Ask The Experts: Retirement

By Reg Jones

Changing from CSRS to FERS

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Q. I have 31 years with CSRS and have 10 years Social Security paid in. Is there any advantage in changing over to FERS at this late date? I find that I would receive very little from Social Security.

A. Because there is no provision in law that would allow you to transfer to FERS, your question is moot.

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Marriage, retirement and age

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Q. I expect to marry a woman from abroad about two years after I retire. Does our age difference factor into her spousal annuity?

A. While her age doesn’t matter, when you marry and elect a survivor annuity does. If you marry before you retire, your annuity will be reduced to provide for that benefit (around 10 percent (CSRS) or exactly 10 percent (FERS)). If you marry after you retire and elect a survivor benefit, there will be two reductions in your own annuity: the standard reduction and a permanent actuarial reduction to pay the survivor benefit deposit. The deposit equals the difference between the new annuity rate and the annuity paid to you each month since you retired, plus 6 percent interest. The amount of the deposit would be divided by an actuarial factor based on your age on the date your annuity is reduced to provide for the survivor benefit.

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Locality pay

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Q. I recently accepted a job in my civilian pay series at another Air Force base. My pay has decreased more than $8 an hour due to the locality pay. I am at a wg9 salary, so that really hit the pocket book very hard. Is there a provision to ease the pain of such a decrease in salary?

A. No. By law, locality pay reflects the cost of living in each area.

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Retirement options before MRA

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Q. I am 51 and have 32 years for FERS retirement now. I need to be at least 56 to retire. If I quit civil service now and work in the private sector, will I still receive FERS retirement and the FERS supplement when I turn 56? What other benefits would I lose, i.e. health insurance?

A. If you left government now, you could apply for a deferred annuity at age 60. You wouldn’t be eligible for the special retirement supplement, nor could you re-enroll in either the Federal Employees Health Benefits or Federal Employees’ Group Life Insurance programs.

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Deferring/postponing retirement and special retirement supplement

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Q. I have 28 years of service at 56½ years of age. My MRA is 56. If I defer/postpone my retirement, at what age can I collect without any penalties? Also, would I be eligible for the special retirement supplement at that time?

A. If you retired under the MRA+10 provision, you could postpone the receipt of your annuity to age 60 and avoid the age penalty. However, you wouldn’t be eligible for the special retirement supplement. Although you could resign from the government and apply for a deferred annuity at age 60, doing so wouldn’t gain you anything. But it would lose one very important thing. If you were enrolled in the Federal Employee Health Benefits or Federal Employees’ Group Life Insurance programs, you wouldn’t be able to re-enroll when your deferred annuity began. You would if you retired under the MRA+10 provision.

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Interpretation of CSRS statement on Social Security

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Q. Can I assume that previous employment to government employment, and a second job with payments to the Social Security trust fund while employed with the federal government, will not be subject to the CSRS offset? This is how I interpret the statement below.

“CSRS annuity will be automatically reduced by the amount of Social Security benefit you earned while a CSRS offset employee.”

If I am correct, then what is the formula used to determine offset and nonoffset benefits? I have at least 80 quarters accumulated from outside employment while working under the CSRS offset.

A. As you noted, your CSRS offset annuity would be reduced only by the amount of Social Security benefit you earned while a CSRS offset employee.

As a result, you’d receive approximately the same amount of money; however, it would come from two places, OPM and the Social Security Administration. Note: Because you’d be receiving a portion of your annuity from CSRS, a retirement system where you didn’t pay Social Security taxes, you’d be subject to the windfall elimination provision.

The WEP would reduce your total Social Security benefit if you had fewer than 30 years of substantial earnings under Social Security.

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Military service and buyback

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Q. I was in the Air Force title 10 from July 1977 to April 1992 (14 years and seven months). I was in the Air National Guard title 32 from June 1992 to June 2006 (14 years). I retired from the Guard title 32 and am receiving a retirement check. I now have a civil service job, and human resources is saying I can purchase the title 10 time toward retirement. If I purchase the title 10 time, will I have to forfeit my title 32 military retirement? Also, if this is correct, how would the 14 years benefit my retirement from FERS?

A. Your HR is right. You can make a deposit for your period of active-duty service and get credit for that time in your annuity computation when you retire. Each month of bought back service would be worth 1/12 percent (1 percent per year). Making a deposit would not affect your entitlement to reserve retired pay.

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Leaving federal service, intending to return

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Q. I have been employed with the Department of Homeland Security in the Transportation Security Administration for just under five years. I am planning to leave federal service to obtain field experience in the private sector with ambitions to return to the federal system with the FBI.

1. Are there any specific impacts of leaving service before the five-year milestone?

2. Are there specific do’s and don’t’s when leaving with intent to return to service?

3. Will the time I have invested stay with me when I rejoin the system?

4. Do I need to resume service within a certain time?

Some information that may be needed: I joined DHS on Jan. 6, 2008. I plan to leave before my five-year mark, probably around October. I contribute to a TSP and plan to make a 100 percent withdrawal or roll that into my private sector’s retirement plan if possible. I plan to return to federal service within three to five years, hoping to be employed with the FBI. I am 25.

A. If you leave before you have five years of service, you won’t be vested in the retirement system; therefore, you wouldn’t be entitled to any benefit if you didn’t return. If you did return to federal employment and had left your retirement contributions in the fund, you’d pick up right where you left off. If you had taken a refund, you’d have to redeposit that money to get credit for your previous service.

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Health insurance following 6c disability retirement

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Q. I am a federal law enforcement officer with four years of service in a 6c covered position. I was injured in the line of duty and my agency is unable to accommodate me in another position, so I am being medically retired. What are the health insurance options for me and my family after my disability retirement?

