Ask The Experts: Retirement

By Reg Jones

Workers’ compensation rules

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Q. I have been an 1811 status (federal agent) federal employee for 16 years. I have been on leave without pay and receiving workers’ compensation for the past year due to an on-the-job injury.

I have received little if any guidance from my agency’s HR, as the representatives admit they have little or no experience with workers’ comp.

What should I do to maintain the best possible benefits for me and my family if this becomes a long-term/permanent situation and I am not able to return to work? And if I can return to work, how would the time on workers’ comp affect my retirement benefits etc.?

What survivor benefits will my spouse have if I die while on workers’ comp?

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Leave without pay and injury

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Q. I am a federal employee under FERS. I have 13 years of service with a minimum of 10 years to become eligible for regular retirement. Due to an injury, I was on leave without pay for several months, then returned to work overseas. After I was on the job eight months, my condition manifested in physical symptoms, at which point my physician recommended that I take leave. My employer approved sick and annual leave but said I was ineligible for LWOP because I was overseas. I am still on my own leave, but it will soon be exhausted, and I am not cleared to return to work.

Are federal employees eligible for LWOP while assigned outside the United States? Also, what are my options for early retirement?

A. The granting of LWOP is entirely in the hands of your agency. It makes the decision about whether, when and where it can be granted.

The only option that could result in your receiving an immediate annuity would be if you were approved for disability retirement. Your agency is required to explain the process and help you fill out the paperwork.

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Disability and leave without pay

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Q. If an employee has a disability (schizophrenia), can the employee request two years of leave without pay to get away from a hostile work environment due to co-workers?

A. An employee may make such a request. Whether it would be granted would be up to the agency. Depending on the employee’s ability to provide useful and efficient service, the agency might recommend that the employee file for disability retirement instead.

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Military disability

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Q. I know that if the military loses membership due to medical reasons, they get processed out on the technician side and apply for the 60/40. If I am a federal civilian technician and I become medically unable to return to work, am I eligible for the same 60/40 disability? I am just curious about my entitlements since I have been out of work medically almost 6 months.

A. You would have to apply for disability retirement.

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Disability retirement

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Q. I am 51 (I turn 52 in April) and have been a law enforcement officer for 23 years, plus four years of military time that I bought back. Because of torn retinas, I have lost all depth perception permanently and have been placed on light duty pending further medical review. I will likely be ruled unable to perform in a law enforcement position and unfit for duty. I wasn’t planning on retiring, but now it might be forced on me with a FERS disability retirement. If that is the case, what is better — to just retire voluntary, before they rule on me, or wait and go out on a disability retirement? I’m also confused on the SS supplement, unless you lose that because you’ll get SS benefits too.

A. Retiring voluntarily is a certain thing. Applying for disability retirement isn’t. There’s more paperwork involved, a longer wait for a determination and uncertainty about whether your application will be approved.

Assuming that either way would result in your retirement, you can check the math to find out which one makes better financial sense. As a regular retiree, you’d receive 34 percent of your high-3, plus the special retirement supplement once you reached your minimum retirement age. As a disability retiree, during the first 12 months you’d receive 60 percent of your high-3 minus 100 percent of any Social Security disability benefit you were entitled to. From that point forward, you’d receive 40 percent of your high-3 minus 60 percent of any Social Security disability benefit.

You wouldn’t be entitled to the special retirement supplement, even if you weren’t approved for a Social Security disability benefit.

Note: The standards for a Social Security disability benefit are much higher than those for FERS disability retirement. In the latter case, you only have to be sufficiently disabled that you can’t perform useful and efficient service in your own job or one of similar grade and/or pay. In the former, you have to be completely disabled for all gainful employment.

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Termination/resignation and disability retirement

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Q. I am 60 and was hospitalized in March. I used all my sick and vacation leave because of a medical condition that will last more than a year, used all my FMLA and have applied for disability retirement. I got a call from the nurse executive that if they don’t receive a letter from me within five days that I am resigning, they will have to terminate my federal service, since they say I am AWOL. This same executive in May completed the supervisor portion of my disability retirement application. Can they fire me even though I have applied for disability retirement?

A. Yes. However, whether you resign or they separate you, it won’t affect your application for disability retirement.

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FERS disability retirement

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Q. I have eight years of active service in the Army. I am not retired from the Army. I do not get Social Security. I made the post-56 deposit lump sum before the interest date. I have 10 years’ civil service with the Department of the Army. I was retired for disability March 12, 2010. OPM recently sent my retirement packet — two years and four months later. The packet doesn’t include my military service in the time-in-service computation or the $3,640 paid in to the contribution dollar amount of annuity. My annuity is much less than estimated due to this, I believe. Had I continued service, I would have been eligible to retire at 56½ with full benefits and received more annuity for the pre-Social Security years.

OPM’s customer service stated you don’t get credit for service on disability retirement under FERS until age 62. My understanding is the FERS buyback doesn’t affect annuity after Social Security age and is always included as service.

