Ask The Experts: Retirement

By Reg Jones

6(c) coverage and retirement

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Q. I joined the Marine Corps in 1988, served until 1992 and bought back my deposit. I then worked under federal law enforcement — 6(c) coverage — until 2001, when I transferred to a non-6(c) covered position until 2004, with no break in service. I then immediately obtained a position under the 6(c) provisions with no breaks in service as a special agent and am still employed. I am 43 years old and will have 32 years of federal service at age 50.

At what age can I switch to a non-6(c) position and still retire with the law enforcement/firefighter retirement? Am I correct that I can switch to a non-6(c) covered position at 46 because I will have 20 years under the covered 6C provision and still retire at 50?

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Retiring at 30 years with FERS

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Q. I am a FERS employee with 22 years of service. I will have 30 years of service in eight more years and will also be 50. Can I retire with 30 years of service and collect (i.e., request an early retirement package)? I’ve read the deferred retirement, but my understanding is I would not be able to receive a pension until my MRA, 57.

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FERS, special retirement supplement and reduction in force

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Q. I have 29 years of federal service and am 50 and under FERS.

If I am involuntarily separated by a reduction in force at age 50, do I get the FERS Social Security bridge along with my Discontinued Service Retirement, or do I have to wait until I turn 56 to collect the bridge portion of my retirement? Does this start automatically with the DSR, or do I have to apply for the bridge with SSA when I am 56?

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Deferred retirement

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Q. I’m considering resigning from federal service because I’ve been unable to find a federal job at my husband’s new job location across the country. I have career status with 18 years of total federal service, six of which was bought back military time. I was born in 1959, so my minimum retirement age is 56; I’m 53 now. If I resign now with the intention of taking a deferred annuity when I reach 62, do I do anything in the process of separating that might affect my ability to return to the federal workforce? It’s my understanding that I don’t apply for the deferred retirement until I’m ready to receive it.

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Options for leaving federal work at 48

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Q. I am 48 and have 30 years of federal service. I work for the Department of Veterans Affairs and have not heard any discussions about buyouts, early outs, etc. What options do I have for early retirement, buyout, resign, etc.? In my opinion, if someone has worked 30 consecutive years, there should be no minimum retirement age.

A. That may be your opinion, but it isn’t the law. If you want to leave before you meet the age and service requirements to retire, you can do that. You only option would be to apply for a deferred retirement at age 62.

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Deferred VSIP

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Q. I retired under CSRS at Wright-Patterson Air Force Base, Ohio, on Aug. 31 and I deferred my Voluntary Separation Incentive Payment to 2013. The first installed payment is supposed to be six months after retirement. I have not received any notification that a payment will be made. Do I contact the Office of Personnel Management, or does this payment come from another agency?

A. OPM has nothing to do with it. You’ll have to contact your former agency.

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Deferred annuity

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Q. I was separated by a reduction in force in March 1996. I left all retirement dollars in CSRS. I have more than 21 years of combined federal service from the Department of the Army and Department of Energy. I am 56. Can I apply for a deferred retirement at age 60 (with over 20 years service) since my separation from DOE was due to a reduction in force, or do I have to wait until age 62 to apply for my deferred retirement?

A. As a former CSRS employee, your only option is to apply for a deferred annuity at age 62.

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Deferred retirement eligibility

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Q. I have 26 years of federal service under FERS. I am 51 years old.  I would like to leave federal government.  Am I eligible to apply for a deferred retirement? If so, how is my penalty calculated?

A. Because you have at least 20 years of service, you could resign and apply for a deferred retirement at age 60. Your annuity would be calculated using the standard formula: 0.01 x your high-3 x your years and full months of service. Your high-3 would be determined by your highest three consecutive years of average salary on the day you left.

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VERA eligibility

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Q. I am a federal agent with the Department of Homeland Security. I have 18 years on and am 47 years old. If the furlough goes into effect, and they offer early-outs, is there a way for me to take it? Will I lose a huge chunk of my retirement? Will the deferred annuity work for me? I have a couple of prospects for private-sector employment with great benefit packages. I just would like to know is it worth staying the last two years.