A. Assuming that you are enrolled in the Federal Employees Health Benefits program, as a FERS disability retiree you will be able to continue that coverage. Note: When you apply for FERS disability retirement, you must simultaneously apply for Social Security disability benefits. If you don’t, OPM won’t process your case.

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CSRS offset retirement and Social Security

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Q. I’m a CSRS offset employee. Will I draw a Social Security check and a pension check from my agency each month? I have more than 31 years with the U.S. Department of Labor, and I’m retiring in a couple of weeks.

A. No, you won’t. You’ll receive a monthly annuity payment from the U.S. Office of Personnel Management, and, when you are eligible for a Social Security benefit at age 62, your CSRS annuity will be reduced (offset) by the amount of Social Security benefit you earned while a CSRS offset employee. That amount plus any additional Social Security benefit you earned elsewhere will be paid to you by the Social Security Administration. Note: Because part of your annuity will be from CSRS, a retirement system where you didn’t pay Social Security taxes, if you have fewer than 30 years of substantial earnings under Social Security, your Social Security benefit will be impacted by the windfall elimination provision. The WEP will reduce but not eliminate that benefit.

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Spouse’s Social Security and survivor annuity

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Q. I am a retired federal employee and receive a $5,300 monthly CSRS annuity. I do not qualify for Social Security. My wife gets $600 a month in SS benefits that she earned working. If I die, will her survivor benefit of $3,200 a month be reduced by the $600 a month she receives in SS?

A. No, She’ll receive her earned Social Security benefit and her CSRS survivor annuity, with no reduction in either.

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CSRS and Social Security

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Q. I retired on an early out in 2005 after more than 28 years of service. I saw a question about Social Security eligibility for retired postal carriers Aug. 17. I was told by SS that I could get about $300 since I have about 60 quarters. But I was told by someone else I would be reduced in my CSRS annuity payments by that amount. It is called offset. Could this be true? How does the offset work?

A. No, your annuity won’t be offset. However, because you were a CSRS employee, you will be subject to the windfall elimination provision. The WEP reduces the Social Security benefit of anyone who receives an annuity from a retirement system where he didn’t pay Social Security taxes, such as CSRS. To learn how the WEP works and how it would affect your Social Security benefit, go to www.ssa.gov/pubs/10045.html.

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FEHB and retirement coverage

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Q. My husband and I are federal civilian employees. I have been covered under his FEHBP for many years. Do I need to move it over to my own coverage for my last five years of government service?

A. No. You need only to be covered by the FEHB program, not enrolled in it.

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FEHB pre-tax savings

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Q. I meet the five-year requirement for maintaining FEHB coverage once I retire. However, after I retire, can I switch the policy to my wife, also a fed, as the primary policyholder to get the pre-tax benefit? Will that affect my future eligibility?

A. Yes, you can. And no, it won’t affect your future eligibility.

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Spouse’s insurance after prospective retiree’s death

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Q. I am a FERS employee and plan to retire at age 60 with more than 20 years’ service. I will have been enrolled in FEHB for more than five years and want to know: If I elect to not have a survivor on my annuity, will my spouse, who receives a monthly military retirement from the U.S. Navy and has Tricare for Life, be able to keep the FEHB after my death?

A. No. Your spouse has to be both covered under the self and family option of your FEHB plan and receiving a survivor annuity. As a FERS employee, you have the option of electing a full survivor annuity (50 percent) or half (25 percent). You can elect the lesser amount (or none at all) only if your spouse agrees to that in writing.

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Annual leave and retirement timing

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Q. I’m getting ready to retire. What is the maximum annual leave I’ll be paid for? I am capped at 240 hours but will have close to 400 when I retire.

A. If you retire before the next leave year begins, you’ll receive a lump-sum payment for all your accumulated and unused annual leave.

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Retirement and insurance

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Q. As a FERS civil servant, if I am covered under Tricare for the last five years before retirement, and I enroll in FEHB just before retiring, can I maintain FEHB in retirement and can my active-duty spouse be covered under FEHB if we choose to do so after I’ve retired?

A. Yes.

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Monthly Social Security estimate

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Q. If I retire early and can receive the Social Security supplement at age 56, how can I find out from Social Security how much I will be getting each month in the supplement?

A. You can’t. You’ll have to go to www.ssa.gov/mystatement and get an estimate of your Social Security benefit at age 62. When you have the figure, plug it into the following formula: Social Security benefit estimate x your total years of FERS service rounded to the nearest year ÷ 40.

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USPS retiree and Social Security quarters/benefits

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Q. I am a USPS retiree receiving an estimated annuity from USPS. I am 63½ and am thinking of applying for Social Security. I have more than 40 quarters of Social Security deductions outside USPS. I also have more than 40 quarters of Social Security deductions within USPS under the CSRS Offset retirement system. How will this situation affect my Social Security benefits and/or annuity?

A. If you have fewer than 30 years of substantial earnings under Social Security, you’ll be subject to the windfall elimination provision. It will reduce but not eliminate your Social Security benefit. That’s because part of your annuity will come from your years as a pure CSRS employee, a retirement system where you didn’t pay Social Security taxes.

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CSRS survivor benefit and Social Security

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Q. I am a retired federal employee under CSRS. My wife has worked the requisite number of years under Social Security to qualify her to receive Social Security benefits.

If I pass on and she begins to receive survivor benefits from my CSRS pension, will she still be able to apply for and receive Social Security benefits based on her own work? If she does receive Social Security benefits, will there be reductions because of her receiving survivor benefits from CSRS?

A. Nothing will alter her entitlement to receive an unreduced Social Security benefit based on her own work record.

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