Ask The Experts: Retirement

By Reg Jones

Transferring from LEO to non-LEO

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Q. I have been under FERS law enforcement officer provision for 13 years. I am planning to change my job to another federal position which is not covered under LEO provision.

I am 43 and plan to retire at my minimum retirement age of 57 with total of 27 years of federal service (13 LEO and 14 non -LEO).

When I retire at my MRA, what will be the retirement calculation for 13 years of LEO service — 1.7 percent per year or standard 1 percent?

A. Your annuity will be computed using the standard formula (0.01 x high-3 x years of service). Only those who have completed 20 years of covered service will have their annuities computed using the more generous formula.

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Minimum retirement age

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Q. If an employee has 31 years of creditable service and is 55, can he retire if there is no early out or buyout going on?

A. If the employee is covered by CSRS, yes. If covered by FERS, it depends. The minimum retirement age for FERS employees ranges from 55 to 57, depending on their year of birth.

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Unused sick leave

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Q. I am a TransFERS employee with 12 years of CSRS service and 25 years of FERS service. At the time I transferred, I had approximately 600 hours of unused sick leave. I now have approximately 1,400 hours of unused sick leave. I understand that I would receive credit for the 600 hours earned under CSRS and credit for half of the balance earned under FERS. Will the 600 hours be credited as extra CSRS time and be subject to the 2 percent multiplier or will it all be tacked onto my FERS time and subject to the 1 percent multiplier?

A. Sick leave hours up to the maximum number you had when you transferred to FERS will be added to your actual CSRS service and computed using the CSRS formula. Because you are retiring before Jan. 1, 2014, half of any remaining hours of sick leave will added to your actual FERS service and computed using the FERS formula.

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Retirement payments for leave

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Q. I will be retiring in approximately 15 months under FERS. I will be 65 at that time and I am wondering whether I will receive a lump-sum check for my annual leave and a separate check for my sick leave? How much time does it usually take to process these checks?

A. Your agency will pay you for your unused annual leave after it closes out your account. It may accompany your last pay check or follow a few weeks later. You won’t receive any payment for unused sick leave because it doesn’t have any cash value. However, if you retire before Jan. 1, 2014, half of that unused sick leave will be added to you actual service and used in the computation of your annuity. If you retire on or after that date, you’ll get credit for all of it.

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Voluntary early retirement

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Q. I am 57 years old with 26.9 years under FERS. I am past the minimum retirement age. Would I receive the bridge to Social Security if I retired before any early retirement offers? I know there is a penalty on FERS because I do not have 30 years.

A. No, you wouldn’t receive the special retirement supplement. No one who retires under the MRA+10 provision can. Further, you need to be aware that your annuity would be reduced by 5 percent for every year you were under age 62 (5/12 percent per month). You could, of course, retire and delay the receipt of your annuity to a later date to reduce or eliminate the age penalty.

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Leaving firefighter retirement

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Q. I have 11 years as a primary firefighter covered under FERS. I am thinking of applying to a nonfirefighter covered position. Can I come back to a primary or secondary firefighter position and still be covered under the special firefighter position? Even if I am past 37 years old?

A. You could if anyone would hire you into a covered position. However, the longer you wait before returning, the less likely that would be.

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FERS creditable service from agricultural work

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Q. When I was a child, I worked harvesting fruit for an agricultural research facility at a land-grant university. My father worked there and received CSRS credit so I’m confident that salaried employees received creditable service. I have Social Security records showing my earnings from 1969 to 1975, but I was paid by the amount of fruit harvested, not by the hour. Would this be creditable service and what type of documentation would I need to have? Do you have any suggestions on where such records would be archived?

A. I can find nothing suggesting that the time you spent harvesting fruit would be considered creditable service. However, to be sure, you can check with the National Personnel Records Center. Start be going to www.archives.gov/st-louis/civilian-personnel. There you’ll get directions on how to access its archives.

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Deferred annuity

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Q. I worked for the Veterans Affairs Department for 10 years from 1988 to 1999. I left my FERS contributions in the fund when I left. Will I be able to collect any pension at any time?

A. You will be eligible for a deferred annuity at age 62.

 

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GS vs. NAF

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Q. I have been a GS (FERS) employee for 22 years, age 44. I currently work for the Department of Homeland Security. I want to work overseas again (I worked for the Defense department in Germany about 10 years ago) and found a job that seems like a perfect fit. The problem is that it’s a nonappropriated fund job.

When transferring from a non-DoD GS job to a NAF job: Will I still earn five weeks of annual leave per year? Will my sick leave balance transfer over? Would I still make contributions to FERS and TSP?

When transferring back from a NAF job to either a DoD job or another agency: Will my leave balances transfer back?  Will my rate of leave accrual still be five weeks of annual leave per year? Will I basically be able to “pick up where I left off” as far as time in service goes, under FERS? In other words, if I’ve already worked 22 years as a GS (starting at age 22), go work under NAF for three years, and then go back to a GS job for 15 years, I assume I would retire with 37 years of service instead of 40, at age 62? Is there anything else to be aware of?

A. We are only able to answer questions about federal civilian employment under Title 5. We don’t know what the consequences would be if you were to move to a NAF position. You’ll have to ask your prospective employer.

