Ask The Experts: Retirement

By Reg Jones

Creditable service

Bookmark and Share

Q. I enlisted in the Marine Corps in 1984 and retired in 2004 with 20 years of service. In March 2006, I was hired as a Defense Department civilian and have been so to date. I completed my deposit for Military Service Credit in 2011 and have my letter for “paid In full.” I would like to retire at MRA 56 years, four months (1966). Does my time in service (military), if combined at retirement, override the minimum years of creditable service, therefore foregoing the penalty for retiring under age 60. My understanding is that you need MRA plus 30 years service to avoid a penalty. I would have 20 years military service and 16.5 years civil service. I might stay longer, but wanted to know my options. Read the rest of this entry »

Tags: ,

Deferred FERS retirement

Bookmark and Share

Q. I plan to leave government employment within the next year, at age 50, with about 15 years accrued service. I will defer my pension until I am 62. Everything I read discusses elections for survivor benefits as the pension payments begin. What if I were to die before the annuity begins? What benefit will be provided to my surviving spouse and minor child while I have deferred my pension payments?

A. Because you have at least five years of service, if you left your retirement contributions in the fund when you resigned and later died, your spouse would be entitled to a survivor annuity based on your prior service. And any dependent children would be entitled to children’s annuity benefits.

Tags: ,

Leave for school

Bookmark and Share

Q. I have been working for the government more than 20 years. Can I take leave without pay to go back to school full-time for nine months?

A. You can request LWOP. However, the decision to grant it is in your supervisor’s hands, as guided by agency policy. If what you study would increase your value to the agency, the chances of LWOP being granted would be greater than if it didn’t.

Tags:

Social Security credits

Bookmark and Share

Q. I am a CSRS employee who will retire at the end of 2014. I have 36 quarters of work covered under Social Security  before I started federal service and I am trying to decide whether or not to try to get four more quarters of coverage after I retire. I understand the WEP provision. I was told at a retirement seminar that Social Security quarters do not count if earned before the age of 22 or after the age of 62. Is this true? Read the rest of this entry »

Tags:

Annuity taxes

Bookmark and Share

Q. I’m a recent federal retiree and I’m trying to project my income for the year. Is the starting point for the taxable portion of my monthly annuity the amount before or the amount after the survivor’s benefit is deducted? From what I gather from IRS Pub 721, the deduction is a pre-tax deduction, but it lowers the tax-free portion amount of my monthly annuity. Is this correct? Read the rest of this entry »

Tags:

Lateral transfer, step increase

Bookmark and Share

Q. I was approached with a lateral transfer from a GS-1071-9 Step 4 to a a GS-1030-9. I told them I would consider it with monetary compensation (I had a step increase in mind). They responded that they couldn’t do that and would open the position to the outside. Is this true that I could not request a step increase to go with the lateral transfer?

A. Yes, what you were told is correct.

Tags:

Phased Retirement

Bookmark and Share

Q. How does WEP work under Phased Retirement?

A. Just the way it always does. If the individual retires before age 62, his Social Security benefit is reduced if he has fewer than 30 years of substantial earnings under Social Security. If he retires at or after age 62, the reduction occurs when he retires.

Tags:

Minimum retirement age

Bookmark and Share

Q. My wife will be 50 in three years and will have 30 years of federal service under FERS. Can she retire with no penalty and keep her federal health benefits.

A. No, she cannot retire on an immediate annuity. The earliest she could do that would be when she reaches her minimum retirement age, which in her case would be 56 years and 6 months. The only way she could retire earlier than her MRA would be if her agency offered her an opportunity under the Voluntary Early Retirement Authority and she was at least age 50.

Tags: ,

Discontinued service retirement

Bookmark and Share

Q. I have 25 years and three months as a FERS employee. If my agency separated me due to poor job performance, would I be eligible for a discontinued service retirement ?

A. Yes.

Tags:

CSRS offset to FERS

Bookmark and Share

Q. I’m an air traffic controller hired in 1985 under CSRS offset as a flight service controller and later converted to FERS with no explanation. I’m coming up on age 56, does the CSRS exemption for flight service specialists appointed prior to Jan. 1, 1987 apply? If not, which law explains the differences between CSRS and CSRS offset?

