Ask The Experts: Retirement

By Reg Jones

Service computation date and FERS retirement

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Q. I am contemplating retirement with a separation date of Jan. 6, 2014. Under FERS, my creditable service for retirement (on Jan. 6, 2014) will be 29 years and two months (service computation date of Oct. 24 1984). My creditable service for RIF and leave (on Jan. 6, 2014) will be 31 years and seven months (service computation date of June 20, 1982). The estimate I have indicates the MRA+10 provision, reducing my annuity by approximately 35 percent (5 percent each year under 62; I will be 57 in January). From an eligibility standpoint, which would be the correct creditable service date to use? I understand the annuity formula (1 percent x high 3, etc); if I have at least 30 years of service and have reached MRA, why such a huge penalty when the annuity is already based on the years I was able to contribute to the annuity portion of FERS?

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Leave without pay and creditable service

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Q. In 2011, I left my civil service job for 175 days to deploy to Afghanistan as an active-duty officer. While deployed, I used a day or two of annual or military leave every pay period to pay for my health care benefits. FERS payments also were made on the days I was on paid leave.

When I got back from my deployment, I was told I had to buy back the time, and I put in paperwork with DFAS to do so. However, I just read in my agency’s furlough FAQ that: The amount of a CSRS or FERS annuity paid by the Office of Personnel Management (OPM) is based primarily on the amount of creditable service an employee performs and the employee’s high-3 average salary.

Both CSRS and FERS allow service credit for up to 6 months of nonpay status in any calendar year. If a furlough period does not cause an employee to be in a nonpay status for more than 6 months in a calendar year, the furlough period will be included as creditable service in determining the employee’s total creditable service used in the annuity computation. If the total amount of time an employee spends in a nonpay status in a calendar year exceeds 6 months, the amount of nonpay status in excess of 6 months in the calendar year will not be creditable for retirement purposes.

Based upon this, it looks like as long as I was not in a nonpay status for six months that calendar year, I do not have to buy back that time for it to count toward my retirement. Am I correct in my interpretation of this? If so, is there a way to verify how many creditable years I have?

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Federal retirement and re-employment

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Q. 1. I left the Fed in November 2011 with 22 years of creditable service (military time buyback included) and, as I am under my MRA of 56, would not be eligible for my retirement benefits without penalty until age 62, correct? 2. Can I work part time (consultant) on an agency’s payroll without affecting my current status, or would that part time add to my benefit? 3. Also, if I came back to the Fed and did three more years of full-time work before age 62, would that reinstate my health benefits?

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Creditable service and retirement benefit eligibility

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Q. Is there a minimum probation or vesting period required to be eligible to participate in FERS? Suppose a person worked for the federal government for one year, had nine years of military service and participated in the military buyback? Would this be considered 10 years of creditable service? Would the person be eligible for a retirement annuity?

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Retirement before 60

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Q. I would like to retire at between 56 and 58 with deferment until I reach age 60 and can draw my reserve retirement.

I am a gray area reservist with 20 creditable years of total service. This includes four years and two months of active duty that I bought back after I accepted a FERS position. I have been with FERS for 20 years, including buyback. Will I still be able to draw both retirements since my military retirement is a reserve retirement? In 2017, I will have 25 years, and I would like to retire no later than 2018 at 58.

How will my annuity be calculated? Do I have to retire at 60 to receive both retirements?

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Change in retirement plan

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Q. I started my employment as a CC military spouse in Germany in 1981 (no military service myself), then resigned (as we were directed) just before we returned to the U.S. in late 1983. I got picked up into a fed position in September 1984, which set the dates for leave and retirement as 1982. I had been told I was FERS at that time, and I have been contributing and planning toward that, along with attending the FERS retirement classes. However, when I received an estimate for retirement last year, I was told that I was CSRS Offset, with four years and 10 months of creditable service before being picked up in the U.S. I emailed with HR to make sure of that, and the HR person said that I was CSRS offset.

