By Reg Jones
No refund for military deposit
February 1st, 2012 | Creditable service: CSRS CSRS annuity computation RETIREMENT SOCIAL SECURITY
Q. I am 61 years old and in the Civil Service Retirement System. I have paid back my military deposit, and don’t have enough quarters/credits under Social Security to qualify. I am anticipating retiring when I am 62-plus, and don’t plan on working to earn quarters/credits under Social Security. I have heard that I can request a refund of my military deposit after I retire; is this correct? If so, who handles that request?
A. You were misinformed. You can’t get a refund of the deposit you made for your active-duty service. What’s done is done. If you retire at age 62 and aren’t eligible for a Social Security benefit at that time, you’ll never have to worry about losing those years and having your annuity recomputed. OPM only checks once with the Social Security Administration: at age 62, if you are already retired or when you retire, if it’s after you reach age 62. Note: The “no refund” rule doesn’t apply to employees who resign from the government and ask for a refund of all their retirement contributions or to those who have retired from active duty, make a deposit to get credit for that time, and, at retirement, decide not to waive their military retired pay.
Annuity contribution limit for CSRS employees
February 1st, 2012 | Creditable service: CSRS CSRS annuity computation RETIREMENT Sick leave
Q. I’m told employees stop getting the government contribution to their retirement at 41 years, 1 month, of service, but can get a lump sum when they retire. This doesn’t quite make sense to me. Is there any other option? I will reach this much service time in February 2012. I am age 67, in the Civil Service Retirement System, and plan on continuing to work.
A. Here’s the story. When a CSRS-covered employee has worked for 41 years and 11 months, he’s earned the maximum annuity based on actual service that’s allowed under law: 80 percent of his high-3. Although retirement deductions continue to be taken from his pay, they will be returned to him, with interest, and he will have the option of accepting the payment or using it to buy additional annuity that isn’t subject to the 80 percent limit. Note: Credit for unused sick leave also isn’t subject to the 80 percent limit.
Penalties for early retirement
January 31st, 2012 | Creditable service: CSRS Creditable service: FERS CSRS annuity computation Early retirement FERS annuity computation RETIREMENT
Q. I have a question about early outs. I am 53 and have 25 years of Federal Employees Retirement System service. If an offer is made in 2012, will I be penalized for the number of years I am under age 62? Reading the past posts, I am confused. Also, are health benefits based on the non-postal rate for federal employees? Is unused sick leave added to the annuity or years of service in the coming year?
A. Retiring CSRS employees are penalized for being under regular retirement age; retiring FERS employees aren’t. The premium rates for retired Postal Service employees are the same as those for all other employees and retirees. The lower premium rate for Postal Service employees is the result of union contract negotiations, which don’t carry over into retirement. FERS employees retiring before Jan. 1, 2014, will only get half credit for their unused sick leave; after that, they’ll get full credit.
How would VERA/VSIP affect retirement pay?
January 31st, 2012 | Creditable service: CSRS Creditable service: FERS CSRS annuity computation Early retirement RETIREMENT Special retirement supplement
Q. I am a Civil Service Retirement System/Federal Employees Retirement System offset employee with 31 years of service, and I have been offered Voluntary Early Retirement Authority and Voluntary Separation Incentive Payments (VERA/VSIP). I would like to know how a VERA/VSIP would affect my retirement. I have been depositing the maximum in my TSP account, and I see that the government is not required to match it. Does government matching or not matching my deposit depend on the agency I work for?
A. To estimate what your annuity would be, use the formulas for each retirement system:
FERS: 0.01 x your three highest consecutive years of average salary (your high-3) x all years and full months of FERS service.
CSRS: 0.015 x your high-3 x 5 years of CSRS service, plus 0.0175 x your high-3 x 5 years of CSRS service, plus
0.02 x your high-3 x all remaining years and full months of CSRS service.
