By Reg Jones
Elimination of FERS supplement
February 22nd, 2012 | Early retirement
Q: The congressional supercommittee proposed eliminating the FERS supplement. The committee failed to reach agreement, but I can’t help but think these proposals will surface again. Had they been successful, would this elimination have applied to all employees retiring under FERS after enaction of their proposals? Or would it only have applied to new hires with less than five years of service? What if an employee retired under early out provisions before enaction? I’m 53 with 30 years of service and won’t be eligible for the FERS supplement until October of 2014. If the proposed action would have passed or has potential to pass in the future, do you know if I would be affected, or would still be eligible for the supplement if I took the early out before it’s enacted?
A: You want what you can’t have, a prediction of future events. You’ll just have to wait to see what changes, if any, occur and, if they do, how they will be applied.
Tags: FERS
CSRS and break in service
February 16th, 2012 | Early retirement
Q: 1. Early retirement at age 51 and 23 years of service — If RIF, what will be offered to me for my retirement plan? 2. CSRS versus FERS — started with government on May 8, 1985; I started with CSRS and my agency changed me to FERS, because I was informed I should have been hired with FERS. 3. Quit government — Oct. 1, 2010, through April 7, 2011; worked as a contractor. How many years and months of service should I have reflected on my OFP records? 4. Promoted to GS-13-5 in 2009 — when should I expect another step increase?
A: When you entered the government in 1985, you were placed in an interim system – CSRS and Social Security. When FERS became effective Jan. 1, 1987, you were automatically transferred to FERS because you had fewer than 5 years of CSRS-covered service. Since you are a FERS employee, if you were eligible for early retirement, your annuity would be calculated using the following formula: 0.01 x your high-3 x your total years and full months of service. (If you didn’t receive a refund of your retirement contributions when you left government, you would receive credit for all the time you’ve worked for the government. If you took a refund, you wouldn’t get any credit for that time unless you repaid the amount, plus accrued interest.) As an early retiree, you wouldn’t be subject to the age age penalty for being under age 62. You would be eligible for the special retirement supplement when you reach your minimum retirement age, which in your case would be 56. Since you were placed in step 5 of your grade, assuming satisfactory performance, your next step increase would be due after 104 weeks.
Tags: CSRS, SOCIAL SECURITY
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.
Retirement at age 50?
January 31st, 2012 | Early retirement RETIREMENT
Q. I’ve been with the Postal Service for 22 years and am 49 years old. I’ve started a new career. Can I retire next year at age 50? Will I be eligible for any retirement money?
A. No, you cannot retire at age 50. In fact, the earliest you would be able to retire is when you reach your minimum retirement age, which is 56. Even then you would be retiring under the MRA+10 provision (minimum retirement age with at least 10 but fewer than 30 years of service). At retirement, your annuity would be reduced by 5 percent for every year (5/12 percent per month) you were under age 62. The only way to reduce or avoid the reduction would be to retire and postpone the receipt of your annuity until a later date.
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.
Early out or disability retirement?
January 24th, 2012 | Disability retirement Early retirement RETIREMENT
Q. I am currently off work and getting compensation from the Office of Workers’ Compensation Programs. If the Postal Service offers early retirement, can I take the offer and retire while on workers’ comp? I am 52, and have more than 30 years of service. I have applied for disability retirement, but if an early out is offered, I would rather go that route instead, if possible.
A. I’m not aware of any bar to your accepting an offer of early retirement.
Medical retirement from Army
January 20th, 2012 | Early retirement RETIREMENT
Q. I have been an Army reservist for 18 years, with two overseas deployments. I am in the middle of a Medical Evaluation Board. If the Army forces me to retire due to medical reasons, will I start drawing retirement right away or would I still have to wait until age 60.
A. Since you have at least 18 months of creditable civilian service, if you are disqualified for military duty, you would be eligible for disability retirement benefits. For more information, go to http://www.opm.gov/retire/pubs/handbook/C046.pdf and scroll down to Section 46B4.1-2.
One year makes all the difference
January 16th, 2012 | Coverage after retirement Early retirement
Q. I am a FERS employee with 24 years of service; I am 49. I started at the IRS in May 1987, and my birthday is in October 1962. My agency may offer an early out very shortly. However, it appears I miss the 20 years/age 50 or the 25 years/any age requirement by less than one year. Is there any way I can take the early out if offered and pay the 5-percent penalty in order to qualify for the early out, and get an immediate annuity? If yes, would I still get my health insurance? Or am I totally out of luck at this time?
A: You are totally out of luck. Because you will have fewer than 20 years of service, you aren’t eligible for early retirement.
Early retirement penalty
December 22nd, 2011 | Early retirement
Q: I am 55 and I have 25 years of creditable service. I am in CSRS Offset. What would be the penalty if I chose to retire now?
Tags: CSRS offset
Taking early retirement
December 22nd, 2011 | Early retirement
Q: I will be 55 next year and have 17 years in service. I would like to know about early retirement and how to go about it.
A: Early retirement opportunities are offered by an agency to meet its needs, There isn’t anything you can do to cause an agency to offer you one. However, all that is academic. You don’t have the age and service needed to take early retirement: age 50 with 20 years of service or any age with 25. Further, you aren’t yet eligible to retire under the MRA+10 provision (minimum retirement age with at least 10 years of service) because your MRA is 56. Even if you decide to retire under that provision when you reach 56, you need to be aware that your annuity would be reduced by 5 percent for every year you were under age 62.
Tags: MRA