I now have 31 years of federal employment, and thought I had figured out my retirement numbers, until I received the CSRS offset news.

Since I haven’t firmly fixed a date to retire, I hadn’t really looked into it, but now I am wondering what that means exactly with regard to my retirement numbers.

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Creditable service

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Q. I worked with the government for about five years with the Peace Corps and then I was a personal services contractor for about four years (2000-2004) with the U.S. Agency for International Development. I then joined USAID as a foreign services officer doing the same job I did as a personal services contractor. USAID credited my Peace Corps time. I would like my four years as a personal services contractor with USAID to count toward my retirement since I was doing the same job that I did as a foreign services officer. What can/should I do?

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Residency and creditable service

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Q. I’m a federal employee in a Veterans Affairs Department hospital. Before actual employment, I spent three years doing medical residency in VA. Will those three years in training count toward my creditable service for retirement?

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Creditable service

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Q. I am 43 years old with 20 years of federal service: nine years as Border Patrol agent and 11 as an 1811 (Postal Inspector). Will my Border Patrol time count as out at any age with 25 years?

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Creditable service

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Q. My husband has worked for the federal government for the past 15 years after a career at the state level, and is thinking about retiring in a couple of years. When he was in his late teens, he worked summers (1965, 1966, 1967) for the Finance and Accounts Office, U.S. Army, Department of Defense. May he use those summer employment opportunities as credit toward retirement? If yes, whom would he contact to find out what he needs to do to have these credited?

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Sick leave and creditable service

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Q. I am a CSRS Offset employee in a law enforcement position. I plan to retire Sept. 1 at the age of 50 with eligibility service credit of 23 years, nine months, and 12 days. I have over 650 hours of sick leave. My computation service credit is 30 years, 11 months, and nine days without including the 650 hours of sick leave. Does including the 650 hours of sick leave to my computation service credit provide me with any additional annuity? Also, will my annuity be based on my eligibility service credit or my computation service credit?

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Five-year rule

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Q. In the 2012 Federal Retirement Handbook, it states that if you meet the following age and service requirements — age 62 and five years — you are entitled to an immediate retirement benefit.

I will be 65 years old in May, so I already meet the first requirement. In June, I will have been a federal civilian employee for two years. However, I have 12.3 years of Air Force (1971 to 1984) service, and I plan to make the required deposit so the 12.3 years becomes part of my federal creditable service. Therefore, in June, I will have 14.3 years of creditable service. Does this mean I will be eligible to retire as soon as the Air Force years become part of my creditable service (since it’s more than five years)?

Said another way, is there a requirement that you need to be a federal civilian employee for five years before you are eligible to retire? I have not been able to find anything in FERS documents or government website that stipulates this requirement. All years are typically referred to as creditable service so that includes my Air Force time.

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Annual leave and cashing out

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Q. I will have approximately 503 hours of annual leave when I retire at the end of May (183 hours were carried over). I also have 24 hours of a time off award and 30 hours of home leave unused as a result of a previous overseas assignment. Will my payout for leave include the 24 hours of the time off award added to my 503 hours? Will I receive a payout for the 30 hours of home leave, will I simply lose it, or will it be added as creditable service in my retirement calculations?

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County work and FERS annuity

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Q. I have worked for Los Angeles County for about six years. Is there anything that adds into the FERS annuity from that?

A. No.

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RIF and leave

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Q. If I am subject to a reduction in force with just under 25 years of service (say, with 24 years and nine months), can I use sick or annual leave to make up the difference? If not, is there any recourse to take a retirement in lieu of a RIF when you are so close to the 25-year threshold? I am 46 years old.

A. While you may only use sick leave for purposes spelled out in law and regulation, your agency can allow you to use your annual leave to continue past the date on which you’d be separated if it will allow you to qualify for retirement.

