Ask The Experts: Retirement

By Reg Jones

Part time after retirement

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Q. When I retire from my GS position, I plan to take a part-time position at a lower pay scale. Would I start out in the Step 1 position, or would it be at a higher step?

A. Because there is no requirement that you be hired above Step 1, it’s up to the agency that is hiring you to determine if there is any basis for placing you at a higher step. FYI, unless you are being hired into a position that allows you to receive both your full annuity and the full salary of your new position, your salary will be offset by the amount of your annuity. If it will be offset, you could end up working for next to nothing.

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Social Security offset

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Q. I am really confused by the Social Security offset. I retired from active duty in the Army after 22 years. Soon after retiring in 1998, I took a job as a letter carrier with the Postal Service. I am covered under FERS. I want to retire from the Postal Service in 2014. I will be 60 years old and have 15 years with the USPS. Will my Social Security be reduced when I am eligible at age 62? If so, by how much?

A. Because you are a FERS employee, you won’t be subject to any offset. You’ll be entitled to your military retired pay, your FERS annuity, and a Social Security benefit at age 62 that reflects all your Social Security-covered employment. However, before you get too excited, I need to tell you that you won’t be able to retire on an unreduced annuity at age 60. You have to have 29 years of service to do that. You could retire under the MRA+10 provision (minimum retirement age + at least 10 years of service). However, if you did, your annuity would be reduced by 5 percent for every year you were under age 62 (that’s 5/12 percent per month).

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Retire and rehire

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Q. I am biological research technician retiring from the Veterans Affairs Department on May 31. My boss wants to stay involved with the laboratory training new students in molecular biology. He wants to rehire me two days per week after I retire. Is this possible without affecting my annuity?

A. Unless you can be appointed under either an exceptional needs authority or on a limited time appointment, the salary of your new position would be offset by the amount of your annuity. Your boss can only propose that; only your agency can decide if that’s appropriate.

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CSRS and Social Security

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Q. I started my career in the federal government in April 1980. I am 57 years old. I have over 32 years of service and am eligible to retire. Prior to beginning my career as a public servant, I worked a number of jobs and had already earned my 40 quarters for Social Security. Am I subject to the CSRS Social Security Offset?

A. Since you are a CSRS and not a CSRS Offset employee, your annuity will not be affected at age 62 by any Social Security benefit to which you may be entitled. However, because you will be receiving an annuity from a retirement system where you didn’t pay Social Security taxes, your Social Security benefit will be reduced if you have fewer than 30 years of substantial earnings under Social Security.

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Offset for voluntary 6c retirement

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Q. Is there an offset to a FERS Voluntary 6c Retirement individual who subsequently receives a Schedule Award for an on-the-job injury? If so can you kindly explain how the offset would work in this situation? I do understand that there would be offsets to a person who retired with a FERS disability pension.

A. No, there isn’t.

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Substantial earnings

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Q. My substantial Social Security earning has been due to serving 38 years as a senior military reservist. I will have 34 years under CSRS in January 2013. However, 25 years were under CSRS before a three-year break in service. I came back as an offset employee in 2006. How will my Social Security be calculated in comparison to my retirement check? Will I still receive my full CSRS retirement check based on my high-3 and the full Social Security check since I meet the substantial rule with the years? How will this all play out? I will be 63 this month.

A. At age 62, if you are retired, your CSRS annuity will be offset by the amount of Social Security benefit you earned while covered by CSRS Offset. If you retire at age 62 or later, the offset will occur on the day you retire. In effect, you’ll receive the same amount of money; it will just come from two different places, the Office of Personnel Management and the Social Security Administration. However, any additional Social Security benefit you are entitled to will be affected by the windfall elimination provision if you have fewer than 30 years of substantial earnings under Social Security. To find out what constitutes substantial earnings, year by year, go www.socialsecurity.gov/pubs/10045.html.

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Temporary position

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Q. A CSRS annuitant friend of mine would like to apply for a temporary summer position that will be open in our agency for which he is fully qualified.  Would she be eligible without losing part of his annuity? I believe the position will be Social Security taxed only, not a FERS job.

A. As a rule, returning to work for the government will result in the employee’s salary being offset by the amount of his annuity. The only way to find out if there might be an exception in this case would be for him to talk with an agency benefits specialist.

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Temporary position and retirement annuity

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Q. I am retired under CSRS. If I were to accept a temporary or term position (i.e. NTE one year), would my salary be offset by my retirement or would I be able to collect both?

A. Unless you were hired into one of those rare positions that allowed you to receive your annuity and the salary of your new job, your salary would be offset by the amount of your annuity.

