Ask The Experts: Retirement

By Reg Jones

MRA+10, health benefits and annuity postponement

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Q. I am eligible for the MRA+10 provision of FERS. However, I want to continue federal health benefits immediately in retirement and postpone payment of the annuity so I can avoid the reduction in the annuity payment. Can I do this?

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Age 62 or 61?

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Q. I am FERS-covered and eligible to retire this year with 20 years but at age 61. Can I separate (or resign) first at age 61 this year and postpone the start of my annuity to 2014, when I am 62 to get the higher 1.1 annuity (instead of 1.0 at 61)?

A. No, you can’t. The only FERS retirees who are eligible to get the higher multiplier are those who retire on an immediate annuity at age 62 or later with at least 20 years of service.

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Retirement application

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Q. I am an Air Force retiree who has 13 years as a federal employee. I am eligible for MRA+10 on March 24. If I apply to retire, how long does it take to process my application for approval or what is the earliest date I can actually resign? I am considering a private sector job and they want to start in 30-45 days.

A. When you fill out the Standard Form 3107, Application for Immediate Retirement, you’ll put the date you are retiring in Section B2. It doesn’t matter how long it takes to process your application, that’s your last day of employment. I suggest that you inform your management well in advance and give your personnel office time to review the 3107 to make sure that everything is in order. Note: Since you’ll be retiring under the MRA+10 provision, you have the option of accepting an immediate annuity, which will be reduced by 5 percent for every year you are under age 62, or postponing the receipt of your annuity to a later date to reduce or eliminate the age penalty.

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Postponed annuity and end of leave year

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Q. I will be retiring this year from FERS under MRA +10. I plan to select an immediate annuity postponed for payment to start Dec. 12, 2014, when I turn 62. I want to have my sick leave used to calculate my annuity based on full amount so I will select a date of Jan. 1, 2014, or later. To ensure I can cash out maximum annual leave, what is the last day of the 2013 leave year so that I can take a lump sum for unused annual leave of around 340 hours?

A. For most agencies, the 2013 leave year ends Jan. 11, 2014. Check with your own agency to be sure.

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Postponed annuity and unused sick leave

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Q. I work for the Postal Service. If I retire at 56 with 20 years of service after Jan. 1, 2014, and decide to postpone my annuity, what happens to my sick leave? Will I be credited with 100 percent, 50 percent or 0? If it does not count, is there any reimbursement?

A. You’ll receive full credit for your unused sick leave in the computation of your annuity. That’s true regardless of when you begin receiving your annuity. Because you’d be retiring under the MRA+10 provision, your annuity would be reduced by 5 percent for every year (5/12 percent per month) that you were under age 62. You can, of course, defer the receipt of your annuity to a later date to reduce or eliminate the age penalty.

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Postponing annuity

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Q. I am considering separating from federal employment in July at 58 years old with 21 years and five months of federal service. I will postpone receiving the retirement annuity until I am 60. This will give me 60 years of age with 21 years and five months of service.

Since I am separating then doing a postponement of receiving my annuity until 60 which, per the Office of Personnel Management, is different than deferring an annuity, where you will not receive the special retirement supplement, will I get the FERS supplement when I start to receive my postponed annuity at age 60?

A. Yes. Because you are retiring and postponing the receipt of your annuity until age 60, you will receive the special retirement supplement until you reach age 62.

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MRA+10 and special retirement supplement

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Q. I plan to retire from the Postal Service at the end of February, when I reach my minimum retirement age of 56. I will have 21½ years of service and will be retiring under the MRA+10 provision. I plan to start taking my annuity payments at that time. Will I also be entitled to the special retirement supplement?

A. No one who retires under the MRA+10 provision is eligible for the special retirement supplement. You also need to be aware that when you retire, your annuity will be reduced by 5 percent for every year (5/12 percent per month) that you are under age 60.  You can reduce that age penalty by postponing the receipt of your annuity to a later date.

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Postponed annuity and benefits

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Q. If I take deferred retirement after MRA but before 62, can I re-enroll in my BC/BS plan (that I have participated in for more than five years) later? Does that date have a time limit? I ask in light of this:

“If you separated from federal service after reaching the Minimum Retirement Age with at least 10 years of service but postponed the commencing date of your annuity to reduce or avoid the age reduction, you are eligible to re-enroll in the Federal Employees Health Benefits program and the Federal Employees’ Group Life Insurance program if you participated in the program for the five years of service immediately before you separated from federal service or continually from your earliest opportunity.”

A. You are asking about a postponed annuity, not a deferred annuity. You can retire under the MRA+10 provision and postpone the receipt of your annuity to reduce or eliminate the age penalty, If you have been covered by the Federal Employees Health Benefits program for the five continuous years before you retire, you’ll be able to re-enroll in it when your annuity begins. Deferred annuities are available to only those who leave government before they meet the age and service requirements to retire but do meet them later. Deferred retirees cannot re-enroll in FEHB.

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Postponed retirement and benefits

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Q. I am 54 and a federal employee with 14 years of service. Can I take a postponed retirement now and then at MRA, 60 or 62, apply for retirement and have my health and medical coverage reinstated? I have looked at OPM, and it is not clear. I have talked to my agency’s folks and received conflicting information.

A. No. To retire on a postponed annuity, you’d have to have at least 10 years of service (which you do) and have reached your minimum retirement age (which you haven’t). Your MRA is 56. At age 54, all you could do is resign from the government and apply for a deferred annuity at age 62. If you did, you wouldn’t be able to re-enroll in the Federal Employees Health Benefits program.

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