Ask The Experts: Retirement

By Reg Jones

Credit for state service

Bookmark and Share

Q. I have been employed in New York and I’m under the NYS Employee Retirement System. Would any portion of my New York civil service time count as creditable service in the FERS system if I were to gain employment under the federal retirement system?

A. No, it would not.

Tags:

Military buyback

Bookmark and Share

Q. I am retired Army with 22 years and nine months being paid my monthly retirement check. I retired in May 2011. I started as a GS FERS employee in February 2013. I am in a target GS 12 position, which basically means that I will be a GS 12 in February 2017. I did the DFAS Payback estimator for military time and it stated that I would owe about $18,000. My monthly retirement check right now is about $2,200 a month. I know that I will have to waive that once I retire from civilian service in order to combine the civil service time and the military time. How much more in retirement would I get as a GS FERS employee, and is it worth the $18,000? I have heard that retirees don’t buy back their time because it is not worth it. I heard that this program is designed for the person who did any number of years but did not retire. Is that true? Do you know of retirees that buy back their time? Read the rest of this entry »

Tags: ,

Early out and offset waiver

Bookmark and Share

Q. I retired last year under FERS at age 56 with 28 years and seven months service. I took an early out. I would have had my full 30 years in January 2015. I applied as a rehired annuitant this month with the same agency and everything looked like I was going to be hired, but the manager called and said I didn’t qualify for the annuity offset waiver because I had taken an early out, and they were only allowed to hire those people who qualified for the waiver at this time. Is it true that if you take an early out, you do not qualify for the waiver?

A. Yes.

Tags: ,

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: ,

Re-employed annuitant benefits

Bookmark and Share

Q. I retired in January as a CSRS annuitant after 32 years of service with the Navy and Marine Corps. I am considering returning to the Navy as a re-employed annuitant. In accordance with DoD policy, I understand that I will be able to draw my full salary and my full annuity without a waiver from OPM. I believe Social Security taxes will be withheld, and I cannot make CSRS contributions if I draw both a pension and full salary. Will I be able to contribute to TSP? Will I accrue annual leave and sick leave? If so, how many hours of leave will I accrue? Will my FEHB premiums be withheld from my salary, or continue to be withheld from my annuity? Will I be able to have a FSA health savings plan? Read the rest of this entry »

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: ,

Federal vesting

Bookmark and Share

Q. I keep hearing that it takes five years to get vested in the federal government. However, no one seems to know what happens after five years of employment, and I keep hearing different stories.  Do you happen to know what happens at the five-year mark?

A. I can’t imagine what stories you’ve been hearing. When an employee has worked for the federal government for five years full-time (or its part-time equivalent), he has secured an entitlement to an annuity when he meets the age and service requirements to retire. If he leaves before having five years of service, he’s only entitled to a refund of his retirement contributions.

Tags: ,

Using sick leave

Bookmark and Share

Q. I am a CSRS employee and have worked about 40 years. I plan to retire by the end of this year. I have about 1,659 hours of sick leave. How many hours of sick leave is equivalent to one service month, so I could plan to use the remaining sick leave and not lose it?

A. Let’s get one thing clear from the beginning. You have no right to burn off your sick leave. It may only be used for legitimate reasons spelled out in law and regulation. If you want a rough estimate of how many hours it takes to make a retirement month, use 174. Note: Annuities are based solely on years and full months of service, so there are usually some stray hours left over. Add those leftover hours of actual service to your hours of sick leave when doing the computation.

Tags: ,

Refund of contributions

Bookmark and Share

Q. I went to work for the federal government in 1974 under CSRS and worked until 1984, when I resigned and drew my retirement out. I returned to federal service in 2007 under FERS. I will have 20 years service counting military next May 4th. How will drawing my retirement out affect my retirement check?

A. Although you got a refund of your retirement contributions before October 1, 1991, you’ll still get credit for that time in determining your length of service; however, your annuity will be actuarially reduced based on the amount you owe, including accrued interest, and your age on the day you retire.

