By Reg Jones
No buyback
February 20th, 2012 | FERS annuity computation
Q: I work for the government under FERS. I retired from the military after 20 years, but did not buy back my time for retiring from the federal government. I am a GS13 and will be 62 next year and will also have 10 years working for the federal government. Will I get some sort of retirement? Will I be allowed to draw a retirement from the the federal government and also continue to draw my military retirement pay?
A: To be eligible for a FERS annuity at age 62, you would only need to work for five years. If you retire at that age with 10 years, your annuity would be calculated using this formula: 0.01 x your high-3 x 10 years. Because you haven’t combined your active-duty military service with your civilian service, you’ll be able to receive both benefits, with no reduction in either.
Tags: FERS, military service
Temporary appointment poses annuity question
February 3rd, 2012 | Creditable service: FERS FERS annuity computation RETIREMENT
Q. I have 27 years of service, but two years of that is credited to me for a temporary appointment I had from 1980 to 1982. I’m under the Federal Employees Retirement System and my EOD is 1984. How will this affect my retirement, and should I or can I buy back those two years?
A. For service before Oct. 1, 1982, you have a choice. If you make a deposit for that time, plus accrued interest, it will be used in the computation of your annuity. If you don’t, your annuity will be reduced by 10 percent of the amount you owe, plus accrued interest. For any period of non-deduction service on or after Oct. 1, 1982, you have to make a deposit for that time to be used in your annuity computation.
Can military time count as creditable service?
February 1st, 2012 | Creditable service: FERS FERS annuity computation RETIREMENT
Q. My question is regarding federal pensions. I know you must complete five years of federal service to be vested in the federal government’s pension program, and three years to be vested in the Thrift Savings Plan. According to the Federal Employees Retirement System handbook, military years bought back are treated as creditable years of civilian service, and therefore would count toward retirement. Does that mean if you only had three years of federal service and bought back seven years of military time, you would have 10 years of creditable service? If I leave the federal government after this year, prior to serving five actual years of civilian employment, am I already vested for the pension (reduced)? I have already bought back my military time.
A. To be vested, you must have five years of actual FERS service. Active-duty service for which you’ve made a deposit cannot be used to meet that requirement.
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.
Paying for survivor annuity
January 25th, 2012 | FERS annuity computation RETIREMENT Survivor annuities
Q. I am not married, and will retire under the Federal Employees Retirement System. After I retire, if I then get married, can I then elect survivor annuity? If so, what is required to make the election?
A. Yes, you can, as long as you do that within two years after the date of your marriage. To pay for the survivor annuity, there will be two reductions in your annuity. The first will be the standard reduction to provide for the survivor benefit. The second will be an actuarial reduction to pay the survivor benefit deposit. That deposit equals the difference between the new annuity rate and the annuity paid to you for each month since you retired, plus 6 percent interest. The first reduction will be eliminated if the marriage ends in the death of your spouse or divorce; the second reduction is permanent.
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.
What is my high-3 based on?
January 18th, 2012 | Creditable service: FERS FERS annuity computation RETIREMENT
Q. I am a GS-14 Step 6 Federal Employees Retirement System law enforcement employee with 3 1/2 years to go to before I’m eligible to retire. With locality pay and availability pay, I am capped and have about $133 per pay period withheld from my paycheck. My question is, what is being used to calculate my high-3? The
money I should have been paid or what I am actually paid?
A. Your high-3 will be based of what you actually received, which is the amount from which retirement deductions were taken.
OPM pays SRS for certain employees
January 16th, 2012 | FERS annuity computation SOCIAL SECURITY Special retirement supplement
Q. I am a 57-year-old Federal Employees Retirement System employee eligible for retirement. I am also a widow. Can I retire and receive the special retirement supplement until age 60, then take the Social Security widow’s benefit — which would be greater than my SRS — and keep that until I reach full retirement age at 66? Could I also delay retirement until age 60, bypass SRS and take the widow’s benefit?
A. Relax. The Office of Personnel Management automatically pays the special retirement supplement until age 62 to FERS employees who retire on an immediate, unreduced annuity. The SRS is only reduced or eliminated if the retiree has earnings from wages or self-employment that exceed the annual Social Security earnings limit. Social Security survivor benefits aren’t considered to be earnings.
FERS formula trumps law enforcement system
January 16th, 2012 | Creditable service: FERS FERS annuity computation Uncategorized
Q. I’m 52 years old. I bought back my active-duty time while I was working at a federal prison. This gave me 15 years with the federal prison. I am now working in a non-law enforcement job at the Veterans Administration and have five years with the VA system, which gives me 20 years’ service in total. I know that I will retire with 20 years in the Federal Employees Retirement System, but my question is, will I get the credit for the law enforcement retirement, which is at 56, or the regular FERS retirement at age 60?
A. The earliest you could retire on an immediate, unreduced annuity is age 62. When you do retire, your annuity will be computed using the standard FERS formula. Only law enforcement officers with at least 20 years of covered service have their annuities computed using the more generous formula.
Change in locality pay
December 21st, 2011 | FERS annuity computation
Q: I am a 62-year-old FERS employee. I am in a 27 percent locality pay area and have been for many years. There is discussion at my base about transferring our work to another base that has a much lower locality pay. I heard that if I transfer to the other base and then retire, my FERS annuity high-3 would be based on the lower locality pay. Since my pay is topped out, locality pay is the only thing that will change much. Is this “lower” high-3 calculation correct?
A: Your annuity will be based on your highest three consecutive years of average pay, regardless of when they occur in your career.
Tags: FERS, locality pay