Ask The Experts: Retirement

By Reg Jones

FERS vs. FERS-RAE

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Q. My question is related to being covered under FERS if I only worked for the federal government for about four months. My dates of employment were from September 2012 until January. I have recently been rehired with the Veterans Affairs Department, as of April, but I am unsure if I qualify under: 1) “the individual on Dec. 31, 2012, was covered under FERS” or 2) “the individual on Dec. 31, 2012, was performing civilian service which is creditable or potentially creditable service under FERS.” I was working as of  Dec. 31, 2012, so do I qualify to be “grandfathered in” now that I have been rehired?

A. The answer is clear. Because you had fewer than five years of prior creditable service, when you were rehired your agency is required by law to set your FERS retirement contribution rate at 3.1 percent.

Comments

  1. Ryan Says:
    May 10th, 2013 at 11:55 am

    OPM says otherwise:

    Example-
    Employee receives a FERS covered appointment effective April 29, 2014. Employee had one previous period of civilian service with the Federal Government from September 14, 2008, to January 5, 2013. The employee was covered under FERS throughout that previous period of service.

    Answer-
    Employee is subject to FERS coverage because the employee was employed in a civilian position subject to FERS on December 31, 2012. (The fact that the employee had not yet completed 5 years of service as of December 31, 2012, is not a relevant consideration in this scenario because the employee was covered under FERS on December 31, 2012.)

    http://www.opm.gov/retirement-services/publications-forms/benefits-administration-letters/2012/12-104.pdf