Ask The Experts: Retirement

By Reg Jones

Pension eligibility

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Q. I worked for the National Security Agency from 1961 to 1968. Am I eligible for a pension?

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Military buyback

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Q. I retired in 2003 with 30 years of active Army service. I have been drawing full military retirement pay since then. I am now a GS employee with seven years of federal service. Can I still buy back my military time and combine the two for a federal retirement?

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Deferred retirement

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Q. I’m considering resigning from federal service because I’ve been unable to find a federal job at my husband’s new job location across the country. I have career status with 18 years of total federal service, six of which was bought back military time. I was born in 1959, so my minimum retirement age is 56; I’m 53 now. If I resign now with the intention of taking a deferred annuity when I reach 62, do I do anything in the process of separating that might affect my ability to return to the federal workforce? It’s my understanding that I don’t apply for the deferred retirement until I’m ready to receive it.

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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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Buying back retirement credits

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Q. I worked for the Postal Service from late 1979 until about 1991. I had a lot of personal and work-related problems and was also given a letter of termination. I decided to quit. I also tried to pursue a disability, but I dropped that because of stress and depression.

I withdrew my retirement to pay an accumulation of four months of bills and rent that I was behind in. I vaguely recall reading that there was a buyback of retirement. Is this true? I am applying for Social Security benefits. I am only 58, but, due to health concerns, am not able to work. I have 31 Social Security credits and need 40 for full benefits. If I could buy back those years of retirement, I would have the full number of credits.  I honestly don’t know how all this works.

A. If you took a refund of your retirement contributions when you left, you wouldn’t be entitled to any retirement benefit nor could you redeposit that money, plus interest, to get credit for that service unless you returned to work for the government. If you left your contributions in the retirement fund, you’d be eligible for a deferred annuity at age 62.

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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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Redeposit

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Q. I started employment with the Defense Department in September 1981 under CSRS. In 1995, I took advantage of a Voluntary Early Retirement Authority/Voluntary Separation Incentive Pay because my organization was downsizing. I also took a refund on my retirement account, which I tried to invest in buying a home and lost it. I was reinstated in the government in 2004 and came back as CSRS Offset.  I also rolled my 401(k) from the job I had outside the government into the Thrift Savings Plan. I will be 65 on March 7, and was planning to retire in May. Because I did not put my retirement back into the CSRS account, will that hurt my plans for retirement? Will my annuity be greatly reduced because I did not redeposit the funds? If so, by how much?

A. If you don’t redeposit the retirement contributions that were refunded to you, plus accrued interest, you’ll still get credit for that time in determining your total years of service. However, it won’t be used in your annuity computation. In effect, your annuity would be based solely on the time between when you returned to work for the government and when you retire.

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Unused flexible spending

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Q. I have about $1,500 in my flexible spending account. Typically, you have until March to use the funds. What happens in my case? Is the unused amount refunded to me on Jan. 1? Do I still have until March, or do I lose the unused amount?

Also, Dec. 31 is a Monday and New Year’s Day, a federal holiday, is Tuesday.  If the president gives federal employees all day off on Monday, will the Office of Personnel Management still count the 31st as my last day of work even though I will do all the paperwork in my agency on the Friday before (Dec. 28)?

A. 1. No, the unused money won’t be refunded to you.

2. Your final date of separation will be the one you state on your retirement application.

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Military buyback

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Q. I left the active-duty Army with 15 years of service to take a federal law enforcement position (6c). I’ve bought back all 15 years of service, and now I have the opportunity to go back on active duty with the Army (I’ve been in the Reserve) and complete five years for an active-duty retirement. What happens to the buyback time and money when I return to my federal job if I complete the active-duty retirement after I’ve finished the military buyback payments and I have an updated service computation date?

What if I finished the federal retirement first with the military buyback years, then went on to finish my active-duty retirement? Would I lose the federal time and money from the military buyback?

A. If you were called to active duty, meaning that you had no option but to go, and returned to your former covered position, that service would be credited toward your eligibility to retire under the more generous law enforcement officer formula but only if you made a deposit to the retirement system. If you volunteered to go on active duty and returned, you’d still have to make a deposit to get credit for that time, but it wouldn’t count as covered service. Note: The active-duty service for which you have already made a deposit isn’t creditable toward a law enforcement retirement. It, like the voluntary service I referred to above, would be treated as regular service and computed accordingly.