A. You were actually hired as CSRS Interim employee (CSRS and Social Security). Because you had fewer than five years of CSRS coverage on Jan. 1, 1987, you were automatically converted to FERS. Therefore, the exemption you referred to doesn’t apply.

Tags: ,

Night differential

Bookmark and Share

Q. Is night differential (shift work) added to my high-3 when calculating my retirement annuity?

A. No, it isn’t, unless you are a wage system employee. Then it is.

Tags:

Retirement date

Bookmark and Share

Q. I am a CSRS employee. If I retire on Friday, Oct. 31, will I accrue my annual leave for that pay period? I will have worked the 80 hours, but technically the end of the pay period is Saturday, Nov. 1.

A. You may retire at the end of the day on Friday, Oct. 31, be on the annuity roll the following day, and get credit for the annual and sick leave you earned during that pay period.

Tags: ,

Social Security payment

Bookmark and Share

Q. I am a 23-year retired military veteran (1968-1991), 30 percent disabled, and I have been receiving military retainer pay since 1991. I then began working for the Veterans Administration as an engineer GS-09 in June 1998, and I am still employed (FERS). But I can retire soon with 16 years civil service gaining a monthly retirement pension from VA and too what I have deposited into TSP. When I retire at 66, which would be next year, what will my Social Security benefit be? I have been told it will be reduced because I have two ‘pensions’ (one from military and the other from VA under FERS), yet I paid into Social Security (FICA during military) and Social Security taxes also under VA. During all my employment time (military and civil service), I have also paid taxes into Social Security, so why would I not get full benefits? Read the rest of this entry »

Tags: ,

Offset reduction

Bookmark and Share

Q. I’m looking to retire after 38 years of federal service, including 4+ military & 4+ postal. I left the post office and returned to federal service a year later in 1985. I was included as a CSRS Offset, paid my military deposit and have paid into Social Security for over 39 yrs. When I retire, will my CSRS retirement be affected by a reduction when I apply and receive Social Security, or will my Social Security be reduced? The way I read most articles, is that I will receive my federal pension and Social Security without a reduction. Am I correct? Read the rest of this entry »

Tags: ,

CSRS eligibility

Bookmark and Share

Q. I worked for the post office from 1980 to 1990 and then quit to attend grad school. Although I’ve since become successful, immediately after grad school I needed money and so withdrew it from my CSRS account. Will I be eligible to go back on CSRS if I return to federal service? Read the rest of this entry »

Tags: , ,

Military retired pay, FERS, VA disability

Bookmark and Share

Q. I retired from the military with a 40-percent VA disability. I am now a government employee under FERS. If I buy back my military time and then retire under FERS, will I still receive my VA disability payments and, if so, will the VA payments be deducted from my FERS retirement in the same way as they are deducted from my military retirement today?

A. While you would have to waive your military retired pay when you retire from your civilian position, you wouldn’t have to waive your VA disability payments. They would have no affect on your FERS annuity.

Tags: , ,

FERS retirement

Bookmark and Share

Q. My USPS retirement eligibility date is Dec. 30 (56th birthday).  My annuity projection shows about a $10,000 difference if retiring Dec. 30 vs. April 15 next year, which would be exactly 30 years.  Is this  correct?

A. If you retired at your MRA but with fewer than 30 years of service, you’d be retiring under the MRA+10 provision, which would reduce your annuity by 5 percent for every year you were under age 62. To avoid that hit, you’ll need to wait until you have 30 years of service to retire.

Tags: , , ,

CSRS or FERS

Bookmark and Share

Q. I had 10 years of employment covered under CSRS, then resigned. I came back in 2007 under FERS. I also have two years, five months and 21 days military service. Would it be to my benefit to change to CSRS offset. I plan on retiring May 2015 when I will be 62 with 20 years of service.

