By Reg Jones
No step increase
February 28th, 2012 | PAY
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.
Tags: FERS
Pay caps in annuity calculation
February 14th, 2012 | PAY
Q: I am a GS-14 Step 6 Federal 1811. With my locality pay (New York) and availability pay, I am subject to the bi-weekly and annual pay cap. For calculation of my high-3, do they use my grade plus locality plus availability pay (as per the charts) or do they use the lower amount that I got paid due to the pay cap?
A: Your annuity will be based solely on the highest three consecutive years of average pay that you actually received, the amount from which retirement deductions were taken.
Failed annuity reduction
February 13th, 2012 | Other pay adjustments
Q: I have been trying to find CFR’s or other federal regulations that instruct how disability retirement annuites are to be reduced from 60 percent to 40 percent after the first year. My annuities were never reduced automatically by the Operations Retirement Center. The IRS and I noticed something wasn’t right on my 1099R, so I initiated an ivestigation to look into my account. They discovered an overpayment for the last two years, now they want it paid back. So, I am pleading my case and want to find regulation language describing that OPM is responsible or is supposed to automatically reduce my annuities and/or handle my account.
A: You’ll find everything you’re looking for at www.opm.gov/retire/pubs/handbook/C061.pdf. Just scroll down to Section 61B.
Tags: OPM
Military buyback
February 10th, 2012 | PAY
Q: I served 16 years of active-duty military, then separated and took a federal job and paid my military buyback in full. If I decide to leave the government before I retire, can I have my military buyback refunded to me?
A: Yes, but only if you accept a full refund of all your retirement contributions. Doing so would void your right to a future retirement benefit.
Tags: military buyback, RETIREMENT
Hawaii/Alaska locality pay
February 8th, 2012 | PAY
Q: How will the 2012 final year of conversion to locality pay affect federal employees who are paid at “agency discretion” under a statute which caps their pay at EX-IV, such as those in the U.S. Attorney’s Offices. Some employees’ basic pay was under the cap when the three-year conversion began. However, in 2012, their pay would exceed the pay cap if the full amount of COLA is converted to locality pay. On the other hand, if the cap is applied, such employees will experience a reduction in gross pay, inconsistent with Congressional intent to protect employees’ pay. See 1915(a) of NAREAA. Will the employees be treated the same as “special rate” employees?
A: Yes, they will. LIke special rate employees, their pay will be capped at Executive Level IV.
Tags: locality pay
Retention pay
June 1st, 2011 | Other pay adjustments
Q: I receive retention pay of 10 percent of my base salary. I have run across articles that indicate that retention pay can be used to calculate the high-3. Is that true?
A: As a rule, recruiting and relocation bonuses and retention allowances are not considered part of the basic pay of an employee for any purpose, including calculation of retirement annuity. Since a high-3 is based solely on basic pay, the amount from which retirement deductions are taken, you can get a pretty good idea about how your pay is being treated by looking at your latest pay slip. For a more accurate answer, you can visit your local payroll office.
Tags: high-3, payroll, retention pay
TSP annuity fees
March 8th, 2011 | PAY
Q: I am a FERS employee. I haven’t been able to find what fees are associated with taking an annuity with the TSP. The percentage amount of these fees will help determine whether to go with an annuity or take a fixed monthly payment schedule.
A: There are no explicit fees. You pay the premium in exchange for a monthly payment.
Tags: FERS
Credit for annual reserve training
March 2nd, 2011 | Other pay adjustments
Q: I heard you could receive FERS retirement credit for the two-week annual training sessions of reserve duty. If so, what records are needed, and where can former reservists obtain them?
A: You already received credit for that time. 5 U.S.C. 6323 (a) provides 15 days per fiscal year for active duty, active duty training and inactive duty training. You can’t get credit for it twice.
Payroll tax deduction for CSRS
January 7th, 2011 | PAY
Q: Articles in Federal Times mentioned that CSRS employees will not receive the payroll tax deduction, but they have not mentioned CSRS Offset employees. As CSRS Offset employees pay into Social Security, will they receive the payroll tax deduction in 2011?
A: Yes, CSRS Offset employees will receive the Social Security payroll tax deduction with no increase in the amount they contribute to CSRS.
Tags: CSRS offset, taxes
Re-employment pay limits
December 16th, 2010 | PAY POST-RETIREMENT Re-employment
Q: I am a retired Civil Service Retirement System annuitant with 32 years of Defense Department service. If I accept another civil service position (DoD or otherwise), what are the pay limitations? In my case, what is the pay cap for San Diego, under the 2011 pay scale? Would my pension be considered as part of a total compensation package (Level 1 cap), or part of pay only (level IV cap)?
Also, is consideration as a re-employed annuitant feasible? I understand pay-cap limitations are considerably less stringent, but the DoD guidelines are extrememly difficult for the hiring agency to meet.
A: First and foremost, nonsalary income, such as an annuity, isn’t considered when determining an employee’s maximum pay limitation. If you are applying for a General schedule position, the maximum pay limitation is Level V of the Executive Schedule, excluding any locality payment or special rate supplements. The salary for Executive Level V is currently $145,700, while the salary for a GS-15, step 10, in the San Diego locality pay area is $155,500.
Whether you would be able to secure a position as a re-employed annuitant is an open question. It would depend on an agency’s needs and the extent to which your skills and experience are a match. As a rule, the salaries of re-employed annuitants are offset by the amount of their annuities. Therefore, before accepting a position, you’d need to find out if you would be eligible for an exception that would allow you to receive both your annuity and an unreduced salary. If you were eligible, be aware that you would receive no additional retirement benefits for the period of time you were re-employed.
Tags: annuity, pay cap, pay limits, pension, re-employment