If you retired and then went on active duty, the outcome would depend on whether you were eligible for military or reserve retired pay. If you were retired from the Reserve, receiving that pay would have no effect on your civilian annuity. However, if you retired as an active-duty member of the military, you would have to waive your military retired pay to get credit for the 15 years of earlier active-duty service. If you didn’t, those years would be deducted from your civilian annuity and you’d receive a refund of your deposit for that time.

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Military payback after retirement?

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Q. I am paying back more than nine years of active-duty Air Force service and I still owe $6,000. I am considering retiring next month under FERS. Can I continue to make those payments from my annuity check while ensuring I get full credit for my military time?

A. No, you cannot. If you haven’t completed the deposit by the time your annuity is finalized, the money you have deposited will be refunded to you.

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Military time, early retirement and MRA+10

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Q. I retired from the Army in 1991 with 22+ years of service as a command sergeant major. I went to work immediately as a FERS civil service employee, and nine years and nine months later, was offered an early retirement and a $25,000 one-time incentive payment because of agency drawdowns. To qualify, I would have to waive my military retirement, which I did, and that brought my total years of service to about 32 years or so.  Had I known then what I know now, I would have simply completed three more months of FERS employment and taken the FERS MRA+10 retirement.

I now have been retired for about 10 years or so, and am receiving a FERS retirement. I turned 62 in December.  I have been told, I can (because I am 62) contact the Office of Personnel Management and have my retirement changed to a different type of retirement, (something about only needing five years of service if you are 62) and they would recompute my retirement using the nine years and nine months of civil service time and none of my military time. And that would result in a smaller FERS retirement. But by doing so, I could have my military retirement reinstated and draw the full military retirement and the reduced FERS retirement concurrently. I was also told that the money I gave OPM to buy the military time would not be refundable, which is fine with me. If this is possible, it appears that the money I lost in combining the military and civilian time together would be negated in the long run.

1. Is it possible to change the FERS type of retirement and have my military retirement reinstated? How would I start such a process? Are the Army and the FERS on the same sheet to coordinate this? I would not want to get caught up in something where I end up with much less than I have now because of some procedure conflict.

Would I need to pay back the $25,000 that OPM gave me to retire early?

If this is possible, what are the possible down side to such an action.

2. Immediately after military retirement, I went to work as a temporary GS-12 in Germany for V Corps for a year,  then transferred to a permanent employee status for the next nine years and nine months. Is there any way that that year can be credited to my OPM retirement? I have been told it depends on dates, but no one seems to know what dates are permitted to be counted to bring my total FERS employment past the 10-year mark.

3. When you combine your military and civilian time together, is it an all-or-nothing thing? For example, if I only needed three months of time to qualify for the MRA+10 retirement, could I just waive three months of the military time to make up the time and still have 21+ years for military retirement purposes? It seems to me that would be in the spirit of the law and would not double-count anything. I am assuming if it was possible, I could have the OPM change my retirement to the MRA+10 status instead of whatever it is now.

A. 1. No, you cannot convert your current annuity to a different one. What’s done is done.  The age 62 with five years of service retirement option is only available to an employee who is age 62 and has five years of service.

2. Since your period of temporary service occurred after Dec. 31, 1988, it would only have been considered creditable service if retirement deductions had been taken from your pay. Since you weren’t given credit for that time, it’s safe to assume that they weren’t.

3. With one exception, making a deposit to get credit for active-duty service is an all-or-nothing thing. Here’s the exception: If you had more than one period of active-duty service, which is often true of reservists who are periodically called to active duty, you can make a deposit for any one or more of those periods of  service. Even if that exception applied to you, there is nothing that can be done about it now. As I said at the beginning, what is done is done.

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Refund of retirement contributions

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Q. I started working for the government in 2008 and resigned for personal reasons this year. I was told by one representative at the Office of Personnel Management that because I vested more than three years, I am eligible for a refund of retirement I paid into FERS, as well as monies the government paid. I was then told by another rep that that is not true, that I can only get the money I invested into retirement. Can you please tell me which on is true?

A. You can only get a refund of your retirement contributions. No one ever receives a refund of the government’s contributions.

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Retirement pay eligibility

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Q. I worked for the Interstate Commerce Commission from September 1984 to September 1994. Will I be eligible to collect retirement benefits when age appropriate?

A. Yes, if you didn’t take a refund of your retirement contributions when you left government. Because you had at least five years of service, you could apply for a deferred annuity at your minimum retirement age (MRAs range from 55 to 57 depending on your year of birth). However, your annuity would be reduced by 5 percent for every year you were under age 62, unless you postponed the receipt of your annuity to a later date to reduce or eliminate the age penalty.

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Deferred annuity?

