Ask The Experts: Retirement

By Reg Jones

Earliest retirement age

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Q. I am a dual-status federal technician age 43, with 14 years of federal service and 21 years of military service. I am trying to determine how early I could retire and receive an immediate annuity. There seems to be wording that age 50, with 20 years of federal service (which I would achieve in seven years), surpasses a threshold where this is possible, but additional wording is confusing (see below).

Does this mean I can voluntarily depart the military (and, thus the dual-status federal technician job) at that time, or do I need to be involuntarily separated to receive the immediate annuity? The law states: “(2) after becoming 50 years of age and completing 20 years of service as such a technician, is entitled to an annuity, if the separation is by reason of either separating from the Selected Reserve or ceasing to hold the military grade specified by the Secretary concerned for the position involved, and is not by removal for cause on charges of misconduct or delinquency.”

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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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RIF and health benefits

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Q. I’m 53 with 27 years and 10 months. I could get six months of military service for Army Reserve full-time training credit. I’m in a term position. If I’m given a reduction in force, what are my options? Can I defer my retirement until my minimum retirement age of 56? If so, would I lose my health and insurance benefits? If I’m RIF’ed and do not defer, does that means I lost health benefits?

A. If you receive a RIF notice, you have two choices. You can either sit tight and see if you are going to be separated, or you can take early retirement. If you are going to be involuntarily separated, you can still retire. Whether your retirement was voluntary or involuntary, the age penalty would be waived. Therefore, there wouldn’t be any point in retiring and postponing the receipt of your annuity to a later date. As for your Federal Employees Health Benefits coverage, as long as you were enrolled in the program before the RIF was announced, you could carry it into retirement.

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Severance pay and deferred annuity

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Q. If a FERS employee is eligible for a deferred retirement (30 years qualifying service but not yet at minimum retirement age) but is involuntarily separated (instead of resigning) and receives severance pay upon separation, can he still file for and receive a deferred retirement later upon attaining his MRA?

Also, is it true that a deferred annuity is not subject to reduction if applied for at MRA when the employee had at least 30 years of service?

A. Yes and yes.

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Removal from federal service

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Q. I’m in an upper management position with the Transportation Security Administration for the past 10 years. Recently, I have heard that my immediate supervisor is proposing my removal from federal service. If I get removed, will I lose my federal pension or will I be able to collect it when I reach retirement age?

A. If you don’t take a refund of your retirement contributions, you could apply for a deferred annuity at age 62.

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VERA/VSIP vs. military retired pay

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Q. I’m a civil service employee covered by FERS. My agency is offering Voluntary Early Retirement Authority/Voluntary Separation Incentive Pay. I am 62 and receiving military retired pay. I’ve been told that I’m not eligible for either VERA or VSIP because I’m receiving military retired pay. Is that true?

A. Not that I’m aware of. According to the Office of Personnel Management:

Employees in the following categories are not eligible for VSIP. Employees who:

1. Are re-employed annuitants;

2. Have a disability such that the individual is or would be eligible for disability retirement;

3. Have received a decision notice of involuntary separation for misconduct or poor performance;

4. Previously received any VSIP from the federal government;

5. During the 36-month period preceding the date of separation, performed service for which a student loan repayment benefit was paid, or is to be paid;

6. During the 24-month period preceding the date of separation, performed service for which a recruitment or relocation incentive was paid, or is to be paid; and

7. During the 12-month period preceding the date of separation, performed service for which a retention incentive was paid, or is to be paid.

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FEHB after involuntary separation

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Q. I was released from the Postal Service involuntarily after about 6½ years. My steward informed me that my health benefit continues for one year after separation. Also, she told me that if I am reinstated, any back premiums will be repaid from any back pay I may receive or they will make up for them during this time by taking it from my paychecks. I was hired with a 10-point veterans preference (under 30 percent) compensation.  Is this correct?

A. Unless your steward knows something that I don’t know, here’s what will happen: You’ll get a 31-day extension of health benefits coverage at no cost to you. After that, you’ll be able to continue that coverage under the Temporary Continuation of Coverage provision of law for up to 18 months. However, you’ll be required to pay 100 percent of the premiums for that coverage — both your own and your agency’s — plus 2 percent for administrative expenses. You’ll pay those premiums to your agency.

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Severance pay

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Q. I am 59 with 23 years of civilian service under FERS. My organization gave me a management-directed reassignment outside this area (from Virginia to Kansas). I was given 10 calendar days to agree to move or be involuntarily separated through no fault of my own. Am I eligible for severance pay?