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Retirement checks

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Q. My first 25 years of federal service are covered under CSRS. I left for five years and was rehired under CSRS Offset. Do I receive two different checks covering my 25 years in CSRS and my 13 years in CSRS Offset? Are my 25 years in CSRS affected in any way by the CSRS Offset time?

A. You will receive one retirement check that reflects all your years of CSRS-covered service (CSRS and CSRS Offset). If you retire before age 62, your CSRS annuity will be offset at age 62 by the amount of Social Security benefit you earned while covered by CSRS Offset. If you retire at age 62 or later, the offset will occur on the day you retire.

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Retire and rehire?

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Q. I have about 25 years of FERS service, am in a 6c covered law enforcement job and am looking to move into another federal agency in a non-law-enforcement capacity but at slightly higher pay.  Because the recently enacted Law Enforcement Officers Safety Act stipulates that only law enforcement officers who “retired” from a job with law enforcement arrest and weapons carriage authority at the time of retirement qualify, I am considering the possibility of retiring on a Saturday (at the end of a pay period) and then “rehiring” in my FERS non- law-enforcement job the next day (Sunday), since this would be the start of the next pay period, and would apparently satisfy the statutory requirement of “retiring,” while a simple change of agency transfer would not.  Would doing this, if I could even arrange it, cause any problems such as the new agency (or OPM) applying my new salary against an offset, or would I simply draw my new salary as if the retirement did not exist, i.e., it would be “canceled” since I was immediately rehired?  I am also concerned that with the current OPM retirement processing backlog, I might be creating a problem.

A. Retiring at the end of a pay period and being employed by another agency the following day wouldn’t be any different than retiring and going back to work in a week, a month or a year later. With rare exception, your salary would be offset by the amount of your annuity. While it might be a nightmare for you and your new agency’s payroll office to start a new job before the final amount of your annuity was known, it could be sorted out down the line. You’d just have to set enough money aside to be able to return any overpayments of salary that were made to you.

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Spouse’s Social Security

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Q. I work for the federal government and am under the CSRS retirement plan.  I took a federal employee retirement seminar a year ago and was told that as long as I was working I could collect on my husband’s Social Security if he passed away.  Since I don’t pay into Social Security and don’t have 40 quarters I am not eligible for it myself. Everything I have read mentions examples of people who are retired and collecting a pension (which I am not).

I was told by Social Security that I had to be 66 to collect and that I could not collect now because I was making more than $14,000 a year.

Is Social Security right that even though I am still working and not collecting a pension and that I make more than $14,000 a year I cannot collect on my deceased husband’s Social Security?  I will be 62 on April 28.

A. The person you talked to at the Social Security Administration was correct. The earnings limit applies both to an earned Social Security benefit and a survivor benefit. If you are under full retirement age, that reduction is $1 for every $2 you earn about the annual limit. For calendar year 2012 that limit is $14, 640.

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Social Security

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Q. I am a retired CSRS postal worker who does not have enough quarters to be eligible for Social Security when I’m 62. Can I collect benefits from my former or current wife who both have worked and paid into Social Security for years? I was married to my former spouse for more than 10 years and her benefits would be a better financial option for me.

A. Because you are receiving an annuity from a retirement system where you didn’t pay Social Security taxes, any spousal Social Security benefit to which you might be entitled would likely be eliminated by the government pension offset provision of law. The GPO would reduce that benefit by $2 for every $3 you receive in your CSRS annuity.

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Social Security offset

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Q. Several weeks ago, I sent a request for information regarding the offset, if any, when I retire from civil service.  I served in the Army National Guard from June 1956 through February 1959. I was drafted into the Army on March 4, 1959, until Feb. 28, 1961. I then enlisted in the Army in March 1961 and retired April 30, 1979. I entered into employment by the federal government Sept. 12, 1980. My wife and I both draw Social Security benefits. I will be retiring Dec. 31, 2011, and need to know what offset I or my wife will experience. Will I be affected by government pension offset or windfall elimination provision?

A. When you retire from your civilian position, your Social Security benefit will be affected by WEP if you have fewer than 30 years of substantial earnings under Social Security. And any spousal Social Security benefit to which you would be entitled will most likely be eliminated because of the government pension offset provision of law. Since you didn’t provide any information about the employment that led your wife to receive a Social Security benefit, I don’t know how her benefit might be affected.

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Refund on buyback?

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Q. Worked 33 years for the U.S. Postal Service under Civil Service Retirement System and four years in the Marine Corps. Back in the 1970s, I bought back my USMC time so I could draw both Social Security and civil service retirements as I worked two jobs. Now, with offset in place, I cannot draw Social Security due to USPS retirement. Can I get a refund for my buyback payment since I will never draw Social Security?

