By Reg Jones
April 4th, 2012 | Uncategorized
Q. Do former CSRS employees eligible for a deferred annuity receive an annual cost-of-living increase for deferred annuity payment, or is amount static?
A. Those who apply for a deferred annuity will have it calculated as though they had retired on the day they left government. It will not be increased by any cost-of-living adjustments that were applied to annuities between that time and the date on which their deferred annuity begins. However, from that point forward, those annuities will be increased by any COLAs that are applied to other annuities.
January 23rd, 2012 | Uncategorized
Q. I’m retired under the Federal Employees Retirement System, and have been retired for over 10 years. I was injured on the job, unable to perform the work I was doing, and have had to change to an office job. I was lucky enough to be employed by the state and had really good insurance. So I opted out of my FERS medical benefits and received a larger annuity monthly payment. I didn’t think at the time that double insurance was needed.
I am 47 now, still disabled and unable to return to my government job. I continue to receive an annuity but would like to opt back in for the medical insurance. Is that possible during open enrollment?
If I’m still considered disabled at 62, will they stop all payments and consider me permanently disabled? Will I have to apply for Social Security disability, or do the payments continue under a different name?
A. The fact that you didn’t elect to continue your Federal Employees Health Benefits insurance into retirement bars you from re-enrolling now. As for your annuity, if you are still disabled when you reach age 62, your annuity will be recomputed as though you worked to 62. As a result, actual service will be added to the time you spent on the disability rolls. The total will be multiplied by 1 percent and the product will be multiplied by your high-3 on the day you went on disability, increased by any FERS cost-of-living adjustments payable from that time to age 62.
January 5th, 2012 | Uncategorized
Q. Regarding when my COLA will start: If I retired Jan. 31, 2011, am I a January retiree or a February retiree?
I know that the 2012 COLA is 3.6 percent. Because I wasn’t on the annuity roll in December, will I get 3 percent or 3.3 percent?
A. You won’t be eligible for any cost-of-living adjustment until January 2013. Because you will be on the annuity roll in February, that COLA will cover only the 10 months you were on the annuity roll, and equal 5/6 percent on whatever it turns out to be.
January 4th, 2012 | Uncategorized
Q. Customs and Border Protection Officers (CBPOs) were covered by standard FERS until 2008, when they went under a new enhanced (law enforcement) retirement system. Standard FERS retirees do not receive a COLA until age 62, while law enforcement retirees do not have this requirement. If a CBPO retires at age 57, will the entire immediate annuity be covered by the COLA or only the portion earned after 2008 with the remainder covered at age 62?
A. There is no such thing as a partial cost-of-living adjustment. If you have at least 20 years of law enforcement-covered service when you retire, you will receive the same COLA that is provided to other FERS retirees, regardless of your age. If you don’t have at least 20 years of such service, you won’t receive your first COLA until you reach age 62.
December 30th, 2011 | Uncategorized
Q. I am A CSRS employee who is retiring Dec. 31 and wish to elect a partial annuity for my husband. He’s a retired civil service employee and receives his own pension. We’ve decided that about 25 percent of my annuity would be sufficient for him. However, on the Application for Immediate Retirement Form, Section F, it seems that I can only elect 55 percent of a fixed dollar amount. If I do this, say 55 percent of 50,000 per year ($27,500), would this amount still be indexed for future cost-of-living adjustments, or would it always remain at $27,500? I’ve asked the retirement branch at my agency, and they don’t know. I’ve also researched all of the Office of Personnel Management documentation and can’t find this addressed, either.
A. If your spouse agrees to a lesser amount in writing, you can elect any dollar amount you want him to receive. If you predecease him, he will receive that amount increased by any cost-of-living adjustments that have been applied to your own annuity since you retired. From that point forward, his survivor annuity will be increased by future COLAs, just as yours would have been.
December 28th, 2011 | Uncategorized
Q. I am planning on retiring at the end of December. I am in the Civil Service Retirement System and have over 31 years in the legislative branch, where I am still employed. I also have another 14 months in the executive branch, for a total of 32 years, five months. I will be 53 in late December, so will I be penalized for not quite reaching age 53? I realize I already have to take a 4 percent reduction because I’m under age 55.
