Ask The Experts: Retirement

By Reg Jones

FERS after resignation

Bookmark and Share

Q. I resigned from the federal government May 21 with a retirement SCD date of March 22, 1988, so I am vested in FERS. When I elect to apply for a refund of my FERS, do I get everything that I have in my FERS account or just the portion that I put in?

A. You’d get what you contributed to the retirement system, plus accrued interest.

Tags: ,

Military and federal retirement

Bookmark and Share

Q. I am a federal employee with 21 years military service. I receive military retirement pay and a separate disability from VA. I am considering retiring in five years. If I buy my military time back now, can I keep receiving my military retirement until I retire from the federal government? Do I still receive my VA pay after federal retirement?

A. The answer to both questions is yes.

Tags: ,

Bookmark and Share

In my last column (read it here) I wrote about the age and service requirements for Civil Service Retirement System (CSRS) employees to retire. In this one, I’ll focus on Federal Employees Retirement System (FERS) employees.

FERS age and service requirements to retire

Immediate retirement

Age 62, with 5 years of service.

Age 60, with 20 years of service.

Minimum retirement age (MRA), with 30 years of service.

MRA, with 10* years of service.

Early retirement

Age 50, with 20 years of service.

Any age, with 25 years of service.

Deferred retirement

Age 62, with 5 years of service.

Age 60, with 20 years of service.

MRA, with 30 years of service.

MRA, with 10* years of service.

* If you retire under the MRA plus 10 provision, your annuity will be reduced by 5 percent for every year (5/12 percent per month) you are under age 62.

Note: FERS special category employees, such as law enforcement officers, firefighters and air traffic controllers, may retire at age 50 with 20 years of covered service or at any age with 25.

Immediate retirement means that you have the age and service needed to retire on an immediate, unreduced annuity. Once you have that combination, you can retire whenever you want to. You can take early retirement, if your agency is offering that opportunity through a Voluntary Early Retirement Authority and/or a Voluntary Separation Incentive Payment. It’s also an option — called discontinued service retirement — if you are being separated through a reduction-in-force or for poor performance. A deferred retirement is one where you leave government before being eligible to retire and apply for an annuity when you meet the eligibility requirements.

FERS credit rules

Figuring out your age is simple. Figuring your length of service can be harder, unless your career has been continuous, with no breaks in service or any service credit to be added or deducted. However, for those whose career is made up of bits and pieces, you need to know what kinds of service can be included.

If you are covered by FERS, you’ll get credit for any FERS service for which deductions were taken and not refunded. As for service where you left government and asked for a refund of your contributions, for 20 years FERS employees were barred from recapturing that service if they came back to work for the government. All that changed with Public Law 111-84. Now any FERS employee who retires on or after Oct.28, 2009, can redeposit that money, plus interest, and get full credit for it.

You’ll also get credit for nondeduction service performed before Jan.1, 1989, if you’ve made a deposit for that service. And you’ll get credit for periods of military service performed before Jan.1, 1957. You’ll also get credit for periods of service performed after Dec. 31, 1956, but only if you make a deposit for that post-1956 time. And, if you are receiving military retired pay, you’ll probably have to waive it to get any credit.

Finally, if you transferred to FERS from CSRS and had at least five years of CSRS service, you’ll have a CSRS component in your annuity, unless you got a refund of your retirement contributions. If you did, you can still make a deposit and get credit for that time.

Computing your length of service

Your annuity will be based on your total years and months of creditable service. Any days that don’t add up to a full month will be converted to hours and added to any hours of unused sick leave you have to your credit. If you have enough of those hours, they’ll be converted to months and used in the computation of your annuity.

The method for converting those hours to months needs an explanation. Here’s how it’s done:

In order to produce 12 equal annuity payments, each month is treated as if it was 30 days long. To convert those leftover hours into additional retirement months, the number of hours in a work year — 2,087 — are divided by 360 (12 months x 30 days).

As a result, each additional month is roughly 174 hours long.

Reg Jones was head of retirement and insurance programs at the Office of Personnel Management. Email your retirement-related questions to fedexperts@federaltimes.com, and view his blog at blogs.federaltimes.com/ federal-retirement.

Medical disqualification

Bookmark and Share

Q. I will be 52 and have 29 years of technician service (32 years National Guard) under FERS. If I was diagnosed with a medical condition that ended my military career, would I be eligible for the non-reduced pension/Social
Security Offset/ and access to my TSP, since I have 25 years, I am age 50 and would be losing my military position through no fault of my own? Read the rest of this entry »

Tags: ,

FAA pension

Bookmark and Share

Q. I worked for the FAA from June 1969 and left after I married to raise my family in September 1975. I will be 62 in September. Am I eligible  for any FAA pension?

A. If you left your retirement contributions in the retirement fund when you left, you’d be entitled to an annuity at age 62. To get that benefit, go to http://www.opm.gov/forms/pdf_fill/opm1496a.pdf, download a copy of the form, fill it out, and send it to OPM.