A. As a CSRS employee, there wouldn’t be an “offset” that would cancel any Social Security benefit to which you might be entitled. Instead, you’d be subject to the windfall elimination provision. The WEP reduces — but doesn’t eliminate — that Social Security benefit. As for getting a refund of the deposit you made for your active-duty service, you can’t unless you resign from the government before being eligible to retire and ask for a refund of all your retirement contributions.

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Offset and rehire

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Q. I am, a 1811 employee who will be 57. I face mandatory to retirement  in 2012, with 23 years of service under FERS. Two questions:

1) Regarding the supplement from OPM, is there a earnings test/limit associated with the benefit? Or can I make more then the $14,000 without any reduction to the supplement?
2) Regarding  returning to federal service, law enforcement or non-law enforcement position, is that possible and what is the process to prevent a reduction in my pay/annuity? Is there a special term/classification I need to address in the application process?

A. First, because you will have reached your minimum retirement age when you retire, you will be subject to the Social Security earnings limit. Any earnings you have from wages or self-employment that exceed that limit ($14,160 in 2011) will cause your special retirement supplement to be reduced or suspended. Second, if you return to work for the federal government, there isn’t any “process” that will prevent the offset of your salary by the amount of your annuity. However, under existing laws, agencies have limited flexibilities to waive that requirement. As you shop around for another job, you’ll have to ask if you’d qualify for such an exemption.

 

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Left for private sector

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Q: I am getting ready to retire. I worked for the government from 1968 to 1972. I left the government and worked in the private sector and earned my 40 quarters working in the private sector and made my substantial earnings for Social Security from the private sector. I returned to work for the federal government in 1984,and was in CSRS Offset. I was told that since I earned by 40 quarters from the private sector, my government annuity will NOT be reduced.  and I will get a full government annuity and a full Social Security check. Is that right? Or will my annuity be reduced just because I am in CSRS offset and it doesn’t matter when I earned my quarters? I also am not married and therefore have no survivor benefits that I will leave behind. Does that make a difference? Am I affected by the WEP or pension offset?

A: By law, your CSRS annuity will be reduced at age 62 by the amount of Social Security benefit you earned while covered by CSRS Offset. Whether you will be affected by the windfall elimination provision depends on how many years of substantial earnings you have under Social Security. If you have 30 or more years, there won’t be any reduction in your Social Security benefit. If you have fewer than that, your Social Security benefit will be reduced. On the other hand, you won’t be subject to the government pension offset.

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Offset deductions

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Q: Can I be charged offsets on Social Security and CSRS?

A: Yes. Your CSRS annuity will be offset by the amount of Social Security benefit you earned while employed under CSRS Offset. Your Social Security benefit will be reduced if you have fewer that 30 years of substantial earnings under Social Security.

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WEP vs. GPO

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Q: Can you explain the differences between the Windfall Elimination Provision and the Government Pension Offset?

A: The windfall elimination provision reduces (but doesn’t eliminate) the Social Security benefit of anyone who receives an annuity from a retirement system, such as CSRS, where he didn’t pay Social Security taxes and has fewer than 30 years of substantial earnings under Social Security. The government pension offset reduces the Social Security spousal or survivor benefit of anyone who is receiving an annuity — in whole or part — from a retirement system, such as CSRS (but not CSRS Offset), where he didn’t pay Social Security taxes. The reduction is $2 for every $3 received in that annuity.

 

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Pensions

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Q. I am a retired governent employee receiving a pension. My husband was killed in a car accident in January of this year. My widows benefits from him under Social Security is being offset and I plan to appeal. Are there any cases where exceptions have been made?

A. No there aren’t. The law is fixed and doesn’t allow for any exceptions.

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CSRS Offset and Social Security

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Q: I am a Civil Service Retirement System Offset retiree (15 years in offset) and turned 62 in October. I [was] scheduled to receive my first Social Security benefit Dec. 22. I have contacted the Office of Personnel Management on several occasions requesting to know how much my annuity will be offset, but no one seems to know. My annuity still has not changed. Is it normal for OPM to be late in changing (offsetting) annuities of CSRS Offset retirees? How will overpayments of my annuity be handled?

A: Because you aren’t due for your first Social Security benefit check until the end of December, it’s likely that OPM will make the reduction in your January annuity payment. While OPM doesn’t provide estimates of CSRS Offset reductions, you can get a good idea about what it will be by using the online calculator at www.FEDbens.us.

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