Ask The Experts: Retirement

By Reg Jones

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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Involuntary separation and pay

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Q. I’m 49, with 26 years in the NAF retirement program. I won’t be accepting a transfer of function outside my commuting area, so I’ll be involuntary separated. Based on everything I’ve read in AR215-3 3-25, I should be eligible for both discontinued service retirement and severance pay.

Severance pay would be authorized in my case since my immediate annuity will be reduced 12 percent based on my age (2 percent for every year I’m away from 55).

I’m now hearing that the following paragraph would prevent me from receiving severance pay: AR215-3 3-25 h. “Exclusions from severance pay. Severance pay will not be paid when the employee — (4) Is entitled to an immediate annuity that is not reduced because of the employee’s age at the time of retirement.”

Is this correct, or will I be authorized both DSR and Severance pay?

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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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RIF and special retirement supplement

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Q. I am a FERS employee, age 59, and have over 28 years in the Postal Service. Our facility is going through an accelerated transfer of function to a facility more than 100 miles away. If they cannot offer me a position in my same craft and I am given a notice to separate voluntarily or involuntarily, can I retire and receive an unreduced annuity and the special retirement supplement until age 62? If I retire, should I elect a discontinued service retirement or optional retirement since this is an organizational change involving reduction in force, transfer of function. Could I also receive separation pay?

A. Yes, you can retire on an annuity that wouldn’t be subject to an age penalty and entitled to the special retirement supplement. Since you would be eligible for either an optional or discontinued service retirement, you can decide which you prefer. If you elect optional retirement and later return to work for the federal government, the salary of your new position would be offset by the amount of your annuity. If you elect a DSR, your annuity would be terminated, and you would once more be a regular employee.

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Discontinued service retirement

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Q. I will be RIF’ed on July 29 with 24 years and seven months of service. Do I qualify for a discontinued service retirement? How much will my annuity be reduced? I am 43 years of age. I am covered in a law enforcement officer position. Additionally, I have six months of sick leave. Can I use this time to meet the 25-year DSR time period for any age?

A. You aren’t eligible for a discontinued service retirement. To be eligible for a DSR, you’d have to be age 50 with 20 years of service or any age with 25. Sick leave cannot be used to meet the length of service requirement.

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Discontinued service retirement

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Q. I’m 60 with 24½ years of service. I was gone on detail and my position was filled with a permanent employee. So we are now both in the same position on the org charts. They are having me do the work no one wants to do, like a directives project that was due in 2009. I have been waiting for a buyout, but can they offer me a discontinued service out and are there any benefits?

A. No, they can’t. The only way you’d be eligible for a discontinued service retirement is if your agency officially proposed to separate you, either for poor performance or through such action as the elimination of your position.

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Voluntary early retirement

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Q. I am a postmaster, age 51, with 26 years of service under FERS. I have been offered the VERA. The USPS has stated that in two years, if we haven’t been able to land another job in the executive and administrative schedule (EAS), we would be given a reduction-in-force notice and separated from service. Would I be eligible for an immediate annuity at that time under a Discontinued Service Retirement (DSR)? I realize I can’t touch TSP or receive the Social Security special retirement supplement because I will be only 53, but I would need to be able to receive an annuity to continue health benefits, correct?

A. Yes, you’d be eligible for a discontinued service retirement and, when you reach your minimum retirement age, the special retirement supplement.

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VERA, RIF and benefits

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Q. I am 52 with 28 years’ service in the Postal Service. I have been offered a VERA. If I don’t take the VERA, I can stay for two more years before I am part of a reduction in force. I have been told I will be eligible for discontinued service retirement after I receive my RIF notice. If events required me to defer retirement, would I be able to pick up health insurance when I am 56? Would I even be able to start the annuity at 56 or have to wait till I am 62?

A. Whether you accept the VERA and retire voluntarily or wait for the RIF and retire involuntarily, you’d receive an immediate annuity and be able to carry your FEHB coverage into retirement.

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Loss of driver’s license and discontinued service retirement

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Q. I am just turning 55. I have 11 years of federal civil service and am being released for loss of driver’s license due to an off-duty DUI arrest. My position description was written several years ago and does not include a driver’s license requirement, but I do drive at work regularly. I will be able to drive my own vehicle, but not a work vehicle, under my state’s driving laws.