A. Yes.

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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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Involuntary separation

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Q. I am 54 with 20 years of service under FERS.  I’ve been offered the Voluntary Separation Incentive Payments/Voluntary Early Retirement Authority,  but do not want to retire yet.  I would not receive much in retirement.  What are my rights under involuntary separation?

A. If you were involuntarily separated, you would be eligible for immediate retirement, just as you would if you accepted an offer of voluntary retirement and/or a buyout. In the same way, you’d receive the special retirement supplement when you reach your minimum retirement age. Because you would be eligible for an immediate annuity when you separated, you wouldn’t be entitled to severance pay.

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MRA+10 and penalties

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 Q. I am being involuntarily separated from Nonappropriated Fund service due to my position being abolished. I retained Federal Employees Retirement Service when I became an NAF employee. I am 55 years old with more than 10 years of creditable service and will be Minimum Retirement Age+10 eligible when I turn 56. Will I be penalized 5 percent for every year under the age of 62 if I apply for MRA+10 retirement? My retirement will be a result of being involuntarily separated. Will I be eligible for any Social Security benefits?

 A. If you are separated before you reach your MRA, you would only be eligible for a deferred retirement when you reach age 62. If your separation is delayed until you reach your MRA, you could retire under the MRA+10 provision. However, your annuity would be reduced by 5 percent for every year you were under age 62, unless you delayed the receipt of your annuity to a later date to reduce or eliminate the age penalty. In neither case would you be eligible for the special retirement supplement, which approximates the Social Security benefit you earned while a FERS employee. The earliest you would be eligible for a Social Security benefit is when you reach age 62.

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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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Involuntary retirement

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Q. I am currently 48 years of age with 30 years of federal service.  I am covered under the FERS retirement system.  If I am unable to meet the conditions of my employment, I will be suspended indefinitely.  Unfortunately, my organization does not offer reassignments to other positions, so I would be faced with being involuntarily separated.  If this involuntary separation occurs, would I be eligible for early retirement without penalty because I have 30 years of service?

A. Yes, if you are involuntarily separated because such things as unacceptable performance or failure to continue to meet the qualification requirements of your job, provided that your separation is nondisciplinary. However, you would not qualify for involuntary retirement if you you are separated for misconduct or delinquency, as determined by OPM.

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Benefits for involuntary separation?

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Q: I am an air traffic controller (ATC) with the Defense Department. I’m 53 years old and have met eligibility for the optional retirement. I have been deemed permanently medically disqualified to perform ATC duties due to prescribed medication for a stress-related disorder. A lot of what I’m reading tells me I am facing involuntary separation, which qualifies me for discontinued service retirement if my local human resources agency cannot find a alternate position due to my limited qualifications and my grade (I’m a GS-12 with less than a bachelor’s degree and I’m only experienced in ATC, live-fire range operations and airfield base operations). In your interpretation of the rules, would my situation entitle me to any type of special benefits?

A: I’m not aware of any special benefits that would be available to an employee who is eligible for voluntary retirement but elects instead to be separated involuntarily. If there are any, your agency’s personnel office would be the best place to find out about them.

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Involuntary separation

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Q: If you were a Federal Employees Retirement System dual status federal technician in the Air National Guard and
were non-retained at age 50 with 28 years of service (discontinued service retirement), can you qualify for disability retirement if you have a disabling condition? Or must you take the standard FERS 1 percent high-3 retirement?

A: If you are involuntarily separated from technician service after reaching age 50 and having 25 years of service, you are entitled to an immediate annuity, which would be computed using the standard FERS formula. If that separation is due to a disability that disqualifies you from membership in a reserve component or from holding your military grade, you may retire under the disability provisions as long as you aren’t appointed to another position in the federal government of have declined an offer of a position at the same grade or pay within your agency’s commuting area.

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Deferred retirement after involuntary separation

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Q: I have a co-worker who is under the Federal Employees Retirement System. She has a little more than 24 years of federal service and just turned 49. She has gone through two performance improvement periods and is facing the possibility of involuntary separation because of performance issues.

She has been given a notice of intention to separate her from service. She responded with some reasons why it shouldn’t happen at all and also with other possible solutions, such as a downgrade and/or transfer, or putting her on leave/leave without pay until she is eligible for a discontinued service retirement. If her proposal is denied and the final decision is to remove her from service immediately, would she still be eligible for a deferred retirement? Would she have to apply for that retirement before her separation date? And, because she has more than 20 years of service, would she be able to start getting the annuity at her minimum retirement age of 56?

A: If she is involuntarily separated, she could apply for a deferred retirement. Because she has at least 20 years of creditable service, she would be eligible for that benefit at age 60 and could apply for it when she is a few months away from her 60th birthday. Her local personnel office can provide her with the information needed to do that.

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