By Reg Jones
Q. If a federal employee takes a buyout, but then wants to return to federal service, is he eligible for reinstatement rights, or does he have to compete as though he did not have prior federal service?
March 21st, 2013 | Uncategorized
Q. I took the Voluntary Early Retirement Authority on July 31. I am receiving the special retirement supplement. I have since applied for Social Security disability. If I am approved for SSDI, will I lose the supplement even though I did not file for Postal Service disability? And will I have to pay back the supplement for the months I receive back pay from Social Security? And will I need to notify the Office of Personnel Management that I am receiving Social Security disability?
Q. If you take an early-out with an incentive and, in turn, put in for a medical retirement and it’s approved, would you have to pay back the incentive?
Q. I may be offered an early-out in May. I have been working for the Army Corps of Engineers for the past 34 years. I’m a CSRS employee. If I take the buyout and have a chance to go work for FEMA or the U.S. Forest Service fighting fires out west this summer, can I do this without paying back the bonus?
A. According to the Office of Personnel management, “An employee who receives a [Voluntary Separation Incentive Pay] and later accepts employment for compensation with the Government of the United States within five years of the date of the separation on which the VSIP is based, including work under a personal services contract or other direct contract, must repay the entire amount of the VSIP to the agency that paid it — before the individual’s first day of re-employment.” You’ll have to check with your potential employer to determine if there is any exception to this rule.
Q. I am about to retire as a heavy equipment operator for the Department of Public Works. I have been offered a job as a property book manager with a contractor. Will I have to repay their Voluntary Separation Incentive Pay?
A. According to the Office of Personnel Management, “An employee who receives a VSIP and later accepts employment for compensation with the Government of the United States within 5 years of the date of the separation on which the VSIP is based, including work under a personal services contract or other direct contract, must repay the entire amount of the VSIP to the agency that paid it – before the individual’s first day of re-employment.” Whether this restriction will apply to you is something you’ll have to check out.
Motto: Look before you leap.
Q. I worked for the federal government for over 28 years. I retired last year under Voluntary Separation Incentive Pay provisions June 30, 2012.
I am considering re-employing/reinstating. Am I eligible to return to work on July 1, one year after retiring? Can I repay the VSIP in cash or in payments?
I read once that you can make payments for up to 36 months upon re-employment but am not sure whether this is correct. I understand the VSIP must be paid back before I return to work.
Upon re-employing with the government, will I be able to contribute to FERS and the Thrift Savings Plan?
I noticed on the USAJobs website that some Navy notices state you can’t contribute to the retirement or TSP if your a re-employing annuitant. Yet others I read from other government agencies remain silent on this issue.
A. Reg: You can return to work for the government at any time after you accept a VSIP. However, if you accept employment for compensation with the government of the U.S. within five years of the date of the separation on which the VSIP is based, including work under a personal services contract or other direct contract, you must repay the entire amount of the VSIP to the agency that paid it before your first day of re-employment.
Both things you read about re-employment are true. As a rule, your salary would be offset by the amount of your annuity and you would be able to contribute to the retirement fund. If you worked for a full year, you’d receive a supplemental annuity; if you worked for five years, you’d receive a redetermined annuity. On the other hand, there are certain limited authorities that would allow you to return to work and receive both your full annuity and the full salary of your new position. However, you would not be permitted to contribute to the retirement fund and, when you retired again, you wouldn’t be eligible for any additional retirement benefits.
Mike: From published Office of Personnel Management materials: “If a re-employed annuitant is performing service covered by FERS or CSRS (i.e., the appointment is made pursuant to 5 U.S.C. § 8468 or § 8344(a), respectively), the re-employed annuitant is eligible to participate in the TSP.
Agency contributions for a FERS re-employed annuitant must begin with the effective date of the reappointment to the FERS position as discussed in Section VI (A) of this bulletin. The re-employed annuitant may make contribution elections as discussed in Section III of this bulletin.
If a re-employed annuitant is not performing covered service (e.g., a FERS annuitant who is re-employed on an intermittent basis or an annuitant authorized to receive full salary and full annuity under P.L. 101-509 or the National Defense Authorization Act of 2004), the re-employed annuitant is not eligible to participate in the TSP.