1. Under this scenario, do I have rights for a discontinued service retirement?

2. If not, am I eligible for a deferred retirement, and what is the earliest age I could draw it?

A. If you aren’t offered a comparable position, you’ll be eligible for a discontinued service retirement. If you were covered by your FEHB plan for five consecutive years before you retire, you’d be able to carry that coverage into retirement.

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Discontinued service retirement

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Q. I am an Air Reserve technician with 32 years civil service. I will turn 55 on July 10.  I resigned from my civil service position effective the pay period ending July 14. I have, however, vacated the position effective June 22 and used various leave statuses to get me through July 14. Per FERS rules, I was planning to submit my request for federal civil service retirement 60 days prior to my 56th birthday in July 2013. In addition, I submitted my military retirement for Dec. 31, 2012 (I was required to submit a date six months in advance per Air Force Reserve Command directive on their military retirement website).  Obviously, there is a disconnect in the two retirement dates by six months. I was just told by my office that to fill my vacated position, they need to move my military retirement up by six months, in effect waiving their six-month in advance notification rule.  (Personnel apparently can’t process an action to remove me from the ART position based on my current active reserve status, even though I won’t be participating in any military duty from now until December).

I was informed I would be eligible for a discontinued service retirement if personnel involuntarily separated me from the military so they can fill the position now instead of in December. If this is true, would personnel initiate an SF 50 to process the involuntary separation? Would the Office of Personnel Management have to make the final determination (per information I’ve read in OPMs handbooks)? Is DSR even a consideration under this scenario/these circumstances?

A. Your agency would have to provide you with an official notice of involuntary separation, which they would attach to your application for retirement and send to OPM. That would qualify you for a DSR.

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Discontinued service retirement

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Q. I am 45 years old. I have been working for the federal government since June 7, 1985, approximately 27 years. Our government facility is closing its doors. I was offered a job outside of our local travel area and had to turn it down due to personal reasons. Can I still qualify for discontinued service retirement? What would the penalties be? I have plenty of years but not the age. I have performed all my employment under FERS.

A. Because the position you were offered was outside your commuting area, the fact that you turned it down wouldn’t keep you from being eligible for discontinued service retirement unless you are under a geographic mobility agreement. If you are, then you wouldn’t qualify. You’ll have to verify your status and options with your personnel office.

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Discontinued service retiree

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Q. I retired (not by choice) with 31 years under CSRS as a discontinued service retiree from Aug. 2, 2011, through Dec. 17, 2011.

I was placed on priority placement program since I declined my transfer of work to Fort Lee, Va., and subsequently was rehired into the federal workforce Dec. 19, 2011, as a GS-09 (I was a GS-11 at retirement). Therefore, I am losing about $500 per month. I am beginning to think I would have been better off staying a DSR.

How does my CSRS annuity work now? I want to know how long it will be before I can fully retire if I decide to do so. I am age 48 with 31 years of service.

I assume I am starting over again or just have the four-month break in service with the annuity recalculated.

A. As a discontinued service retiree who was involuntarily separated from the government, when you were rehired, your annuity should have stopped. From that point forward, you would be treated no differently than any other employee. As a result, you wouldn’t be able to retire again until you met the age and service requirements. On the other hand, if you were hired into a position that allowed you to keep both your annuity and the salary of your new position, you would continue to receive your annuity; however, when you left, you would get no retirement credit for that period of employment. As such, you wouldn’t be entitled to a supplemental or re-determined annuity.

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FERS LEO retirement options

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Q. I have been an 1811 under covered positions for 15 years. I also have bought back years of active-duty time.   My organization is discussing offering a Discontinued Service Retirement.  If offered this retirement would I receive: 15 years x 0.017 (25.5) x average of high three plus 10 years x 0.01 (10) x average of high three  or a total of 35.5 percent of high three plus 50 percent of my sick leave time applied to length of covered time. (This is only a couple of months – 600 hours).

A. Yes and no. While you would receive half credit for your unused sick leave, the fact that you don’t have 20 years of covered service would mean that your entire annuity would be calculated using the standard formula: 0.01 x your high-3 x all years of creditable service.