Unused sick leave that doesn’t exceed the amount you had to your credit when you transferred to FERS will be added to your CSRS service. If you retire before 2013, half of any remaining hours will be added to your FERS service. In both cases, hours that don’t add up to a month (approximately 174 hours) will be dropped.
As a FERS employee, if you retire before age 62, you will be entitled to the special retirement supplement, which is approximately the amount of Social Security benefit earned while you were a FERS employee. Here’s the formula: Social Security benefit estimate provided by the Social Security Administration x total years of FERS service rounded up to the next higher year divided by 40.
The basic rules on the amount of a Voluntary Separation Incentive Payment are as follows: An amount equal to the severance pay you would be entitled to, without an adjustment for any previous payments made or an amount determined by the head of your agency, not to exceed $25,000. Only your agency can tell you if you’re eligible for a VSIP and, if so, in what amount.
Not exempt from CSRS reduction
January 26th, 2012 | Creditable service: CSRS CSRS annuity computation RETIREMENT
Q. Does the reduced annuity under age 55 apply to Civil Service Retirement System law enforcement officers who opt to take the Voluntary Early Retirement Authority and Voluntary Separation Incentive Payments (VERA/VISP)? Or is the CSRS law enforcement category exempt from this reduction?
A. Assuming that you aren’t talking about retiring as a CSRS law enforcement officer, the law enforcement category isn’t exempt. The 2 percent reduction for being under age 55 would apply. On the other hand, if you are talking about a CSRS law enforcement officer who retires under the special age and service criteria – age 50 with 20 years of service - then he wouldn’t be retiring early and the reduction for being under age 55 wouldn’t apply. Accepting a VSIP wouldn’t change the picture in either case.
Provision stops wife from receiving husband’s Social Security benefits
January 26th, 2012 | Benefits Creditable service: CSRS CSRS annuity computation Government pension offset SOCIAL SECURITY
Q. I am 57 and a retired federal worker. I retired under the Civil Service Retirement System at the GS-13 level. I only worked a total of about three months before my federal service paying into Social Security, so I am not eligible for any Social Security benefits for myself. However, my husband, who is 60, has worked since he was 19, and has been paying into the Social Security system since then. My understanding is that I am not eligible to receive any of his Social Security benefits because my civil service pension is too high. My question: Is this still true if he dies before me and I become a widow? Will I then be able to receive some of his Social Security benefits?
A. No. The government pension offset provision of law would reduce either benefit by $2 for every $3 you receive in your CSRS annuity.
Leave cash-in value depends on personal decision
January 26th, 2012 | Creditable service: CSRS CSRS annuity computation LEAVE RETIREMENT
Q. I will be retiring this year (2012), with 30.3 years as a Civil Service Retirement System employee. The leave year ends on Jan. 12, 2013. If I waited until then to retire to maximize my leave cash-in value, my annuity wouldn’t start until February 2013, but if I retired on Dec. 31, 2012, my annuity would start in January 2013. However, I would not maximize my leave cash-in value. Is this correct?
A. If you retired on Dec. 31, you would receive a lump-sum leave payment for all the annual leave you had accumulated up to that point. If you are a non-Postal Service employee who retired at the end of the following pay period, you would only receive a lump-sum payment for the maximum hours that could be carried over into the next leave year, which for most employees is 240 hours. However, if you are a Postal Service employee, your leave year doesn’t end until two weeks after that, not on January 12, which is a Thursday. Therefore, you would have a trade-off to consider: Receive a lump-sum payment that includes one more pay period’s worth of annual leave and lose one month’s annuity, or lose one pay period’s worth of annual leave and be on the annuity roll in January. It’s up to you.
