Ask The Experts: Retirement

By Reg Jones

Retirement penalty?

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Q. I am FERS employee. I am 60 and this September I will have 29 years of service. Will I be penalized if I retire before I turn 62 and with only 29 years?

A. No, you won’t. You can receive an immediate, unreduced annuity at age 60 with as few as 20 years of service.

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CSRS Offset

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Q. I started with the federal government on Aug. 18, 1986. I was recently reviewing my personnel records and noticed that from that day until Dec. 31, 1986, my retirement plan was listed on my SF-50 as CSRS Offset. Then on Jan. 1, 1987, it was changed to FERS. Were individuals who entered federal employment on Aug. 18, 1986, automatically changed to FERS the following January, or were employees given the choice to choose between CSRS Offset and FERS? Read the rest of this entry »

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Benefits for ex-spouse

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Q. My divorce decree doesn’t mention retirement. We made no claim for each other’s retirement nor did we waive any rights. It just wasn’t mentioned. Can my ex-spouse claim any of my FERS retirement benefits? If so, would it only be half of what I put in during our marriage? Read the rest of this entry »

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FERS annuity

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Q. I have 20 years of federal service, am 52 years old and currently work for a Federally Funded Research and Development Center. When I separated from federal employment, I was told I have an annuity based on my employment years (contributions made).

A. Assuming that you didn’t get a refund of your retirement contributions when you left, you’d be entitled to a deferred annuity at age 60.

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Cumulative Retirement

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Q. Item 19 of the LES has “Cumulative Retirement” FERS:
What exactly does this number mean? Is it just a total amount in FERS, or something else? Monthly or yearly amount at retirement?

A. It tells you how much you’ve contributed to the retirement system.

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Re-employment after disability retirement

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Q. I was removed from my agency due to becoming “Medically Unqualified” after 4 years, 9 months under FERS and given disability retirement in 2007. I am considering returning to federal service with a job at the Defense Department. With the disability retirement, I understand that if I maintain the retirement until I am age 62, the time I was on disability retirement would count as time in service for computing my regular retirement. Does that mean the time I have been a disability annuitant will count as service time for a new federal job? Would I/could I buy back the time? I understand my annuity will cease on the date of re-employment. Read the rest of this entry »

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VSIP Amount Calculation

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Q. I received $19,100.00 severance pay in a RIF in 1996. In 2000 I was re-employed by the Federal Government. I am now considering a VSIP. What amount can I expect? I am 72 years old with 20 years of service. Read the rest of this entry »

Military buyback and re-enlisting

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Q. I have 13 years in the Air Force, all of which were on Active Duty. I separated honorably and bought back my time and now work for the Dept. of Veterans Affairs (FERS). I currently have 27 years of creditable service. If I were to re-enlist into the Air Force Reserves, would I be able to collect my military retirement after a 7-year enlistment completing 20 years of total military service, even though I bought back my 13 years of active duty time? Read the rest of this entry »

Sick leave into annual leave

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Q. I am a FERS employee with 32 years of service credit. I’m planning to retire on 6/30/14. I’m going to have around 480 hours of sick leave when I retire. Since you only get credit for a full month, I will lose around 130 hours. My HR person told me that I could get supervisor approval to change my sick leave to annual leave, not exceeding a total equal to the annual leave that I have on the books. I had never heard of that so I asked for specifics, which she couldn’t provide. Is it possible to convert sick leave to annual leave? If so, how do you do it? Read the rest of this entry »

Service credit and sick leave

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Q. I am a FERS employee with 32 years of service credit. I was in CSRS for 5 years, 10 months and 28 days. I left the government but came back 3 years later as a FERS employee. When I retire I will have 28 days of CSRS service credit and 25 days of FERS Service Credit. Will 7 days of my excess sick leave (56 hours) be applied to my remaining days of 23 to give me an extra month toward retirement?

Read the rest of this entry »

FERS postponed retirement

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Q. My wife just turned 57 and has a little more than 23 years of service. Her MRA is 56. I believe if she takes a postponed versus a deferred retirement, she will be eligible to get her full retirement annuity when she turns 60. What form should be filled out for a postponed retirement? I only see one for a deferred retirement.

