Ask The Experts: Retirement

By Reg Jones

Service computation date and FERS retirement

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Q. I am contemplating retirement with a separation date of Jan. 6, 2014. Under FERS, my creditable service for retirement (on Jan. 6, 2014) will be 29 years and two months (service computation date of Oct. 24 1984). My creditable service for RIF and leave (on Jan. 6, 2014) will be 31 years and seven months (service computation date of June 20, 1982). The estimate I have indicates the MRA+10 provision, reducing my annuity by approximately 35 percent (5 percent each year under 62; I will be 57 in January). From an eligibility standpoint, which would be the correct creditable service date to use? I understand the annuity formula (1 percent x high 3, etc); if I have at least 30 years of service and have reached MRA, why such a huge penalty when the annuity is already based on the years I was able to contribute to the annuity portion of FERS?

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Reduction in force and retirement

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Q. I will be 58 next year, when we are supposed to be RIF with the Postal Service if we have not found another EAS position. At that time I will have 24½ years in and be 58. I understand I will be eligible for DSR.

How is the amount calculated? Is it the same as the FERS amount, is it permanent and can I still receive the FERS supplement? Can I receive DSR and FERS, or just the DSR or FERS? I don’t want to retire but am trying to see how I will be financially if I am part of an RIF. Also, does this affect my Social Security?

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FERS, special retirement supplement and reduction in force

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Q. I have 29 years of federal service and am 50 and under FERS.

If I am involuntarily separated by a reduction in force at age 50, do I get the FERS Social Security bridge along with my Discontinued Service Retirement, or do I have to wait until I turn 56 to collect the bridge portion of my retirement? Does this start automatically with the DSR, or do I have to apply for the bridge with SSA when I am 56?

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VERA/VSIP and retirement benefits

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Q. I am a Defense Department civilian and have met my minimum retirement age. I will not be eligible for full retirement under FERS until September 2015.

By then, I will be 60 and will have 30 years of service.

If I accepted a VERA/VSIP (I am on the offer list), would I get hit with an annuity reduction if the offer is not the result of a reduction in force? If I could take the offer without a reduction, would I also receive the special retirement supplement?

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RIF, VERA, penalty and SRS

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Q. I was born in 1966 and my organization may undergo a reduction in force. I anticipate that I will have the 50 years of age and 20 years of service by the time they may offer the Voluntary Early Retirement Authority/Voluntary Separation Incentive Pay. Please let me know if the minimum retirement age counts during a RIF if I am a FERS employee because my MRA is 56½, of which I will only be 50 years of age, so I need to know if I will be penalized 5 percent each year under MRA. Hoping that the 50/20 rule is an exception to being penalized.

Also, how can I find out more about the special retirement supplement?

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RIF, special retirement supplement and penalty

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Q. If I retire at 59 years and five months with 28+ years of service, under a reduction in force, would I qualify for the special retirement supplement and only be penalized until I reach 60?

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RIF and leave

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Q. If I am subject to a reduction in force with just under 25 years of service (say, with 24 years and nine months), can I use sick or annual leave to make up the difference? If not, is there any recourse to take a retirement in lieu of a RIF when you are so close to the 25-year threshold? I am 46 years old.

A. While you may only use sick leave for purposes spelled out in law and regulation, your agency can allow you to use your annual leave to continue past the date on which you’d be separated if it will allow you to qualify for retirement.

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Retirement options

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Q. I am so totally lost in all of this early retirement and buyouts and furloughs. I have 33 years of service with the government and am 55 years old under CSRS. Not sure which to apply for or wait until our office gives us reduction-in-force notices if our office is going to reorganize, restructure. Would I be eligible for early buyout with full benefits come May?

A. You really are lost! However, everything should be clearer when I tell you that you can retire anytime you want to. That’s because you have the age (55) and service (at least 30 years) needed to do that. As a result, you can keep working, retire now, wait until your agency offers you a buyout, or wait until you receive a RIF notice. The world is your oyster. Enjoy it.

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RIF and special retirement supplement

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Q. I am a FERS employee, age 59, and have over 28 years in the Postal Service. Our facility is going through an accelerated transfer of function to a facility more than 100 miles away. If they cannot offer me a position in my same craft and I am given a notice to separate voluntarily or involuntarily, can I retire and receive an unreduced annuity and the special retirement supplement until age 62? If I retire, should I elect a discontinued service retirement or optional retirement since this is an organizational change involving reduction in force, transfer of function. Could I also receive separation pay?

A. Yes, you can retire on an annuity that wouldn’t be subject to an age penalty and entitled to the special retirement supplement. Since you would be eligible for either an optional or discontinued service retirement, you can decide which you prefer. If you elect optional retirement and later return to work for the federal government, the salary of your new position would be offset by the amount of your annuity. If you elect a DSR, your annuity would be terminated, and you would once more be a regular employee.

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Re-employed federal retiree wants to cancel retirement

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Q. I took a voluntary early retirement (at age 52 with 20 years of service) about five years ago and have since been re-employed with federal civil service full time. My salary is reduced by my retirement annuity, and I understand I need to work five more years to receive a recomputed retirement. Can I cancel my existing federal retirement and just receive my full salary? This may give me the more secure status of being a regular employee rather than a re-employed annuitant. A re-employed annuitant appears to be more vulnerable to reductions in force. Also, my next five years of retirement contributions are only at the reduced salary amount (salary — annuity), so I am not contributing much to my retirement; plus, since it is a reduced salary, I don’t know if these next five years can qualify as any of my high-3 years for computation.

