Ask The Experts: Retirement

By Reg Jones

Excess contributions

Bookmark and Share

Q. I began my civilian federal employment in May of 1974. I am a Vietnam era veteran with three years military time and paid back that time. My service comp date for retirement is May 1971. I am going to retire at the end of this year. Based on the above, will all CSRS contributions I paid after reaching 41 years, 11 months, qualify for refunding to me?

A. If you have 41 years and 11 months of service from which retirement deductions were taken (or a deposit made), any excess deductions will be refunded to you with an option to purchase additional annuity.

Tags: , ,

Maximum earnings

Bookmark and Share

Q. You recently answered a question regarding the maximum earning amount for 2014 is $15,480 before the Social Security benefit would be reduced. Does the SSA consider military retirement, VA disability pay, along with TSP disbursements as “earnings”?

A. Those aren’t earnings. Earnings are income received from wages or self employment.

Tags:

Retirement credit

Bookmark and Share

Q. I was called to active duty in 2009 to serve in Iraq. However, when I was ordered to active duty, I used my annual leave and my military leave during my short stay. While serving on active duty, I was getting paid and retirement deductions were being deducted from my pay, along with all the other deductions. So, my question is: Shouldn’t that time be counted toward federal credit? Especially since retirement deductions were being taken and I was using leave the whole time. Read the rest of this entry »

Tags:

FERS or CSRS?

Bookmark and Share

Q. I’m under FERS, and my Service Computation Date is Nov. 26, 1983. A co-worker in my organization has an SCD of Nov. 7, 1983 and is under CSRS. What is the SCD cutoff date for FERS vs. CSRS? Read the rest of this entry »

Tags: , ,

Disability retirement

Bookmark and Share

Q. I am a retired FERS employee — 59 years old, with 25 years of federal service. I retired two years ago under VERA VSIP. My employer (Defense Department) was reducing the workforce due to budget cuts and abolished my job.

I paid into Social Security for 42 years. I have some health issues and am considering applying for Social Security disability. My question is: Will Social Security disability retirement affect my FERS annuity? Read the rest of this entry »

Tags: , , ,

Retirement date

Bookmark and Share

Q.I read that Aug. 1 is a best date to retire. Why not July 31? That is for those who work a 4-5-9 schedule (i.e., Aug. 1 is a non-work flex Friday).

A. As a CSRS employee, your only requirement is that you retire no later than the third day of a given month. Whoever wrote that Friday, August 1 was the best day to retire was probably accepting the fact that most employees complete their workweek on a Friday. By leaving at the close of business on that day, they’d receive a full week’s pay. Since you are on a flex schedule, nothing would prevent you from retiring at the end of your last work day. By doing so, you’d be on the annuity roll on Aug. 1, instead of Aug. 2. FYI. Since you’d be leaving in the middle of a pay period, you wouldn’t get any credit for annual or sick leave you would have earned if you had retired at the end of a pay period.

Tags: ,

High-3 calculation

Bookmark and Share

Q. I have been a federal employee for Homeland Security for 6-1/2 years. I have been medically disqualified from my job. I am going to try to get disability. I have worked full time for the first 4-1/2 years, and went part-time down to 25 to 30 hours a week. Will they use the highest three salaries, even if when discharged I was working part-time for the agency? How does the calculation work for this situation?

A. An employee’s full-time salaries are used in determining his high-3, even if he is in a part-time position.

Tags: ,

Early retirement

Bookmark and Share

Q. I’m a FERS postal carrier with 26 years of service. I am about to turn 49. What penalty will I face if I leave the post office at age 54 with 31 years of service? Read the rest of this entry »

Tags: ,

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: ,