A. The form you saw was for CSRS retirees only. When your wife applies for her postponed FERS retirement, she would need to fill out Retirement and Insurance Form RI 92-19. Deferred/Postponed Retirement FERS, available at www.opm.gov/forms/pdf_fill/ri92-19.pdf.

 

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‘Retire, FERS’ refund

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Q. My wife worked for the federal government from 2011 to 2012 and resigned in August 2012 due to medical reasons. During that two years of service, $222.07 was deducted from her pay for “Retire, FERS” and there were matching funds of $3281.31, so the total is $3503.30 for the “Retire, FERS.” Can my wife request that money be refunded?

A. If she doesn’t plan to return to federal service, she would only be entitled to a refund of her own retirement contributions. Doing so would cancel her entitlement to any future retirement benefit. However, if she got a refund and later returned to federal service, she could redeposit that money, plus accrued interest, to get credit for that period of service.

 

Special retirement eligibility

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Q. I am currently 43 years of age and I am a DoD firefighter with 20 years and 2 months of service under the FERS special retirement. I plan to move to another FERS position that is not covered under the FERS special retirement. I want to work in this position until I reach age 50. Since I have 20 years of service in the special retirement, could I still retire under special retirement once I reach age 50 even though I won’t be in a FERS special retirement position when I turn 50? Read the rest of this entry »

FERS Postal Service

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Q. I have 27 years in the Postal Service; my age is 56, and I am looking to retire soon. Am I eligible to retire with my full annuity? If not, how much would I be eligible for? Would I be eligible for early-out retirement if offered? Read the rest of this entry »

Calculating CSRS, FERS annuities

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In my last two columns I described the kinds of active duty service in the armed forces that are potentially creditable in your CSRS or FERS annuity, and what you have to do to get that credit. This time I’ll quickly go over the rules governing the computation of CSRS and FERS annuities for most federal employees. That way you’ll be able to see what the difference would be between a pure civilian annuity and one that includes credit for active duty service for which you’ve made a deposit.

Eligibility rules

Under CSRS, you can retire immediately if you are age 55 and have 30 years of service, 60 with 20 or 62 with 5. Under certain circumstances, you can retire at age 50 with 20 years of service or, if you have 25 years of service, at any age. However, your annuity will be reduced by 1/6 of a percent for each month you are under age 55. That’s 2 percent per year.

Under FERS, you can retire immediately at your minimum retirement age (MRA) with 30 years of service, 60 with 20 or 62 with 5, You can also retire at your MRA with at least 10 years of service but fewer than 30. However, if you retire under the MRA+10 provision and have fewer than 20 years of service, your annuity would be reduced by 5 percent for every year you were under age 62, age 60 if you had at least 20 years of service.

You could also retire early at age 50 with 20 years of service or, if you have 25 years of service, at any age. However, unlike CSRS retirees, there wouldn’t be any age penalty.

Note: To find out which kinds of active duty service in the armed forces are considered creditable and under what conditions, go to www.opm.gov/retirement-services/publications-forms/csrsfers-handbook/c022.pdf. To find out the same thing about civilian service, go to www.opm.gov/retirement-services/publications-forms/csrsfers-handbook/c020.pdf.

CSRS computation

Here’s how you compute a CSRS annuity:

*  1.5% x your high-3 x 5 years of service, plus
* 1.75% x your high-3 x 5 years of service, plus
* 2% x your high-3 x all remaining years and full months of service

This formula generates the basic annuity amount, which cannot exceed 80 percent of your average high-3 salary. However, unused sick leave is not included in that 80 percent limitation.

Two simple examples will illustrate the difference between making a deposit for four years of active duty service and not doing so. For simplicity’s sake, we’ll say your high-3 is $100,000 and you have 30 years of actual service.

* Without a deposit, your annuity would be $56,150.
* With a deposit, your annuity would be $64,250.

FERS computation

Here’s how to compute a FERS annuity:
.01 x your high-3 x all years of service
If you are age 62 and have at least 20 years of service, use this formula:
.011 x your high-3 x all years of service

Once again, some simple examples will illustrate the difference between making a deposit for four years of active duty service and not doing so. And I’ll use the same high-3 – $100,000 – and 30 years of actual service.