A. You can’t change your coverage now. You are a FERS employee who will have a CSRS component in his annuity. If your active-duty service was performed before you first became a federal employee (or while you were covered by CSRS), you could make a deposit and get credit for that time in your CSRS component. If it was between the time you left and were covered by FERS (or while you were covered by FERS), it would apply to your FERS component.

Tags: , ,

Retirement options

Bookmark and Share

Q. I am a GS-1811 Special Agent with four years until my FERS retirement in 2018 at age 62 (I was “grandfathered in” at age 42). And I have also bought back 12 years of military service time. I failed a PIP due to my ADD/ADHD & depression, and I was recently served with a Notice of Proposed Removal as an 1811. I am in a 3-agent office, four hours away from our Resident Office, and there are no non-1811 jobs available to me in my office’s area. Because I am considered disabled per the ADA guidelines, and the NOPR says I cannot perform well enough as an 1811, are there some sort of retirement options available to me for which I qualify (e.g. medical, disability, Discontinued Service, etc.)? Read the rest of this entry »

Tags: ,

When can I retire, part one

Bookmark and Share

It’s that time of year, when employees start thinking hard about retiring. If you are one of them, you need to know the two factors that determine if you’ll be able to do that. The first is age. The second is years of service. In this column I’ll go over the rules for Civil Service Retirement System, and in the next one, Federal Employees Retirement System.

CSRS requirements:

Immediate retirement

  • Age 62, five years of service.
  • Age 60, 20 years of service.
  • Age 55, 30 years of service.

Early retirement

  • Age 50, 20 years of service.
  • Any age, 25 years of service.

Deferred retirement

  • Age 62, five years of service.
  • Age 60, 20 years of service.

Immediate retirement means that you have the age and service needed to retire on an immediate annuity. Once you’ve got that combination, you can retire whenever you feel like it. Early retirement is an option, if your agency is offering you that opportunity through the Voluntary Early Retirement Authority and/or a Voluntary Separation Incentive Payment. It’s also an option if you are being separated through 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.
Service credit rules
Under CSRS, creditable service includes any service for which retirement deductions were taken from your pay and not refunded. With one exception, if it was refunded, the time will be creditable as long as you repaid the refund. Here’s the exception: If you got a refund for service performed before Oct. 1, 1990, and didn’t make a redeposit, it will still be used in determining your length of service; however, your annuity will be reduced actuarially based on your age at retirement and the amount you owe.
You’ll also get service credit for any period of civilian employment where retirement deductions weren’t taken from your pay, but only if it was performed before Oct.1, 1982. If it was performed on or after that date, you’ll only get credit for the time in your annuity computation if you make a deposit. If you don’t, your annuity will be actuarially reduced based on the amount you owe, plus accrued interest.
If you were on active duty in the armed services before Jan. 1, 1957, you’ll get full credit for that time. If it was performed after Dec. 31, 1956, and you were first hired before Oct. 1, 1982, you’ll also get credit for it; however, if you are retired and eligible for Social Security at age 62 and haven’t made a deposit for that time, those years will be deducted and your annuity reduced. If you retire on or after age 62, haven’t made a deposit, and are eligible for a Social Security benefit, the reduction will be made when you retire.
If you were first employed on or after Oct.1, 1982, you’ll have to make a deposit in order to get credit for that time. If you are receiving military retired pay, you’ll usually have to make a deposit for that time and waive that pay before retirement in order to get credit for it. On the other hand, if you are receiving reserve retired pay, you’ll still have to make a deposit to get credit for your active duty service, but you won’t have to waive your reserve retired pay.
Time in a nonpay status is also creditable if it doesn’t exceed six months during any calendar year.
Once you have enough years of creditable service to retire, any unused sick leave will be added.
Computing your length of service
Your length of service is based on all the years you’ve worked, plus any full months that don’t add up to a year. Any days that don’t add up to a full month are converted to hours and added to unused sick leave. If you have enough of those hours to create one or more months, they’ll be used to compute your annuity.
So what are “enough hours”? 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, 2,087 (the number of hours in a work year) is divided by 360. 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.