Is this correct? Should my military buyback time be in the disability annuity computation after the first year of disability? If not, where does the money go that I paid in? Am I entitled to a refund? If I won’t realize any benefit from this deposit due to Social Security offset, something is amiss here; please advise.

A. FERS disability retirement benefits are based on a simple formula, which doesn’t include years of service. As a disability annuitant, you’d receive 60 percent of your high-3 minus 100 percent of any Social Security disability benefit to which you were entitled. After the first 12 months, you’d receive 40 percent of your high-3 minus 60 percent of any Social Security disability benefits. At 62, your disability annuity would be converted to a regular annuity as if you had continued working. At that point, the deposit you made to get credit for active-duty service would be added onto your actual service and time spent on the disability roll and computed using the standard FERS formula.

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Disability retirement

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Q. If I’ve been granted disability retirement from OPM, can the agency I worked for take it away?

A. No.

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Survivor annuity payments

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Q. I retired on disability about five years ago. I am in CSRS. My annuity statement shows no deduction for the survivor annuity. However, when I got the personalized little book they give you when you retire, it mentions the survivor annuity and how much my wife would get. Am I missing something? Is my wife covered by the survivor annuity I provided? And if this is an OPM snafu, how do I correct it?

Also will I be on the hook to pay back any premiums I would have paid to provide the survivor annuity?

A. Yes, your wife is covered. At retirement, your own annuity was permanently reduced to provide for the survivor annuity.

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USPS re-employment after disability retirement

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Q. I am 58 and was a FERS employee at the USPS for 27 years. I have been on disability retirement for 10 months and am still receiving interim payments from OPM. My case has not been finalized. I am now found medically recovered by my doctor and have been released to return to work at the USPS. OPM has told me that I am eligible to return to work at the USPS. I retired as Postmaster EAS 18. OPM stated that I should find a job that I am interested in that is the same level that I retired as and let someone in the USPS know I am interested in returning to work in that position. Is this correct, and if so, what will I have to do to make sure that my annuity is correct if I work for another five-plus years?

A. What you were told is correct; however, while you are eligible for priority referral for a position, it doesn’t mean your former agency must or will offer you your former position or place you in another one. It simply means that you will be considered for any vacancy for which you are qualified. To exercise this right, you must apply directly to your agency for a specific vacancy. You can do that at any time after receiving a notice of recovery from OPM, but no later than one year after your disability annuity has been terminated. If you are rehired, your original employment records will be called up and any future service will be added to it, thus ensuring that your annuity will be correct when you retire again.

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Disability retirement

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Q. I am a 56-year-old retired military man. I have 10 years in with civil service. I have filed for military disability due to health problems associated with my military career. Can I draw 100 percent disability from the VA and file for disability from my civil service job and Social Security? If so, how does one calculate the resulting monthly payment?

A. If you are approved for disability retirement, your annuity for the first 12 months would be 60 percent of your high-3, minus 100 percent of any Social Security disability benefit to which you are entitled. After that, your annuity would be 40 percent of your high-3, minus 60 percent of any Social Security disability benefit. Assuming that you continued to be disabled, at age 60 your annuity would be recomputed to include all of your service and the years you were on disability retirement. Any VA disability benefit you might be entitled to wouldn’t affect your FERS annuity. However, since this is a site for federal employees and retirees, I don’t know if there would be any negative interaction between that military service-based VA disability benefit and any Social Security disability benefit.

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Civilian temporary disability insurance

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Q. I was told that federal employees are not covered under temporary disability insurance. I was directed to different offices with negative results. I asked our CIVPAY office and was told that I have mandatory payroll deduction for Old Age Survivors and Disability Insurance for the past 28 years meant for disability insurance. I have submitted my disability retirement application to our civilian personnel Office at Fort Shafter, Hawaii, since December. I have depleted my personal savings and am experiencing financial hardship and I need help. Please direct me to the right office to apply for this temporary disability insurance benefit pending approval of my benefit.

A. What you were told is correct. The federal government doesn’t provide temporary disability insurance for its civilian employees. Instead, employees must use sick and annual leave or go on leave without pay.

However, the government does allow employees to donate annual leave to someone in need. Talk to a benefits specialist in your personnel office about how to get on the list of potential recipients.

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Disability retirement and redeposit

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Q. I am a CSRS employee and withdrew all pension contributions in 1995 after 15  years of service.  No redeposit has been made.  I now have another 15 years of continuous service since that withdrawal and I am now 57  years old. If a redeposit is not made:  (1) Since I am over 55 with more than 30 years of service, can I receive a disability retirement if approved or must I take a regular retirement; and (2) what is the impact on the annuity for a disability retirement (assuming it would be authorized and approved), if no redeposit is made?