Tags: ,

Deferred retirement

Bookmark and Share

Q. I’m a federal law enforcement officer with 16 years covered and three years federal service not covered. If I decide to take a deferred retirement will I still get the enhanced 1.7 x the number of years x my high three and 1 x the number of non-law enforcement years X my high-3? I also bought back 13 years of military service. How will those years be added? Read the rest of this entry »

Tags: ,

FERS rate following transfer

Bookmark and Share

Q. I was hired at the Defense Department in October 2012, and thus I contributed .8 percent of my pay to FERS. I transferred to VA in April 2014 with no break in service and now have 3.1 percent of my pay deducted, and I am told that it is increasing to 4.4 percent of my pay, as this rate applies to new hires after January 2014. Is it correct that I should be treated as a new hire, despite in all other areas being treated as a transfer (leave carried forward, no ability to change benefits until open season)? I checked and my SF-50 reflects the correct service computation date from 2012. My HR representative has informed me that I will be in the 4.4 percent group when I questioned why I was already paying the 3.1 percent. Read the rest of this entry »

Tags: ,

Creditable service

Bookmark and Share

Q. I enlisted in the Marine Corps in 1984 and retired in 2004 with 20 years of service. In March 2006, I was hired as a Defense Department civilian and have been so to date. I completed my deposit for Military Service Credit in 2011 and have my letter for “paid In full.” I would like to retire at MRA 56 years, four months (1966). Does my time in service (military), if combined at retirement, override the minimum years of creditable service, therefore foregoing the penalty for retiring under age 60. My understanding is that you need MRA plus 30 years service to avoid a penalty. I would have 20 years military service and 16.5 years civil service. I might stay longer, but wanted to know my options. Read the rest of this entry »

Tags: ,

Phased Retirement

Bookmark and Share

Q. How does WEP work under Phased Retirement?

A. Just the way it always does. If the individual retires before age 62, his Social Security benefit is reduced if he has fewer than 30 years of substantial earnings under Social Security. If he retires at or after age 62, the reduction occurs when he retires.

Tags:

Minimum retirement age

Bookmark and Share

Q. My wife will be 50 in three years and will have 30 years of federal service under FERS. Can she retire with no penalty and keep her federal health benefits.

A. No, she cannot retire on an immediate annuity. The earliest she could do that would be when she reaches her minimum retirement age, which in her case would be 56 years and 6 months. The only way she could retire earlier than her MRA would be if her agency offered her an opportunity under the Voluntary Early Retirement Authority and she was at least age 50.

Tags: ,

Discontinued service retirement

Bookmark and Share

Q. I have 25 years and three months as a FERS employee. If my agency separated me due to poor job performance, would I be eligible for a discontinued service retirement ?

A. Yes.

Tags:

Retirement date

Bookmark and Share

Q. I am a CSRS employee. If I retire on Friday, Oct. 31, will I accrue my annual leave for that pay period? I will have worked the 80 hours, but technically the end of the pay period is Saturday, Nov. 1.

A. You may retire at the end of the day on Friday, Oct. 31, be on the annuity roll the following day, and get credit for the annual and sick leave you earned during that pay period.

Tags: ,

CSRS eligibility

Bookmark and Share

Q. I worked for the post office from 1980 to 1990 and then quit to attend grad school. Although I’ve since become successful, immediately after grad school I needed money and so withdrew it from my CSRS account. Will I be eligible to go back on CSRS if I return to federal service? Read the rest of this entry »

Tags: , ,

Military retired pay, FERS, VA disability

Bookmark and Share

Q. I retired from the military with a 40-percent VA disability. I am now a government employee under FERS. If I buy back my military time and then retire under FERS, will I still receive my VA disability payments and, if so, will the VA payments be deducted from my FERS retirement in the same way as they are deducted from my military retirement today?

A. While you would have to waive your military retired pay when you retire from your civilian position, you wouldn’t have to waive your VA disability payments. They would have no affect on your FERS annuity.

Tags: , ,

FERS retirement

Bookmark and Share

Q. My USPS retirement eligibility date is Dec. 30 (56th birthday).  My annuity projection shows about a $10,000 difference if retiring Dec. 30 vs. April 15 next year, which would be exactly 30 years.  Is this  correct?

A. If you retired at your MRA but with fewer than 30 years of service, you’d be retiring under the MRA+10 provision, which would reduce your annuity by 5 percent for every year you were under age 62. To avoid that hit, you’ll need to wait until you have 30 years of service to retire.

Tags: , , ,

CSRS or FERS

Bookmark and Share

Q. I had 10 years of employment covered under CSRS, then resigned. I came back in 2007 under FERS. I also have two years, five months and 21 days military service. Would it be to my benefit to change to CSRS offset. I plan on retiring May 2015 when I will be 62 with 20 years of service.

A. You can’t change your coverage now. You are a FERS employee who will have a CSRS component in his annuity. If your active-duty service was performed before you first became a federal employee (or while you were covered by CSRS), you could make a deposit and get credit for that time in your CSRS component. If it was between the time you left and were covered by FERS (or while you were covered by FERS), it would apply to your FERS component.