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Q. I was a half-time Veterans Affairs Department psychologist at an outpatient clinic from 1981 to 1993.  During the first part of the period of employment, I recall that I was part of the standard VA retirement system.  If my memory is correct, I was compelled to join the Thrift Savings Plan and also had some reduced level of participation in the some retirement plan (maybe it was Social Security) in the final years of my employment. I received an annual notice regarding TSP, but I have not received any other information on any possible retirement benefits. I am now 66 years old. Should I be eligible for some sort of pension or retirement benefit aside from the TSP? Who may I contact to explore this question?

A. I know of only one way to find out. Go to www.opm.gov, click on Find Form(s), and download a copy of Standard Form 2801, Application for Immediate Retirement. After filling it out, send the form to the U.S. Office of Personnel Management, Retirement Services and Management Group, P.O. Box 45, Boyers, PA 16017-0045. If retirement deductions were taken from your pay and you didn’t receive a refund of those contributions when you left, you would be eligible for a deferred annuity.

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Early-out money and refunds

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Q. Can early-out money be used to pay back refunded money? Since the Office of Personnel Management sends you the option either to buy time back or not, you would have the early-out money in hand.

A. Yes, you can redeposit the amount you owe prior to the final adjudications of your claim by OPM.

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Military buyback

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Q. I retired from the Air Force after 20 years of service. I am receiving retirement pay. I was given a 40 percent disability rating from the Veterans Affairs Department. VA takes out a percentage of my military pension and then sends that to me tax-free. I now work for the Department of Energy, and I have bought back my 20 years of service. I would like to retire at my minimum retirement age of 56, which is about six years from now, which if separated would give me my 20 years military and 17 years FERS. I was told that upon my retirement I have to elect to confirm that I want to buy back my military time (which is already paid for), at which time I will lose my military pension, or I can ask for a refund of what I paid to buy back my military time and retire with a smaller number of FERS years, but would have two pensions (military and FERS). I was also told that if I elect to combine military and government time, I will only lose that portion my military pension and not my VA disability pay, which is taken from my military pension. Is this correct?

A. Yes.

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VSIP

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Q. I took my retirement money out in 1990. Can I use Voluntary Separation Incentive Pay money to pay that back? The Office of Personnel Management told me I would have the opportunity to buy back refunded money or time before final annuity payments were calculated, but I worried that if I retired, they would not count that time into my annuity before I had time to pay it back.

A. What OPM told you is correct. And, since you will have your VSIP long before your annuity is finalized, you’ll be able to make the redeposit with time to spare.

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Sick leave after rehire

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Q. I am 50 years old with 30 years of service. I plan on resigning from my federal government job. In three to five years, I will try to be rehired at age 54 or 55. What will happen to my sick leave balance? Also, as I understand it, I will be able to retire normally at my minimum retirement age (56) if rehired. There appears to be no minimum amount of time I need to be re-employed with the federal government to retire as long as I meet MRA and the 30-year requirement. My health insurance will be good also in retirement as long as I always kept it for the last three years I was employed. Is this correct?

A. If you returned to federal government employment and hadn’t taken a refund of your contributions in the retirement fund when you left, you’d be able to retire on an immediate annuity when you met the age and service requirements. If you were enrolled in the FEHB program when you left, enrolled again when you were re-employed and had five years of coverage, you could continue that coverage into retirement. One closing thought: Although you could retire as soon as you had the right combination of age and service, it would be deceitful to take another government job for the sole purpose of being able to retire. You would owe your new employer enough time on the job to repay him or her not only for the effort expended to hire you but to accomplish the work he or she hired you to do.

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Health coverage, refund and re-enrollment

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Q. I am 57 and worked for the Postal Service from 1981 to 1997. I took a refund of my contributions when I left. Am I eligible for health benefits? If I took a position now with the USPS, could I get reinstated?

A. No, you aren’t eligible for health benefits. If you went back to work for the government, you could enroll in the Federal Employees Health Benefits program (or re-enroll if you were enrolled in the FEHB program during your previous period of employment).

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Special retirement supplement

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Q. I have 30 years of federal service: two years in CSRS, in which I did not get a retirement refund; four years in the Coast Guard, where I made a deposit for my time; and 24 years under FERS. When I retire under FERS at my minimum retirement age, 56, will the two years under CSRS be considered FERS and used toward my special retirement supplement calculation?

A. Yes, because those two years were automatically converted to FERS time. If you had worked under CSRS for five or more years, they wouldn’t have been. Instead, you’d have a CSRS component in your annuity.

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