A. If you were approved for disability retirement, your annuity would first be computed under the general formula, as follows:

0.015 x your high-3 x 5 years of service, plus
0.0175 x your high-3 x 5 years of service, plus
0.02 x your high-3 x your remaining years of service (5 years+)
Since that amount would be less than the guaranteed minimum, you would instead receive the lesser of:
- 40 percent of your high-3, or
- the amount obtained under the general formula after increasing your actual creditable service (15+ years) by the time remaining from the commencing date of your annuity to the date of your 60th birthday.

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DSR or disability retirement?

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Q: I lost my reserve position for medical reasons, through no fault of my own, on Aug. 27, 2010. I have been given one year to find another job. I will be 54 years old with 19.5 years of time in service by August 2011. What type of retirement would I be allowed: Discontinued service retirement or disability?

A: Disability.

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Disability retirement and nonfederal re-employment

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Q: I receive federal disability retirement from the U.S. Postal Service after 27 1/2 years of service. My disability was approved for anxiety and severe depression. During my postal career, I was a city letter carrier. I have an opportunity to take a job as a medical courier. Do you think this job will jeopardize my continuing to receive disability? The two jobs are a bit similar in nature, however the stress level of the new job would be far less. I do not want to jeopardize my disability in any way. There is no way I could ever return to the stress of the Postal Service with my mental conditions.

A: If you are under age 60 and accept a nonfederal position, your disability annuity would only be discontinued if your income from wages or self-employment was 80 percent or more of the current rate of base pay for the position you held when you went on disability retirement. If you accept a federal job, your salary will be reduced by by the amount of your disability annuity and will also be subject to the 80 percent limitation.

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Disability retirement after loss of dual status

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Q: I am a Federal Employees Retirement System dual-status federal technician in the Army National Guard. I am looking at a possible involuntary separation because of losing my dual status (nonmedical related) later this year. I am 45 years old with 12 years of federal service. Would I qualify for any type of involuntary separation/disability annuity payment?

A: You would be eligible for disability retirement if you are separated due to a disability that disqualifies you from membership in a reserve component of the armed forces or from holding the military grade required for such employment; you aren’t appointed to another position in the federal government; and you haven’t declined a reasonable offer of another position in your agency.

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Disability benefit reduction

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Q: I was hired after 1983 to a nonmilitary position. I left federal employment with a 40 percent Federal Employees Retirement System disability annuity. I was recently approved for Social Security disability. It is my understanding that per Federal Law 5 U.S.C. 8452(a)(2) that my monthly FERS disability check will be reduced by 60 percent of my Social Security disability benefit. That doesn’t seem fair. Isn’t there a bill pending in Congress that repeals this? Do you know which bill I should refer to when I contact my Congressman? 

A: That’s the law and, to the best of my knowledge, no one has ever introduced legislation to change it.

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Disability retirement basics

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Q: I am a federal employee who will soon be going in for open-heart surgery. I am 58 years old and will be 59 in March. I have until I’m 60 to reach 20 years of service for early retirement. I am also a retired E-6. What would happen if the doctor after the operation says I can no longer work? Would I be given 100 percent disability of my base pay?

A: As an employee under the Federal Employees Retirement System, if you were approved by the Office of Personnel Management for disability retirement, during the first 12 months you would receive 60 percent of your high-3 minus 100 percent of any Social Security disability benefit to which you were entitled. (You have to file for a Social Security disability benefit at the same time you file for FERS benefits.) After the first 12 months, you’d receive 40 percent of your high-3 minus 60 percent of any Social Security disability benefit.

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Considering disability retirement

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Q: I’m 56 years old, which is my minimum retirement age, with 12 years of credible service. If I applied for disability retirement, would I receive benefits based on my years of service or the “60 percent first year, 40 percent thereafter” rule? If I would only receive the “high-3″ times years of service calculation, what would be the advantage, if any, of disability retirement?

A: Because you aren’t eligible for an immediate unreduced annuity, your benefit would be calculated under disability rules. You’d receive 60 percent of your high-3 minus 100 percent of any Social Security disability benefit to which you are entitled. After 12 months, you’d receive 40 percent of your high-3 minus 60 percent of any Social Security disability benefit. Note: If you file for Federal Employees Retirement Service disability retirement, you must at the same time file for Social Security disability benefits. If you do not, the Office of Personnel Management will not process your application.

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Age 62 disability recomputation

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Q: When a person on Federal Employees Retirement System disability reaches age 62 and a recomputation is done, are the cost-of-living adjustments added to the “high-3″ salary from the regular pay schedule or from the annuity COLA schedule? My high-3 was $47,116 when I became disabled in February 2004, and I turned 62 in June 2010. I live in the Dallas-Fort Worth area. I was under the impression that COLA was determined by the GS schedule and locality pay.

A: When you reach age 62, the time your spent on the disability annuity roll will be added to your actual service. The total time will then be multiplied by 1 percent. The product will then be multiplied by your high-3 at the onset of your disability, increased by all FERS cost-of-living adjustments payable from that time until age 62. Changes that may have occurred in the salary of your previous position after you retired won’t be used in this recomputation.

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