A. You don’t meet the age and service requirements for early retirement: age 50 with 20 years or at any age with 25. Your options are to stay until you are eligible for the enhanced law enforcement officer retirement benefit or leave and apply for a deferred retirement when you reach age 62, which would be computed using the standard annuity formula.

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Deferred retirement

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Q. When I was 50, I left government service with 13 years paid into CSRS and was told at 62 I would be eligible for CSRS retirement benefits.

I received a statement from OPM saying I can make a deposit to get credit for seven years of nondeduction service by paying into the retirement system. I am 60 now and will have 20 years of service after paying. Am I eligible to start receiving retirement pay now, or must I wait until I am 62?

A. Yes, you can make a deposit to get credit for those seven years. No, you can’t receive a deferred retirement at age 60. CSRS deferred retirement benefits begin at age 62.

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Deferred retirement

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Q. I am a full-time letter carrier with 25 years of service at 50 years of age. I am having health issues and have trouble completing my job. I am considering deferred retirement this month. As I understand, I’ll lose my health insurance, but I can apply for my FERS retirement at my minimum retirement age of 56 with no penalty. What is your opinion?

A. Unfortunately, you are mistaken. If you resigned and applied for a deferred retirement at age 56, your annuity would be reduced by 5 percent for every year you were under age 60 (5/12 percent per month). If you wanted to receive an unreduced deferred annuity, you’d have to wait until you were age 60. If health issues are making it difficult for you to carry out the essential elements of your job, you should apply for FERS disability retirement. If you do that, you’d also need to apply for Social Security disability benefits, otherwise the Office of Personnel Management wouldn’t review your application.

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Term employee benefits

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Q. I am 58 years old and am separating from a Department of Interior agency due to a term employment expiration. I have 10 years in the federal system: six years as a permanent employee and four years as a term employee. The permanent position was as a GS 11 Step 3, and the term position is a GS-12 Step 5.

I am trying to find information regarding retirement options. Where can I look for this kind of information? Specifically, I’d like to calculate how much I may receive if I start taking a pension now, and how much I would be eligible for if I hold off until I’m 62 years old, four years from now.

A. Go to www.opm.gov/retire/pubs/handbook/hod.htm and review chapters 42 (MRA+10 Retirement) and 45 (Deferred Retirement). Then review the FERS portion of chapter 50 (Computation of Annuity Under the General Formula).

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Employment after retiring

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Q. I will turn 62 in March and was planning on retiring with 22 years of service under CSRS. A job opportunity may come available before then, and I’m trying to figure out my options. If I retired now, would there be a significant difference in my annuity because I haven’t turned 62? Should I consider a deferred retirement? If so, until when? Should I keep my federal health benefits even though the new job will have better coverage? I probably will only work there for about five years — the minimum time to become vested in the 401(k) plan — so I will not qualify for any substantial retirement there.

A. Because you already have 20 years of service, you can retire any time you want. Each month you work adds 1/6 percent to your annuity when you retire. So if you retired six months before you were age 62, your annuity would be 1 percent less; if you worked six months past age 62, it would be 1 percent more.

Resigning and later applying for a deferred annuity would make no sense because you wouldn’t be able to re-enroll in the Federal Employees Health Benefits program. The same is true if you dropped that coverage when you took a private-sector job.

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Combine Postal, reserve service?

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Q. I am a postal employee looking to continue my service with the Army Reserve. Child care cost is about to pass my income level with the Postal Service. With my wife as the main bread winner, we are considering having me separate from the Postal Service to be a homemaker. I have 15 years with the Postal Service and some military time. If I enter the Army Reserve, could I combine my Postal Service years with the reserve retirement?

A. No, you can’t. There is no provision in law that would permit you to get credit for your civilian service. In order not to lose the benefit you have already accrued as a Postal Service employee, you might want to leave your retirement contributions in the retirement fund when you resign. Then, at age 62, you could apply for a deferred retirement.

