision.

Tags: , , , , ,