Tags: , ,

Retirement options

Bookmark and Share

Q. I am a GS-1811 Special Agent with four years until my FERS retirement in 2018 at age 62 (I was “grandfathered in” at age 42). And I have also bought back 12 years of military service time. I failed a PIP due to my ADD/ADHD & depression, and I was recently served with a Notice of Proposed Removal as an 1811. I am in a 3-agent office, four hours away from our Resident Office, and there are no non-1811 jobs available to me in my office’s area. Because I am considered disabled per the ADA guidelines, and the NOPR says I cannot perform well enough as an 1811, are there some sort of retirement options available to me for which I qualify (e.g. medical, disability, Discontinued Service, etc.)? Read the rest of this entry »

Tags: ,

When can I retire, part one

Bookmark and Share

It’s that time of year, when employees start thinking hard about retiring. If you are one of them, you need to know the two factors that determine if you’ll be able to do that. The first is age. The second is years of service. In this column I’ll go over the rules for Civil Service Retirement System, and in the next one, Federal Employees Retirement System.

CSRS requirements:

Immediate retirement

  • Age 62, five years of service.
  • Age 60, 20 years of service.
  • Age 55, 30 years of service.

Early retirement

  • Age 50, 20 years of service.
  • Any age, 25 years of service.

Deferred retirement

  • Age 62, five years of service.
  • Age 60, 20 years of service.

Immediate retirement means that you have the age and service needed to retire on an immediate annuity. Once you’ve got that combination, you can retire whenever you feel like it. Early retirement is an option, if your agency is offering you that opportunity through the Voluntary Early Retirement Authority and/or a Voluntary Separation Incentive Payment. It’s also an option if you are being separated through reduction-in-force or for poor performance. A deferred retirement is one where you leave government before being eligible to retire and apply for an annuity when you meet the eligibility requirements.
Service credit rules
Under CSRS, creditable service includes any service for which retirement deductions were taken from your pay and not refunded. With one exception, if it was refunded, the time will be creditable as long as you repaid the refund. Here’s the exception: If you got a refund for service performed before Oct. 1, 1990, and didn’t make a redeposit, it will still be used in determining your length of service; however, your annuity will be reduced actuarially based on your age at retirement and the amount you owe.
You’ll also get service credit for any period of civilian employment where retirement deductions weren’t taken from your pay, but only if it was performed before Oct.1, 1982. If it was performed on or after that date, you’ll only get credit for the time in your annuity computation if you make a deposit. If you don’t, your annuity will be actuarially reduced based on the amount you owe, plus accrued interest.
If you were on active duty in the armed services before Jan. 1, 1957, you’ll get full credit for that time. If it was performed after Dec. 31, 1956, and you were first hired before Oct. 1, 1982, you’ll also get credit for it; however, if you are retired and eligible for Social Security at age 62 and haven’t made a deposit for that time, those years will be deducted and your annuity reduced. If you retire on or after age 62, haven’t made a deposit, and are eligible for a Social Security benefit, the reduction will be made when you retire.
If you were first employed on or after Oct.1, 1982, you’ll have to make a deposit in order to get credit for that time. If you are receiving military retired pay, you’ll usually have to make a deposit for that time and waive that pay before retirement in order to get credit for it. On the other hand, if you are receiving reserve retired pay, you’ll still have to make a deposit to get credit for your active duty service, but you won’t have to waive your reserve retired pay.
Time in a nonpay status is also creditable if it doesn’t exceed six months during any calendar year.
Once you have enough years of creditable service to retire, any unused sick leave will be added.
Computing your length of service
Your length of service is based on all the years you’ve worked, plus any full months that don’t add up to a year. Any days that don’t add up to a full month are converted to hours and added to unused sick leave. If you have enough of those hours to create one or more months, they’ll be used to compute your annuity.
So what are “enough hours”? In order to produce 12 equal annuity payments, each month is treated as if it was 30 days long. To convert those leftover hours into additional retirement months, 2,087 (the number of hours in a work year) is divided by 360. As a result, each additional month is roughly 174 hours long.

Reg Jones was head of retirement and insurance programs at the Office of Personnel Management. Email your retirement-related questions to fedexperts@federaltimes.com, and view his blog at blogs.federaltimes.com/ federal-retirement.

FERS or CSRS

Bookmark and Share

Q. I’m under FERS, and my service computation date is Nov. 26, 1983. A co-worker in my organization has a SCD of Nov. 7, 1983, and is under CSRS. What is the SCD cutoff date for FERS vs. CSRS?

A. As a rule, employees who were first hired before Dec. 31, 1983, are covered by CSRS. To review that requirement and other details which might affect your situation, go to www.opm.gov/retirement-services/publications-forms/csrsfers-handbook/c010.pdf. If you meet the qualifications to be covered by CSRS, you’ll need to go to your personnel office and ask them to help you process your claim under the Federal Erroneous Retirement Coverage Corrections Act.

Tags: ,

Early retirement

Bookmark and Share

Q. I have 18 years of service and I am 51 years old. Can I do an early retirement and receive Social Security and pension?

A. No. If your agency was offering early retirement, you would have to meet one of the following age and service requirements: age 50 with 20 years of service or at any age with 25. You don’t meet either requirement.

Tags: ,