By Reg Jones
March 4th, 2013 | Uncategorized
Q. I’ve come to understand that excess retirement contributions can be had/applied in two ways for annuity purposes. One is a lump-sum return of same and the other can be applied toward my annuity over the 80 percent.
I’m a CSRS employee and will have almost 43 years of service in May. I also have more than a year’s sick leave on the books, which is another 2 percent, which puts me at 82 percent. If I chose to apply my excess to my annuity, how and what percentages would apply?
A. You would receive an annuity based on 42 years and 11 months of service (80 percent) plus however much additional annuity you would be entitled to based on your unused sick leave. Before your annuity was finalized by the Office of Personnel Management, you’d be given the option of receiving a refund of your excess retirement contributions or using that money to buy additional annuity that, like unused sick leave, isn’t subject to the 80 percent limit.
January 3rd, 2013 | Uncategorized
Q. How many years of federal service does one have to work before retiring and receiving the exact amount of pay they are getting while working? Someone said you had to work until 35 years of service to receive your full retirement pay.
A. Regardless of which retirement system you are in, it would be impossible to retire and receive an annuity that equaled what you were earning as an employee. Under FERS, even if you worked for 50 years, your annuity would only equal 55 percent of your highest three years of average salary (.011 x your high-3 x 50). Under CSRS, you would receive the maximum earned annuity of 80 percent when you completed 41 years and 11 months of service. Of course, under both retirement systems, unused sick leave would be added and allow you to receive additional annuity. And if you were a CSRS employee who continued working after 41 years and 11 months of service, you could use your excess retirement contributions to purchase additional annuity, just as you could if you had participated in the Voluntary Contributions Program. However, it’s unlikely that they would get you close to the exact amount you were earning when you retired.
July 3rd, 2012 | Uncategorized
Q. I have 44 years of civilian service under CSRS and 2,400 hours of unused sick leave. Will the year of sick leave be added to my years of service and give me 82 percent annuity or just 80 percent annuity?
A. Sick leave isn’t subject to the 80 percent annuity limit, which applies to any retiree who has reached 41 years and 11 months of service. Your unused sick leave will be added to your actual service and used to increase the amount of your annuity. Therefore, your 2,400 hours would add one year and one month to your earned annuity and increase it by 2 and 1/6 percent. Note: Because you have actual service beyond 41 years and 11 months, you’ll be given the option of receiving a refund of your excess contributions, plus interest, or purchasing additional annuity which, like unused sick leave, isn’t subject to the 80 percent limit.
May 2nd, 2012 | Uncategorized
Q. I had 38 years of federal service with the Architect of the Capitol. Will I receive the extra money paid into CSRS system six years past 32 years? How will that money be paid to me?
A. As a rule, CSRS employees have to work 41 years and 11 months to earn an annuity that equals 80 percent of their high-3. That’s the maximum amount that can be paid in an annuity based on creditable service. Only special category employees, such as law enforcement officers and firefighters, can reach the 80 percent limit with fewer years and full months of service. If you are one of them, when you retire, the Office of Personnel Management will let you know the amount of your excess contributions and offer you the option of purchasing additional annuity that isn’t subject to the 80 percent limit (like unused sick leave) or receiving your overpayment in a lump sum, plus accrued interest.
April 30th, 2012 | Uncategorized
Q. I am a career federal employee with almost 41 years of service and plan to continue my federal employment well beyond 41 years. I understand that the maximum retirement benefit for CSRS employees (excluding sick leave credit) is 80 percent and to achieve that level requires 41 years, 11 months of credible service. Since CSRS employees contribute 7 percent of their salary into their retirement fund, what happens to the 7 percent contribution after completing 41years, 11 months of service and reaching the maximum benefit of 80 percent?
A. When you retire, any excess contributions will be returned to you, with interest, with the option of purchasing additional annuity that isn’t subject to the 80 percent limit.
April 25th, 2012 | Uncategorized
Q. I have over three years of CSRS excess contributions. I plan on retiring Sept. 30 with 46 years total. Is there a form I submit to request these funds?
A. No form is needed. When you retire, the Office of Personnel Management will tell you the amount of your excess contributions and offer you a choice: Either accept a refund of those contributions, or purchase additional annuity that isn’t subject to the 80 percent limit.
Q: What interest rate is applied to excess retirement contributions under the Civil Service Retirement System when the principal is refunded in July 2010?
A: Interest rates for excess contributions are applied annually. For excess contributions made during 2010, the interest rate is 3.125 percent.
November 10th, 2009 | Uncategorized
Q: I am a federal employee with almost 50 years of service. Are the excess contributions that I have made since reaching the 80 percent maximum at 41 years, 11 months, taxable when I retire?
A: Any refund of excess contributions you made to the retirement fund won’t be taxable. You already paid taxes on them. On the other hand, any interest you receive will be taxable.
— Reg Jones