Ask The Experts: Retirement

By Reg Jones

Civil service and Social Security

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Q. My wife retired from a civil service job with 31 years of service and gets a retirement check each month. She continued to work elsewhere under Social Security and now has enough quarters to get a Social Security retirement. Will she continue to get her complete civil service check and one from Social Security?

A. Assuming she was a CSRS employee, she’ll continue to receive her unreduced CSRS annuity; however, her Social Security benefit will be subject to the windfall elimination provision. The WEP reduces the Social Security benefit of anyone who receives an annuity from a retirement system, such as CSRS, where he or she didn’t pay Social Security taxes and has fewer than 30 years of substantial earnings under Social Security.

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Military and federal service and pensions

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Q. I am a retired Air Force veteran with 26 years of active-duty service. I receive a pension/retirement each month. I am now employed with the state of California, but it is an uncertain situation, given the economic difficulties the state is facing. I was looking at applying for a federal job, but I’ve been told that if I do, I would be reinstated as a federal employee and would no longer receive my pension. Is this true? I was hoping I could keep my pension and work in a federal job, but I believe this is called double-dipping.

A. No, it isn’t true. You could continue to receive your military retired pay and the salary of your new position. If you wanted to, you could make a deposit into the civilian retirement system and get credit for your active-duty service in determining your total years of civilian service and your annuity computation. However, when you retired, you would have to waive your military retired pay; otherwise, you wouldn’t get any credit and your deposit would be refunded to you.

Note: No matter what you decide, you would have to work for five years under the civilian retirement system to be vested and earn an entitlement to an annuity.

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Social Security

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Q. I am a retired CSRS postal worker who does not have enough quarters to be eligible for Social Security when I’m 62. Can I collect benefits from my former or current wife who both have worked and paid into Social Security for years? I was married to my former spouse for more than 10 years and her benefits would be a better financial option for me.

A. Because you are receiving an annuity from a retirement system where you didn’t pay Social Security taxes, any spousal Social Security benefit to which you might be entitled would likely be eliminated by the government pension offset provision of law. The GPO would reduce that benefit by $2 for every $3 you receive in your CSRS annuity.

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CSRS Disability Retirement vs. Workers’ Compensation

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Q. I am eligible for both CSRS Disability Retirement and Workers’ Compensation; therefore, I have the right to choose benefits from either.  I am receiving workers’ compensation.  I am 64.  Although medical evidence and evaluations, including second opinion examinations, show that I will never be able to work in any capacity (this has been the case for many years), OWCP does not consider me to be totally disabled according to its definition.  If I return to CSRS disability annuity, will my retirement still be considered “disability retirement”?  I know that I no longer have to provide annual medical reports; but I was told recently by an “expert” in OPM disability retirement and OWCP matters that after age 62, my retirement would not be a “disability retirement”.  OWCP is compensating me for certain medical bills.  Will OPM continue to compensate me for work related medical bills if I return to their rolls?

A. If you left workers compensation and moved to the CSRS disability retirement rolls, you’d be a disability retiree. FERS disability retirees are the only ones that are moved off the disability rolls and onto the retirement rolls when their annuities are recomputed at age 62. CSRS disability retirements aren’t recomputed.

OPM doesn’t compensate anyone for work related medical bills. If you are enrolled in the Federal Employees Health Benefits program, any bills you might have would be handled through your carrier and treated the same as if you were a regular retiree.

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CSRS survivor benefit

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Q. Next year I will be eligible for CSRS retirement (30 years of service at 60). Would my election of partial or full survivor annuity for my wife affect her earned Social Security benefits after I die?

A. No, it wouldn’t.

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Legislative branch vs. executive branch

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Q. I am covered by CSRS and I’ve worked under the legislative branch for 16 years and the executive branch for 12 years. How will my retirement annuity be affected by working under the different branches? I am being offered an early out. I see mentioned the enhanced formula will be used for the legislative branch service but do not know what that is.

A. Your service as an employee of the legislative branch will be calculated as follows: 2.5 percent x your high-3 x your years and full months of legislative branch service. Your executive branch service will be computed using the CSRS formula.

 

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Federal employment reinstatement

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Q. I am eligible for federal employment reinstatement with military preference. I was a GS-12 Step 3 with six years of seniority. I left federal employment in 1986. If I am reinstated as a GS-12, will I re-enter at Step 3 or Step 1? Will I retain my six years of seniority plus four years for my military service?

A. The fact that you are reinstatement eligible doesn’t mean that you have automatic entitlement to a particular grade or step. You’ll have to find a position for which you are qualified and apply for it. Depending on your qualifications, you could be offered one at your previous grade or one above or below it. Part of the step determination may depend on what you are making now.