Benefits, CSRS Offset and WEP
January 25th, 2012 | Creditable service: CSRS CSRS annuity computation SOCIAL SECURITY Windfall elimination provision
Q. I’m a Civil Service Retirement System Offset employee with 18 years, 6½ months, under straight CSRS; 12 years, 7 months, at retirement (April 30, 2012); and with at least 40 quarters earned under Social Security before federal service. I had an appointment the other day at the Social Security Administration to see what my benefits, offset amount and windfall amounts would be. The person who I talked to had no idea about the CSRS Offset and kept calling the windfall elimination provision (WEP) an offset. She insisted she never had to consider/calculate the offset amount for the Office of Personnel Management, and that OPM would do the calculations and she just had to do the WEP calculations.
My first question: At the time of retirement, does OPM notify a Social Security office where there are people who have dealt with CSRS Offset and WEP and will calculate my benefits properly and correctly?
My second question: What figures and formula do I use to figure out my benefit amount at 64, my offset amount and the WEP amount?
My third question: My full retirement age is 66; retiring at 64 will reduce my full retirement benefit. The offset amount is calculated against the total amount I’m due at 64; that amount reduces the CSRS annuity, not the Social Security amount, and the combination of the two amounts will total the same as the original CSRS benefit. Is the WEP also calculated against the amount I’m due at 64?
A. For a primer on CSRS Offset and how and why your annuity would be offset, read OPM’s Retirement Fact 13 at http://www.opm/forms/pdfimage/RI83-19.pdf. For the full story on how the offset will be calculated, go to http://www.opm.gov/retire/pubs/handbook/C050.pdf and scroll down to Section 50A3.1.1-4.
For a primer on the WEP and how and why your annuity might be affected, read the Social Security Administration’s WEP Fact Sheet at http://www.socialsecurity.gov/pubs/10045.html. Then use the calculator at http://www.socialsecurity.gov/retire2/andPiaWepjs04.htm to determine what effect the WEP would have on your Social Security benefit.
Postal Service retirement
January 20th, 2012 | Creditable service: CSRS Creditable service: FERS CSRS annuity computation RETIREMENT
Q. I am a Postal Service carrier in the Federal Employees Retirement System, but with a Civil Service Retirement System component. Before I became a career CSRS employee, I had 3 years as a sub (from 1980 to 1983), for which I have made a deposit. My question is: Is that time covered under CSRS or FERS? I was told by a retirement specialist that it is considered FERS time, which is reflected on my current annuity estimate. An older estimate gave me credit under the CSRS. I am planning on retiring soon and would like to be sure that the Postal Service has my correct service time. (I switched to FERS in 1999, if that information is helpful).
A. That period of service which preceded your becoming a CSRS employee, and for which you made a deposit, will be credited to the CSRS component of your annuity.
Retirement benefits depend on retirement system
January 18th, 2012 | Creditable service: CSRS Creditable service: FERS CSRS annuity computation FERS annuity computation Government pension offset RETIREMENT SOCIAL SECURITY Windfall elimination provision
Q. My wife started working under the Civil Service Retirement System in July 1982 and continued to work under CSRS until August 1989. She is re-entering the government workforce. She plans to stop working in eight years when she will be 57, and will have 15 years of government service. It appears she would be eligible for deferred retirement benefits at age 62. How will her benefits be calculated?
A: It all depends. When she returns to work for the federal government, she’ll be covered by CSRS Offset (CSRS and Social Security), with the option of transferring to the Federal Employees Retirement System (FERS and Social Security). If she stays in CSRS Offset, her entire annuity will be calculated under the CSRS formula. When she applies for deferred annuity at age 62, her CSRS annuity would be offset by the amount of Social Security benefit she earned while covered by CSRS Offset. The dollar value would be the same but the money would come from two different sources. If she transferred to FERS when she applied for a deferred annuity at age 62, her CSRS time would be calculated under the CSRS formula and her FERS time under the FERS formula. Note: Because in both cases, she would be receiving part of her annuity from CSRS, a retirement system where she didn’t pay Social Security taxes, her Social Security benefit would be subject to the windfall elimination provision. The WEP reduces the Social Security benefit of anyone who doesn’t have at least 30 years of coverage under Social Security.