A. No, you cannot cancel your annuity and receive your full salary. If you work for at least five years full time and then retire again, your annuity will be recomputed based on your highest three consecutive years of average basic pay, regardless of when they occurred in your career.

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Reduction in force and creditable service

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Q. I am a FERS employee with slightly less than five years’ creditable service.

If I am the victim of a reduction in force before I reach the five-year point, will any unused leave be counted toward creditable service?

A. No.

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Term employees and reductions in force

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Q. I am a term FAA employee. I was a permanent employee with the Department of Defense. I have 13 years of civil service. I have no military time. For 11 of the 13 years, I was a permanent employee with the Department of Defense.

If a reduction in force occurs, do I as a term employee received the separation incentives usually offered to permanent employees? What benefits are term employees allowed, such as priority placement program, return rights, etc.?

A. You couldn’t receive a voluntary separation incentive payment because only employees serving in an appointment without time limit are eligible for that. During a reduction in force, you’d fall into the lowest retention category — Group III. For more information about RIFs and how they play out, go to www.opm.gov/rif/general/rifguide.asp.

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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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Deferred annuity

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Q. I was separated by a reduction in force in March 1996. I left all retirement dollars in CSRS. I have more than 21 years of combined federal service from the Department of the Army and Department of Energy. I am 56. Can I apply for a deferred retirement at age 60 (with over 20 years service) since my separation from DOE was due to a reduction in force, or do I have to wait until age 62 to apply for my deferred retirement?

A. As a former CSRS employee, your only option is to apply for a deferred annuity at age 62.

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Military buyback and RIF before vesting

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Q. I am a career conditional employee with 1½ years total civilian service time who is eligible to buy back my military time. Due to the current budget constraints, I fear that I could be subject to a reduction in force. If I buy back my time and am RIF’d prior to completing my five years of civilian service that are required to be vested in FERS, what happens to my military deposit?

A. You’ll have a choice to make. You can either ask to have that money refunded to you or you can leave it in the fund. If you ask for a refund and later return to government service, you can always redeposit the money.

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How are VERA applicants selected?

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Q. I am eligible for and have quickly submitted the interest form for Voluntary Early Retirement Authority three times now. I am a GS-11 with 25 years and seven months of service at 56 years of age. I have been turned down twice and fear being turned down again. I have been told that it won’t save someone else’s job or variably because they can’t hire behind me. How are successful VERA applicants chosen? My job is not so specialized that someone couldn’t backfill. There are plenty of other people at my level with the same job series. I understand the Voluntary Separation Incentive Pay isn’t automatically offered to everyone but thought VERA was approved for those who were eligible.

A. VERA is a mechanism for restructuring the workforce with a minimum of disruption. An agency is required to submit a detailed plan to the Office of Personnel Management, which includes a detailed summary of the agency’s personnel and/or budgetary situation that will result in excess personnel because of delayering, reorganization, transfer of function, reductions in force, etc. The plan must specify the occupations, grades, organization units and geographic areas where VERAs can be offered. As you can see, employees aren’t selected for a VERA, nor can they apply for one. If offered one, they can only accept or reject it.

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Discontinued service retirement

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Q. I will be RIF’ed on July 29 with 24 years and seven months of service. Do I qualify for a discontinued service retirement? How much will my annuity be reduced? I am 43 years of age. I am covered in a law enforcement officer position. Additionally, I have six months of sick leave. Can I use this time to meet the 25-year DSR time period for any age?

A. You aren’t eligible for a discontinued service retirement. To be eligible for a DSR, you’d have to be age 50 with 20 years of service or any age with 25. Sick leave cannot be used to meet the length of service requirement.

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Benefits following RIF

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Q. I have 36 years of creditable service under CSRS, and I am 56 years of age. In a reduction-in-force situation, assuming I was not placed in another government position, would I be entitled to both 52 weeks severance pay and an immediate annuity?

A. Because you’d be eligible for an annuity, you wouldn’t be eligible for severance pay.

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Special retirement supplement

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Q. I am a FERS retiree who was RIF’d into retirement in October 2009 with 27 years of service. I reached my minimum retirement age of 56 on Jan 4. I understand I will receive the special retirement supplement for first year regardless of my employment income. Will that continue for the 12 calendar months from February through January 2014? Or is it only until Dec. 31, which would be 11 months?

After that first year, I understand that the Office of Personnel Management will evaluate my previous year’s income (I assume total 2013) and then cut off my supplement or at least adjust it based on how much over the $14,160 earnings limit I made. I will have made more than three times the $14,160, so I assume, in my case, they will cut me off. Will they cut me off for 12 months and evaluate me again on Jan. 1, 2015, looking at my 2014 income? Or will they look at each month of 2014 to see if I exceed the prorated allowable income during 2014?

A. Start your search for answers at www.socialsecurity.gov/retire2/rule.htm.

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FERS RIF and annuity

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Q. I am 57 and have 27 years of service as a FERS employee with the Interior Department. I am in an RIF situation and would like to know my options.

It appears, because of my age, that I am eligible for an immediate annuity.

Will my annuity be reduced because of my age and my being three years short of 30 years of service?

A. Yes, you will be eligible to retire, and you won’t be penalized because you are short of the 30 years of service normally required for an immediate, unreduced annuity.

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