If you come back to work for the government, you will get credit for you prior years of civilian service. And it will also be used in your annuity calculation, unless you took a refund of your retirement contributions when you left. If so, you’ll have the option of redepositing that amount plus accrued interest or having your annuity reduced acturially based on how much you owe and your age at retirement. Depending on when your active-duty service was performed, you may have to make a deposit to get credit for it.

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OPM-SSA integration

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Q: I am an employee under the Civil Service Retirement System Offset program, and I plan on retiring at age 64. I know my annuity will be reduced for the period of time I was an offset employee. I have dealt with the local Social Security Administration office and I am concerned; they had no idea what the offset is. Does the Office of Personnel Management deal with SSA experts for the offset?

A: OPM and the Social Security Administration have a file-matching system that allows OPM to accurately reduce a CSRS Offset annuity by the amount of Social Security benefit earned while covered by CSRS Offset, and for Social Security to provide a benefit based on an employee’s total Social Security-covered employment.

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Can paid leave count toward Social Security?

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Q: I will be 59 years and 8 months old with 37 years, 7 months of federal service on my target retirement date of Dec. 31. I only earned 33 quarters of Social Security; to earn more credit on Social Security, can paid annual leave be considered as Social Security income for the year 2012, because the paid annual leave is not included as Civil Service Retirement System income for the year 2011? If so, what is the procedure to report it as Social Security income? And will this only be applied at the end of the year of retirement, or it can be considered in any month of the year?

A: Your paid annual leave cannot be used to get Social Security credits. Only earnings from wages or self-employment that are subject to Social Security taxes can secure those credits.

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Best day to retire in leave year 2013?

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Q: I read that the best day to retire under the Civil Service Retirement System at the end of leave year 2013 is Dec. 28, which confuses me because we’re always told to retire the end of the month or within the first three days of the month. I know the Dec. 28 is the end of a pay period, but wouldn’t it work out just as well if I retired on Jan. 2 or 3 since I’d get paid for the holiday of Jan. 1?

A: You can retire on any day that suits you. However, keep these facts in mind: First, if you retire at the end of a pay period, you will get credit for any annual and sick leave leave you earned during that pay period. That won’t happen if you retire before the end of a pay period. Second, because of a wrinkle in the law that only applies to CSRS employees, you can retire up to the third day in a month and be on the annuity roll in that month. However, if you retire after the last day of the preceding month, your first month’s annuity would be reduced by 1/30th for each of those three days. For example, if you retired on the third of the month, your first month’s annuity would be 27/30ths of the full amount.

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CSRS Offset and Social Security

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Q: I am getting ready to retire. I worked for the government from 1968 to 1972, then worked in the private sector and earned my 40 quarters in Social Security. I returned to work for the federal government in 1984 as a Civil Service Retirement System Offset employee. I was told that because I earned my 40 quarters from the private sector that my government annuity would not be reduced: I will get a full government annuity and a full Social Security check. Is that right?

A: By law, your CSRS annuity will be reduced at age 62 by the amount of Social Security benefit you earned while covered by CSRS Offset. Whether you will be affected by the windfall elimination provision depends on how many years of substantial earnings you have under Social Security. If you have 30 or more years, there won’t be any reduction in your Social Security benefit. If not, your Social Security benefit will be reduced. You won’t be subject to the government pension offset.

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CSRS Offset and the WEP

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Q: I had 13 years of Social Security employment (max contribution) before entering the Civil Service Retirement System Offset in 1991. I am 64 years old and considering retirement at age 66. Do CSRS Offset years count in meeting the 30-year requirement to avoid the windfall elimination provision?

A: All years of Social Security-covered employment in which you had substantial earnings count toward the 30 years needed to avoid the windfall elimination provision.

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CSRS retirement

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Q: I was a civil service employee with DHUD from 1969 to 1978. I withdrew retirement funds at that time and have contributed to Social Security since then. I am 64 and am considering going back to work for a government agency with civil service retirement. Can I buy back into civil service retirement and, if so, how long would I have to work and contribute to CSRS to be eligible to retire with civil service retirement?

A: If you returned to work for the government, you would be placed in CSRS Offset (CSRS and Social Security) with the option of transferring to FERS. On your return, you would get credit for those prior years of service in determining your total service and could redeposit the money you were refunded, plus accrued interest, to get credit for it in your annuity computation. As a CSRS Offset employee, you would have to be employed for one year before you’d be eligible to retire. There isn’t any time limit on FERS employees. As a CSRS offset employee, your CSRS annuity would be offset by the amount of Social Security benefit you earned while covered by CSRS Offset. The end result would be the same; the money would simply come from two different places. Note: Going back to work for the government solely for the purpose of becoming eligible to receive an annuity could be seen as deceitful. Your new employer would have had to go through a series of hoops to get you on board only to find you jumping ship without having repaid him for his efforts through honest work.