My retirement counselor advised me to retire at the end of November instead of December so I could take advantage of the cost-of-living adjustment. Is this true? Am I better off, and will I be able to receive the COLA in January? Also, does that mean that I would receive 3.6 percent of my total annual income (which I figure to be over $70,000 a year). That would mean a $2,520 a year (or $210 a month) raise for me.
A. You won’t be eligible to retire until you reach age 55, unless you are offered an opportunity to retire early or are involuntarily separated. If either of those is the case, your annuity would be reduced by 2 percent for every year (0.17 percent per month) you were under age 55.
If you retired at the end of November, you’d be on the annuity roll in December and eligible for 1/12th of the COLA payable in January 2012. Your first full COLA wouldn’t be payable until January 2013.
December 28th, 2011 | Uncategorized
Q. I am planning on retiring Dec. 31 after 41 years of federal service. Should I retire Nov. 30 instead to take advantage of the 3.6 percent cost-of-living adjustment, and will I be eligible for the COLA that will take effect Dec. 1?
A. If you retired on Nov. 30, you would be eligible for 1/12th of the COLA increase, not the entire amount. That’s because COLAs are based on the number of months that a retiree is on the annuity roll.
December 20th, 2011 | RETIREMENT
Q: There has been talk that there may be a COLA increase this year. If a person retires on Dec. 31, would they be eligible for the COLA?
A: No. If you retired on Dec. 31, 2011, you’d receive 11/12ths of the 2013 COLA in your January 2013 annuity payment. You would have to retire no later than Nov. 30, 2011, to receive a full COLA adjustment in 2013.
December 14th, 2011 | SURVIVOR BENEFITS
Q: Will my spouse receive cost-of-living adjustments on her survivor annuity after my death?
November 4th, 2011 | Early retirement
Q: If you accept an early retirement with VSIP at age 54, then there is no COLA increase until age 62. How is the annuity computed at 62? Do the COLA increases accumulate over those eight years?
A: No, they don’t accumulate. The annuity you receive when you retire will remain frozen until you reach age 62, at which point you’ll be eligible for your first cost-of-living increase.
October 26th, 2011 | Uncategorized
Q. I am the disabled dependent survivor of my father who was a federal employee for 30 years. I collect Social Security Disability Income and Medicaid. Collecting the disabled child survivor annuity would put me over the unearned income limit to collect Medicaid, and I can’t afford insurance. The state of Maine has a Medicare Savings Plan that I could join but the income limits are very low and very strict. The income limit is $1362 per month. I spoke with some legal specialists in the field of Medicaid and they said that my SSDI COLAs would not affect my eligibility for this Medicare Savings Plan but the COLAs from the annuity would. I read somewhere online this quote:
October 5th, 2011 | Workers' compensation
Q: My wife is a nine-year CSRS VA employee injured on the job.She was on LWOP receiving workers’ compensation till she reached over 80 percent of her former pay in the private sector. When she reaches retirement age, will the cost of living adjustments for the last 16 years be added on to her annuity. If she receives a new federal position does that entitle her to receive 16 years as time served? How is sick time calculated?
A: If your wife doesn’t return to federal employment, she could apply for a deferred annuity at age 62. That annuity would be based on her nine years of service and her highest three years of average salary on the day she went on LWOP. Her time on LWOP would not be included in that calculation. If she were to return to federal employment and later retire, the time she was actually on LWOP would be included in determining her years of service and used in the calculation of her annuity. Any sick leave she still had to her credit when she went on LWOP (and any new sick leave she earned) would be added to her service time after she met the age and service requirements to retire and used to increase the amount of her annuity.
September 22nd, 2011 | RETIREMENT
Q: I understand that COLAs are based on an effective date of Dec. 1. Under CSRS, if I retire on Oct. 31, will I be eligible for a part (i.e., 1/12) of any COLA due for January 2012, or would I have to wait until January 2013 to see any increase in my pension?
A: If you retire at the end of October, you’d be on the annuity roll in November. Therefore, you’d be eligible for 1/12th of the cost-of-living adjustment, which would show up in your January 2012 annuity payment. Of course, that’s assuming that there will be a COLA. There hasn’t been one for the past two years.