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Deferred retirement

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Q. Can I carry health insurance into retirement if I defer retirement at age 54 (my minimum retirement age is 56 years) and start an annuity (to pay for the FEHB) at the time of my deferred retirement? The following are given: I will be age 54 years in May. I have 32 years of government service. I have had continuous FEHB coverage for the past five years and more.

A. No. Deferred retirees can neither continue their FEHB enrollment when they leave government nor may they re-enroll when they begin receiving their annuity. They will, however, receive a 31-day extension of coverage when they leave and have the opportunity to continuing their coverage for up to 18 months under the temporary continuation of coverage provision of law.

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Approaching five years of service

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Q. I’m approaching five years of federal service, which means I will be vested in my FERS annuity. I have a job offer with a state government entity that would like me to start before I am vested.  Can I use annual leave to get me to the five- year mark for vesting purposes?  If not, what happens to the .8 percent, do I get it paid out?  Does making it to five years affect a future return to federal service?

A. Your unused annual leave can’t be added to your service time to make you eligible for a future annuity. You must have served a full five years for that to happen. If you do leave before being vested, you can either leave your retirement contributions in the retirement fund or request a refund of your contributions. If you do that and later return to work for the federal government, you could redeposit the money, plus accrued interest, and get credit for that period of service. Whether you are vested or not vested when you leave wouldn’t have any affect on your re-employment possibilities if you decided to return to work for the federal government.

 

 

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No step increase

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Q: I have a little more than 11 years of military active-duty time and two years FERS time in law enforcement. I’m going to send off my RI 20-97 in a day or two. If I make a lump-sum payment, will my GS-6 step 3 (current pay grade) increase to a step 8 (pay grade at 13 years service)?

A: No, it won’t. However, making the deposit will increase your length of service and be used in your annuity computation when you retire.

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Social Security offset

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Q: I know if a FERS employee retires before age 62, he would receive a Social Security offset payment under the same rules as if receiving Social Security. Under this rule, the maximum that could be earned without a payment reduction is a little more than $14,000. If I get a job that is not in the Social Security system, such as many teachers do, will the over-14K income rule still apply?

A: Yes, the limit will apply regardless of the source of the earnings from wages or self employment.

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FERS and back pay

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Q: I retired Sept. 30. I have begun receiving my estimated annuity each month. When I begin receiving my FERS supplement, will it include the amounts not paid in the months after I retired but before OPM did my final annuity computations?

A: Yes, it will.

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Unused sick leave

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Q: As a postal worker under FERS, I will retire with 35 years service with a balance of one year of unused sick leave. Will I be credited as if I had worked 36 years? I earn $60,000 annually. How many retirement years will it take me to receive and realize the year of sick leave I turn back?

A: If you retire after December 31, 2013, you’ll get full credit for your unused sick leave. If you have 2,087 hours, you’ll receive one year’s credit in your annuity calculation. Therefore, using your figures, instead of the formula being 0.01 x $60,000 x 35, it will be 0.01 x $60,000 x 36. Since I have no idea what you are getting at with your second question, I can’t respond to it.

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Retiring LEO

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Q: I am a FERS employee who had 20 years at 6c (FF/LEO) in December. In January 2013 I will have 25 years total federal civil service (21 years 6c, 4 years non-6c, with no breaks in service). I am being told that I can retire. Is  this true? OPM and retirement state “25 years of service,” not 25 years of 6c?

A: A FERS law enforcement officer can retire at age 50 with 20 years of covered service or at any age with 25 years of covered service. If you are under age 50, a combination of covered and non-covered service wouldn’t make you eligible to retire.

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Leave accrual

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Q: I retired from the Air Force in 1998, after 26 years and two months of service. In September 2000 I started a civil service career; and immediately started paying the deposit of the military buyback to secure all of my military service, (completed by April 2003). I am trying to ascertain whether I should have been placed in the CSRS Offset pension program, and started acquiring eight hours annual leave per pay period. I am 57 and preparing for retirement in about three years and trying to ensure my record is accurately reflecting my benefits.

A: Because you were first employed after Dec. 31, 1987, you were automatically placed in FERS. As someone receiving military retired pay, you would only be entitled to credit for that time in determining your leave accrual rate if that pay was awarded on account of a service-connected disability either incurred in combat with an enemy of the U.S. or caused by an instrumentality of war and incurred in the line of duty during a period of war.

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Retired military

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Q: I am 63 and a retired Marine. I started working for the VA in September of 2009 and decided not to participate in a buyback. There is a FERS deduction taken from my pay. Will I be eligible for retirement under FERS? If so, when?

A: You would be eligible for an annuity after you have completed five years of FERS service.

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LWOP and benefits

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Q: I will be on long-term 12 to 18 months of LWOP. Can you tell me the impact on my retirement (FERS), health benefits, life insurance and any taxes due. How do I pay these premiums to continue my benefits in the future, especially when I retire.

A: The answers to all your questions except taxes due will be found at www.opm.gov/oca/leave/HTML/LWOP_eff.asp. For the tax question, you’ll have to go to the Internal Revenue Service.

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Future pension

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Q: If I left federal service (FERS) at age 56 with 14 years of service, would I be eligible for a FERS pension at age 62?

A: If you didn’t take a refund of your retirement contributions, you’d be eligible for a deferred annuity at age 62.

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