 

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Deposit

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Q: I have 30 years of service, 18½ under CSRS and 12 under CSRS Offset. When I began my career in 1979 I had four months under FICA, not CSRS. The four months will still count for service and calculating my annuity but unless I pay it back, 10 percent of the amount (which is $600 now) $60 will be deducted yearly from my annuity. Is it to my benefit to repay the $600 or have the monthly annuity reduced by $5 for rest of my retirement? If I live 20 years after retirement, $1,200 would have been reduced from my retirement, versus paying back $600. Also, since the original $600 is never paid back, does it continue to accumulate interest and continue to grow?

A: Now that you have done the analysis, you are in the best position to make the decision.

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CSRS and Social Security survivor benefits

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Q: I’m currently an employee under the Civil Service Retirement System drawing a monthly payment from Social Security under my ex-husband’s benefits. I’ve called and visited the local Social Security office and can’t seem to get a straight answer: I understand that I can’t draw Social Security in my own right because I am a CSRS employee, but will I continue to be able to receive Social Security from my ex-husband’s (now deceased) Social Security account?

A: You might be able to receive survivor Social Security benefit while you are still working. To find out what the eligibility requirements are and the amount you would get, visit the Social Security Administration website. However, when you retire, you will be subject to the government pension offset, which will reduce any survivor benefit by $2 for every $3 you receive in your CSRS annuity. For more information, read SSA Publication No. 05-10007.

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Re-employment and salary reduction

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Q: I am a firefighter/law enforcement retiree under the Civil Service Retirement System. I have been retired for seven years and am interested in returning to work. A local federal agency is interested in having me work for them in a seasonal position as a GS-4. I would work from approximately May to October and would receive no benefits, as these types of positions/employees are not eligible for health insurance or retirement benefits. I would be paying into Social Security, which I am currently not collecting. The agency cannot seem to get a clear answer as to if it would be OK to hire a federal retiree, so any information you might have would be greatly appreciated. If I were to be hired, how would this affect my monthly CSRS retirement payment and/or my CSRS retirement in general?

A: Your salary would be reduced by the amount of your annuity unless you were hired under Public Law 111-84, which allows the re-employment of retirees on a limited basis if the appointment meets one of the criteria in Section 1122. Make sure the position you are applying for qualifies under this statute and would allow you to receive both your annuity and a full salary before accepting it.

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Involuntary separation

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Q: I was involuntarily separated from my position as LEO under Civil Service Retirement System. I served for 22 years. I was separated at 47 because of a reduction in force. I have been unable to find another LEO position. I am a few months shy of 50. What are my options?

A: If you could find a non-LEO job in the federal government, you would be able to retire at age 50 and have those 20 years of covered service computed under the enhanced formula and the remainder under the standard formula. However, it would be unfair to your new employer to leave without repaying him for the effort he put in to hire you. Or you could wait until you reach your MRA and apply for a deferred retirement, which would be computed in the same way.

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Retirement income

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Q: I am a retired military service member and a federal employee under the FERS retirement system. I have been told by others that when I retire from civil service and get ready to draw Social Security that my Social Security would be decremented anywhere from 40 percent to 60 percent. Supposedly this is due to the drawing of three government checks, Military Retirement, Civil Service Retirement and Social Security. I have spoken to my HR people and they tell me this is not true because Social Security is part of the FERS retirement plan. I spoke to a Social Security employee and she told me my Social Security would be decremented.

A: Trust your HR people. When you retire from your civilian job, you will receive a FERS annuity and a special retirement supplement that approximates the Social Security benefit you earned while employed under FERS. At age 62, when you become eligible for a Social Security benefit, the SRS will stop. You can, if you wish, apply for a reduced Social Security benefit at that time or postpone it to a later date to receive a higher benefit. That Social Security benefit will be based on all your years of Social Security-covered service.

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Retirement eligibility

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Q: I am a 70-year-old physician employed by the Army as a Defense Department civilian for eight months. I have previous experience in the Public Health Service (Indian Health Service) of 7.6 years from 1968 to 1975. When am I eligible to retire? My HR office tells me that my time in the PHS is creditable service. Does that satisfy the requirement of five years of civil service?

A: No, it doesn’t. You need to have five years of FERS-covered service to retire.

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Creditable Civilian Service

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Q: I will turn 62 in September. I had 16 years of honorable service in the Navy, April 1969 to April 1985, before being hired into the federal civil service in December 2009. I do not draw a retirement from military service. Do I have to have five years of federal civil service to qualify for retirement at age 62, or will five years of the military service qualify for the five-year requirement? I realize that I have to make a deposit to cover the time I spent in military service.

A: You have to have five years of civilian service to be eligible to retire.

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