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Discontinued service retirement

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Q. I was injured in a severe motor vehicle accident and unable (because of doctor’s orders) to return to work.  The agency sent me a letter stating that I should return to work and violate the restrictions, apply for FERS disability, or be terminated. I chose to apply for FERS disability and was denied, and now the agency is in the process of terminating me. I am still under doctor’s restrictions. I am over age 50 and have 21 years of combined service: 16.5 military, which I bought back, and seven civil service if they count my leave without pay (six if not). Will I be entitled to discontinued service retirement?

A. Yes.

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Retirement calculation for 30+ years of service

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Q. I am a FERS employee. I have 18 years of civil service and five years of Air Force service that I bought back for a total of 23 creditable years. I will reach my 30-year service mark long before my minimum retirement age of 57½. How is retirement calculated if I decide to go past the 30 years putting me at 38½ years of civil service and the MRA of 57½? I have heard that for each year over 30 you get additional percentage points.

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12 questions on VERA

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Q. I am a letter carrier, age 52, started in 1985 and have 28 years of creditable service.

If I understand what I’ve gleaned from the posts here and the Postal Service were to offer me a Voluntary Early Retirement Authority this year,

1.  Would I begin my annuity immediately?

2.  Would I have no reductions in calculations of my annuity? (average high-3 x 1 percent x 28)

3.  Would I receive credit for half of my sick leave and all of my annual leave? (How are these applied?)

4.  Would I receive the special retirement supplement beginning at age 56 (my minimum retirement age), and receive it until I reach age 62?

5. Would I be able to continue carrying my current health and life insurance at non-USPS rates? (I couldn’t find how long these could be carried. Until death?)

6.  Could I begin receiving Social Security as early as age 62?

7. Any withdrawal from my Thrift Savings Plan prior to age 59½ would be penalized 10 percent as per Internal Revenue Service regulations? (Can I continue to contribute to TSP after retirement?)

8. As a FERS annuitant, is there no limit to what I can earn after separation from the Postal Service as it pertains to my annuity payment?

9. At age 56 (my MRA), the special retirement supplement from Social Security would begin and would be subject to yearly income limits. Would supplement payments be reduced by approximately $1 for every $2 I earned above that year’s Social Security income limit?

10. At age 65, I’d be eligible for Medicare parts A and B? (Would this affect my health insurance coverage through Federal Employees Health Benefits?)

11.  Would there be cost-of-living increases at any point for my annuity?

12.  Is there a date during the year that maximizes the benefits of retirement?

Did I get this right, and are there any other things I should know before considering a VERA if it is offered?

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Leave without pay and creditable service

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Q. As of January, I had 36 years of creditable federal service for retirement. This is based on a federal retirement benefits estimate I received from a company contracted by my agency to provide this service. I was on leave without pay while in a master’s degree program from June 23, 1984, to June 7, 1986. The company providing the benefits estimate counted all of this time as creditable for retirement. Is this correct, or would I only be allowed credit for a maximum of six months during each of the three calendar years covered by the leave without pay?

Secondly, I am in the CSRS Offset retirement program. Can I pay into my retirement program for the LWOP period, similar to what I was allowed to do for my military time? If so, where do I start? I am not in CSRS Offset because of the LWOP period but for a period between Aug. 23, 1988, and June 30, 1994, during which I taught two years at a University and completed a Ph.D. in my current field.

A. Periods of LWOP that are less than six months in a calendar year are considered to be creditable service and no deposit is required to get credit for it. LWOP that exceeds six months in a calendar year isn’t creditable service for any purpose, and you can’t make a deposit to get credit for it.

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Defer annuity or collect at MRA+10?

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Q. I am 54 and have over 26 years of creditable service under FERS. I am going to be leaving government service in the next few months. Is it better to take a reduced annuity at age 56 or wait until I can take the full annuity?

A. You don’t have a choice. If you leave government, you won’t be eligible for a deferred annuity until you reach age 60. And the only reason you won’t have to wait until age 62 for that annuity is because you have at least 20 years of service.

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