* Without a deposit, your annuity would be $30,000.
* With a deposit, your annuity would be $34,000.

If you were entitled to the .011 multiplier

* Without a deposit, your annuity would be $33,000.
* With a deposit, your annuity would be $37,400.

Note: Whether you are covered by CSRS or FERS, unused sick leave can’t be used to make you eligible for retirement. It can only be added to your years of service after you meet the age and service requirements.

The special retirement supplement

Because FERS is a retirement system that includes Social Security, if you retire before age 62, you’ll be entitled to the special retirement supplement, unless you are retiring under the MRA+10 provision.

The SRS approximates the amount of Social Security benefit you earned while a FERS employee. It doesn’t include periods of active duty service, whether or not you have made a deposit.

Using the FERS example above, if you are a FERS employee with 30 years of actual service and have made a deposit to get credit for your active duty service. That time will be included when determining your total years of service and used in your annuity computation. However only your actual service will be used in calculating your special retirement supplement. That’s because the SRS is paid out of the Civil Service Retirement and Disability Fund, not the Social Security Fund. However, when you apply for a Social Security benefit, it will be based on all your years of Social Security-covered employment.

A word about special category employees

Law enforcement officers, firefighters and air traffic controllers may retire at age 50 with 20 years of covered service. FERS employees may also retire at any age with 25 such years. All special category employees receive an enhanced benefit for which they pay by contributing more to the retirement system.

The rules for crediting are the generally the same for special category employees as they are for all other employees. However, there are a few variations on those rules. First, active duty service that precedes employment as a special category employee can’t be used to meet the years of service requirements for the enhanced benefit. Second, active duty service that interrupts a special category career is creditable toward the enhanced benefit, but only if the employee returns to a covered position and makes a deposit for that time.

Retire before reaching MRA?

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Q. I plan on retiring Dec.1, 2014, with 35 years of service under FERS. I reach my minimum retirement age on Dec.23, 2014. Will I be penalized in any way by leaving service 22 days before my MRA?  Read the rest of this entry »

No need to stop special retirement supplement

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Q. I am a retired federal law enforcement officer receiving a FERS supplement. I turned 62 on March 17, which means my FERS supplement should end. However, when I looked on the OPM website, I saw where the supplement will be included in my April pay. Do I have to initiate action to stop the supplement, or will it be done automatically ?

A. You don’t have to do anything. The special retirement supplement ends on the last day of the month in which a retiree turns age 62. Because annuity payments are made retroactively, your April payment was for the month of March.

Credit for military service in FERS retirement

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Q. I am a carrier with the USPS and recently paid back 14 years of active-duty military service toward my FERS retirement. I will be eligible for a Guard/reservist retirement at age 60. If I retire at age 62 from FERS and am applying the 14 years I bought back toward my annuity computation at that time, does it mean I have to waive my military retirement I will have been receiving since age 60? If so, to get two retirements I would only be using my Postal Service time for computation. Did I waste my time buying back the 14 years since I can only apply them toward one retirement? If this is true, can I still get the money back? Read the rest of this entry »

Creditable civilian service

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Q. I am 65 and have been working for federal government (FERS system) since June 7, 2010. I also bought back three years of military service during the first four months I was working for federal government. I have a service comp date of 6/14/2007.  I want to retire, but when I called the Army Benefits Center, they said that I needed five years of creditable civilian service and that the three years I bought back did not go toward the five-year creditable civilian service. The Office of Personnel Management and other areas state that Military buyback time goes toward creditable service towards FERS. Will my military buyback service of three years go toward the five-year requirement to receive immediate benefits?   Read the rest of this entry »

FERS and medical retirement

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Q. I am 67 years old and still working Civil Service with the Air Force. I was not planning on retiring anytime soon, but I fell at work, completely tore up my shoulder and will have to undergo reverse total shoulder replacement. I have been told this is a “career ender” and that I will be medically retired. I have been paying into FERS for 30+ years. I am drawing an allotment from the VA for Agent Orange diabetes mellitus. How do medical retirement and FERS and VA allotment work together? Read the rest of this entry »