September 9th, 2011 | Uncategorized
Q. I am CSRS and looking forward to my upcoming retirement in February, but I have some questions regarding survivor benefits. We are going to elect to take out a full survivor benefit annuity for my wife, but we cannot find any reference concerning whether the cost of this annuity will increase with future cost-of-living adjustments or age. We know that the formula for the cost is based on 10 percent of the gross amount at retirement, but we were under the assumption that the initial figure for the cost would not go up regardless of future COLAs.
A. If you elect a full survivor benefit, your basic annuity will be permanently reduced by approximately 10 percent. It isn’t exactly 10 percent because of the formula used: 2.5 percent of the first $3,600 used as a base for the survivor annuity, plus 10 percent of any amount over $3,600.
In the event of your death, a full survivor annuity will provide your spouse with an amount equal to 55 percent of your unreduced annuity — that is, the annuity you would have received before you made the survivor election — increased by any cost-of-living adjustments that are made to retiree annuities following your retirement.
August 11th, 2011 | Uncategorized
Q. Is the FERS Law Enforcement annuity indexed for inflation?
May 9th, 2011 | Uncategorized
Q: Regarding the recent freeze on COLA, are these paid from appropriation type funds or from the “residuals” of the CSRS? Residuals being money made by the fund and that remain behind in the event the retiree dies before drawing all their contributions out as annuity payments? Even if a survivor gets half of the employee’s monthly payment, but still retired employee still has to buy an annuity for the survivor after retiring to keep health benefits. Just seems like lots of funds going in with only some coming out. I believe CSRS was established to run without appropriated funds and if true, my belief is that COLA should not have been frozen for CSRS retirees.
A: Your argument is based on a false premise.The amount of each COLA adjustment is determined by the average Consumer Price Index of Urban Wage Earners and Clerical Workers for the third quarter of each year over the third quarter CPI-W index of the previous year. If the index is negative, by law no COLA can be paid. In short, the amount of any year’s COLA is determined by the economy, not be contributions made by employees and their agencies.
March 30th, 2011 | Uncategorized
Q. I’m planning on retiring at the end of June. With 3,100 hours of sick leave, I’ll have 38 years of CSRS service. I’ve selected June 30 as my last day for the following reasons:
1) My annuity will begin the very next day, 2) Even though June 30 is a Thursday, I will have completed my 80 hours of work to earn my final leave accrual, and 3) since retiree COLAs are based on whole months, I will get the retiree COLA for month of July (assuming there is one).
Is there anything wrong with my reasoning?
A. With one possible exception, your reasoning is sound. Even if there was a cost-of-living adjustment in 2011, it would not be included in your annuity until January 2012. And it would be 5/12 of the amount. That’s because COLAs are effective on Dec. 1 of the year in which you become eligible and are reflected in the January annuity payment.
March 24th, 2011 | Uncategorized
Q. Does a COLA get added to your current salary or starting salary? I’m working in San Diego and they have been adding it to my starting salary, then adjusting. Is that the correct way to adjust?
A. You haven’t received a cost-of-living adjustment. Only retirees receive COLAs. If you received a pay increase, it was an adjustment to your current rate of pay.
February 22nd, 2011 | RETIREMENT
Q: I am a CSRS employee who was disabled in 1984. I was approved for CSRS disability retirement on Jan. 24, 1985. I was approved for OWCP benefits. Now at 62 I am told I should convert from USDOL/OWVP compensation to disability retirement benefit. How does one compute the basic annuity? My retirement computed to Jan. 28, 1985, was as follows: $25,293 (high 3) for five years and four months of service which gave a basic annuity of $ 2,044, which computed to $843 per month. How much would that compute to in 2011?
A: Your annuity would be based on what it would have been had you retired on the date you went on workers comp, increased by any retiree cost-of living adjustments that have occurred since then. You’ll find a complete inventory of COLAs at www1.opm.gov/retire/annuity/cola/colalist.asp.
February 2nd, 2011 | RETIREMENT
Q: I am considering retirement after I have 30 years of service in two years. I will be 54 then. Can I begin drawing an annuity when I reach MRA (56) without penalty? Is there anyway to sustain FEHB coverage? Will I receive COLAs in the future under this scenario?
A: You can’t retire at age 54. What you could do is resign from the government and apply for an age penalty-free deferred annuity at age 56. You would be entitled to any cost-of-living-adjustment made after you reach age 62. Note: You would not be able to re-enroll in the Federal Employees Health Benefits program. No one who retires on a deferred annuity can do that.