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DSR, RIF and the wrong retirement system

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Q: If you are eligible for a discontinued service retirement and you are part of a reduction-in-force, because you are on a priority placement program for a year, why can you not wait until the year is almost up to put in for your DSR?

Also, I am under the Federal Employees Retirement System, but I have money that I paid into the Civil Service Retirement System. I am not under CSRS Offset because when I was transferred the choices were not explained to me; I was just told that I had to transfer. What happens to the money that I left in my CSRS retirement when I retire (I paid in for about 14 years)?

A: If you are subject to separation in a reduction-in-force, that will happen on the date specified in your official RIF notice. There is no provision in law or regulation that would allow you to stay on board beyond that date.

On you second question, if what you say is correct, you were placed in the wrong retirement system when you returned to work for the government. You should have been put in CSRS Offset. The Federal Erroneous Retirement Coverage Corrections Act was created to deal with such erroneous enrollments. Go here to learn more about FERCCA and find out what your next steps should be.

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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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Abolished position

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Q: Under CSRS, do you still get your lump sum CSRS contributions back if they completely abolish your position, and are not offered in writing an equivalent position? This would be in addition to your full retirement benefits, minus age penalty. I am 47 1/2, with 31 years of CSRS service, and the only shop planner in my position description. They are talking about wiping out our maintenance department and contracting out. My dad retired about 15 years ago when they abolished his job, and he got his contributions back. Has this changed?

A: Because you’d be eligible for discontinued service retirement — 25 years of service at any age — you wouldn’t be able to receive a refund of your retirement contributions.

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Discontinued service retirement and annuity

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Q: If a 56-year-old Federal Employees Retirement System employee with 22 years of creditable service is involuntarily separated under a discontinued service retirement and takes the immediate annuity, does the annuity reduction of 2 percent per year for every year under age 62 apply? Does the employee also immediately qualify for the FERS annuity supplement?

A: If you take a discontinued service retirement, you won’t be penalized 5 percent (not 2 percent) for every year you are under age 62. Further, because you have reached your minimum retirement age, you will be eligible to receive the special retirement supplement.

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Discontinued service retirement

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Q: I have been affected by the National Reassessment Process by the Postal Service. I was sent home and told there is no longer work available for me within my restrictions after being accommodated for the past 11 years. Would I be eligible for discontinued service retirement, and how would I go about getting it? By the way, I am two months from turning 56 years old and I have 25+ years of service as a FERS employee.

A: You would only be eligible for discontinued service retirement if your agency sends you an official notice of intent to separate you.

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Family leave to care for aging relatives

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Q: I’m a Federal Employees Retirement Service employee, 54 years old with 25 years of service. I have a 91-year-old father with Alzheimer’s disease who requires full-time care. Is there any program where I could take an early retirement to care for him?  Also, I have an upcoming background investigation due. If I didn’t provide this, could I be fired, but still be eligible for immediate retirement?

A: Along with receiving approval for the use of annual or sick leave, you could request up to 12 weeks of unpaid leave under the Family and Medical Leave Act. Whether you would be eligible for discontinued service retirement if you were fired would depend on the nature of the action used to separate you. You’d have to discuss this with your agency before making a decision.

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Federal disability and Social Security

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Q: My husband was federal technician and served in the Air National Guard. The military discharged him because of health reasons. So he lost his federal technician job. He now receives Civil Service Retirement System disability benefits. He applied for Social Security disability. Social Security counts his CSRS disability as a public disability, so his benefit is offset and his payment is reduced to $31.00 a month. Now that he is over age 55, can he change his CSRS retirement to a CSRS annuity or discontinued service retirement? Social Security stated that if he is receiving a CSRS annuity or discontinued service retirement he will not have that offset and receive $583.00 per month.

A: If his disability annuity is terminated because he has recovered from his disability or is restored to earnings capacity and hasn’t been reemployed in a position covered by a federal retirement system, he would be eligible for an immediate annuity if he met one of the following age and service requirements: age 62 with five years of service, 60 with 20, or 55 with 30. He would be eligible for a discontinued service annuity if he has reached age 50 and has at least 20 years of creditable service or is any age with at least 25 years. If his disability annuity terminates and he doesn’t meet any of these requirements, he would be eligible for a deferred annuity at age 62.

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