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FERS sick leave credit

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Q. How does the new law that provides sick leave credit for longevity operate with immediate, postponed and deferred retirement? Can you get this sick leave credit for service longevity under each of these three categories of retirement?

A. No. It only applies to immediate and postponed annuities. The latter is included because it’s actually an immediate annuity, where the receipt of the annuity is postponed to a later date.

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Deferred retirement after termination

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Q. I was terminated from my position due to unacceptable performance (not misconduct or delinquency). I was a FERS employee with 12 continuous years of service. Will I be eligible to collect a deferred retirement?

A. As long as you leave your contributions in the retirement fund, you can apply for a deferred annuity at age 62. That annuity will be based on your years and full months of service and your high-3 on the day you were terminated.

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MRA+10 and restarting FEHB

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Q. Where is information on the MRA+10 deferred retirement and restarting your FEHB? This is news to me, and I want to get it right. I haven’t done serious retirement counseling for a while. Since the Transportation Security Administration is now 10 years old, lots of employees are eligible for MRA+10 retirements.

A. Go to www.opm.gov/retire/pubs/handbook/C042.pdf and scroll to Section 42A4.1.1F.

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Special retirement supplement

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Q. I am a federal employee with the Department of Justice, non-law enforcement, and will have 30 years of service at age 54, approximately two years before my minimum retirement age. Can I leave the government before MRA with 30 years and still be eligible to receive my special retirement supplement and my FERS retirement without a penalty at my MRA? Would I still be able to collect my Thrift Savings Plan, without penalty at my MRA, or would I be required to wait until age 59½?

A. Reg: If you left government before reaching your minimum retirement age, you could apply for a deferred retirement. Because you have at least 20 years of service, you could apply for that benefit at age 60. However, as a deferred retiree, you wouldn’t be eligible for the special retirement supplement.

Mike: If you separate from service before the calendar year in which you reach age 55, the early withdrawal penalty rules will apply to your TSP account. You may avoid the penalty by taking a series of Substantially Equal Periodic Payments, however.

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Resignation vs. retirement

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Q. The person who processes retirements at my agency told me that I could not retire with 32 years at 51 years. I am an offset employee under CSRS. I thought the Office of Personnel Management indicated that if you retire before 55 years of age, you are penalized 1/6 (no more than 2 percent for the first year and 2 percent for every after for being under 55.

So, I resigned. It’s only been a few days. The agency person said I could only retire at this age if they were offering a buyout. That seems right because I was offered a buyout about 15 years ago.

Can I file for retirement, get my benefits and health care, dental and vision care.  I think this person has it wrong. Can you explain to me?

My start date was January 1979 and I had a break of one year in 1983, but I had already worked more than four years when they put me in CSRS Offset.

Can I change my resignation from this agency to file formal retirement to Boyers, Pa.?

A. You could only retire before age 55 if you were offered either early retirement or a buyout. Anyone offered early retirement may do so if he is age 50 and has 20 years of service or at any age with 25. The annuity of that employee would, as you pointed out, be reduced by 1/6 percent for every year he was under age 55.

Any employee who is offered a buyout can accept it, regardless of whether he is eligible to retire. If he qualifies under the early retirement age and service requirements, he can do so. If he doesn’t, he can simply take the money and resign.

Because you resigned before being eligible to retire and had at least 20 years of service, you could apply for a deferred retirement at age 60. For the present, you would be able to continue your health and life insurance for 31 days at no cost to you. After that, you could continue your health insurance coverage under the temporary continuation of coverage provision for 18 month by paying 100 percent of the premium cost plus 2 percent.

Your life insurance would expire unless you decided to convert to an individual policy. Deferred retirees may not re-enroll in the health or life insurance programs.

Since you weren’t eligible to retire, you may want to approach your agency and ask if they would be willing to reinstate you.

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Postal Service retirement

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Q. I will be 60 years old in December and have worked for the U.S. Postal Service 24 years. The Postal Service is cutting back. If I wanted, could I or resign and defer retirement at a later date without losing accumulated benefits?

A. Because you are 60 and have at least 20 years of service, you can retire on an immediate, unreduced annuity any time you want.

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