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: ,

Annuity calculation

Bookmark and Share

Q. I worked 22 years for the federal government, and five of those years were as a CBP officer with 6C coverage. I retired at age 62. My high-3 salary used to calculate my annuity was $88,115, which means that 17 years should be calculated using 1.1 percent and the other five using 1.7 percent. I have been calculating my numbers but they don’t match up with the $1,892 annuity I receive monthly. I wrote a letter to OPM asking for the formula they used, but I have not received an answer. According to my numbers, I should receive about $400 more each month. What can I do to receive a copy of the calculation used for my pension? Read the rest of this entry »

Tags: ,

Retirement benefits

Bookmark and Share

Q. I worked for the federal government from May 1985 to February 2005 as a FERS employee. My remaining annual leave was paid out to me, and I had more than 700 hours of accumulated sick leave. I moved all of my TSP contributions into another fund several years ago. As I plan for retirement, are there any retirement benefits I can receive or can I receive payment for sick leave? I saw in your column: “If you are already off the rolls, you can apply for a refund up to 31 days before your 62nd birthday.” That is fast approaching, and I wonder if there is anything I can recoup. Read the rest of this entry »

Tags: , ,

CSRS pension

Bookmark and Share

Q. I am a postal employee in the CSRS pension plan. I’m 64 with 33 years service. If I die before I retire, will my wife get the 55 percent of what my pension would be as if I was retired? Would she be eligible for the survivor benefit as if I would have been retired? 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: ,

CSRS and Social Security

Bookmark and Share

Q. I retired at 60 under the CSRS Offset program 18 months ago which, I think, I understand fairly well.  Still: At 62 (this summer), I understand my CSRS amount will be reduced by my Social Security benefits amount. I want to confirm that the total I will receive will be substantially the same. But also, will my bank then begin receiving two deposits? Or does OPM somehow intervene so that there is but one monthly payment? Also, while I worked under the CSRS Offset program for 25 or so years (six under pure CSRS), what about the Social Security benefits that I should have accrued when I was a young man working for a grocery, a bank (during the lapse in service), and other full- and part-time jobs outside of government service? Read the rest of this entry »

Tags: ,

VSIP ramifications

Bookmark and Share

Q. I’m a retirement eligible FERS employee also eligible for the supplement when I retire. I’m thinking of retiring this Dec. 31 since I may be offered a VSIP to retire due to force restructuring. Will a VSIP payment count against the 15K something minimum
level of earnings?

A. No, it won’t. The limit applies only to earnings from wages or self employment.

Tags:

Dropping daughter’s coverage

Bookmark and Share

Q. I am enrolled in the Federal BCBS (self + family plan) and wanted to drop our 18-year-old daughter from the plan as she has moved out and does not associate with the family any longer. My local rep said this wasn’t possible but couldn’t state exactly why I couldn’t drop her … just said it couldn’t be done. I wasn’t comfortable with this answer and lack of explanation. If I am unable to drop her, who is responsible for the costs associated with her lifestyle? Read the rest of this entry »

Tags:

FERS supplement

Bookmark and Share

Q. I retired from federal service in February 2010 under the FERS Special system and my MRA is Febuary 2016. I understand that if I work after February 2016, my FERS supplement will be means tested against how much I am making in salary. If I work after my MRA, making 150K for only two years and therefore lose my supplement during that time frame, would the supplement restart after I worked those two years, and would the supplement stay at the same amount as when I retired in February 2010? Read the rest of this entry »

Tags: ,

Waiting for Social Security

Bookmark and Share

Q. I am 60 and retired three years ago under CSRS with the post office. Will my annuity be reduced if I do not claim Social Security benefits at 62? I want to wait until I am 65 to claim Social Security. I worked nine years under Social Security when I was younger.

A. Because you retired under CSRS – not CSRS Offset – your CSRS annuity will never be reduced. If you are eligible for a Social Security benefit, the fact that you retired from a retirement system where you didn’t pay Social Security taxes means that your Social Security benefit will be subject to the windfall elimination provision. The WEP reduces the Social Security benefit of anyone who has fewer than 30 years of substantial earnings under Social Security. Note: If you only have nine years of coverage under Social Security, you won’t be eligible for a Social Security benefit. You have to have 10 years – 40 credits – to receive that benefit.

Tags: , ,