Generally, re-employed annuitants are performing covered service. In most cases, if the annuitant indicator on the Standard Form (SF)-50, Nature of Action, is coded “1,” “4,” or “5,” the re-employed annuitant is eligible to participate in the TSP. In the case of a FERS re-employed annuitant, this will be reflected in the retirement code (which indicates FERS) because the annuitant is required to have FERS deductions taken from pay.
In the case of a CSRS re-employed annuitant, however, this may not be reflected in the retirement code because the annuitant may not be required to have CSRS retirement deductions taken from pay. Consequently, the retirement code of a CSRS re-employed annuitant may be “4” (i.e., none), though the annuitant is performing service covered by CSRS and is therefore eligible to participate in the TSP.”
October 5th, 2012 | Uncategorized
Q. I withdrew $4,000 after leaving federal service. I returned and plan on retiring after 30 years of service. I intend to pay back the withdrawal. Can I repay after I retire to regain the years I lost when I withdraw? Or do I have to repay while I’m still employed in federal service?
A. You have to complete the redeposit, plus accrued interest, while you are employed by the federal government.
July 17th, 2012 | Uncategorized
Q. I have 22 years of federal service: 10½ years in the Air Force and 11½ in the Defense Department, leaving as a GM-14 in 1990. I was under CSRS and took the small lump sum when I left. Can I repay into the system and qualify for an annuity? I am 62½ years old.
A. No, you can’t. You would only be able to redeposit that money, plus interest, if you were a current employee of the federal government.
July 17th, 2012 | Uncategorized
Q. I plan to retire Nov. 2, 2013. I will be 66 years old, with 37 years of service. I am CSRS Offset for 30 of those years. I withdrew approximately $9,000 in 1982 (CSRS earnings) and will not be repaying it. (It’s now about $55,000 with a penalty of about $300 per month.) I know my retirement will be “offset” by about $800 in Social Security. My Social Security is estimated to be about $1,460 before the offset. Will I be able to collect the Social Security difference of approximately $600, or is my CSRS offset all that I’ll get? I do not have other substantial Social Security earnings. When I talk to my human resources department, they just shake their head and refer me to the Office of Personnel Management. I was told an estimate of my retirement would take five to six months. I can hardly wait to see how long it takes to get a check when I retire.
A. Your CSRS annuity will be offset by the amount of Social Security benefit you earned while covered by CSRS Offset. The amount you receive in total will be approximately the same; it will just come from two different places, OPM and the Social Security Administration. Any additional Social Security benefit to which you are entitled through non-CSRS Offset employment will be added to your Social Security benefit payment.
June 22nd, 2012 | Uncategorized
Q. I have to buy back four years, which will give me 30 years with the Defense Department. It will cost me $8,000. I owe about $1,500. The rest is interest. I never knew about this until I started retirement plans. If I had, I would have started a repayment plan. Can you explained why the why there is so much interest and is there way it can be reduced? I have been waiting now for eight months for the Office of Personnel Management to make its final calculations so I can begin to pay. Is there anything I can do to get OPM speed up the process?
A. First, before January, 1985, the interest rate was a flat 3 percent. From that point forward, a variable interest rate has been charged. As determined annually by the Department of the Treasury, the interest rate for any year equals the overall yield to the retirement fund from retirement securities during the preceding fiscal year. Those rates have varied from a high of 11.125 percent in 1985 to a low of 2.25 percent this year.
Second, there is no way that the amount you owe in interest can be reduced. You owe what you owe.
Third, I’m not aware of any way that you can get OPM to speed up the process.
May 22nd, 2012 | Uncategorized
Q. I was an employee under CSRS for 15 years and nine months. I took a Voluntary Separation Incentive Payment and withdrew my retirement pay. I am recently rehired and will go under the CSRS Offset. How can I determine what the repayment would be with interest?
A. There’s only one way to find out how much you owe. Download a copy of Standard Form 2803, Application to Make Deposit or Redeposit, fill it out and send it to the Office of Personnel Management, Retirement Services and Management Group, P.O. Box 45, Boyers, PA 16017-0045. When they’ve told you how much you owe, take that information to your payroll office. They can tell you how much you’d have to pay in total, which would include accrued interest. If you decide to make a redeposit, they can work out a repayment schedule.
May 22nd, 2012 | Uncategorized
Q. I retired from the government Nov. 30, 2011, as a GS-13, age 56 with 30 years of service. I started a new job where my earnings will exceed my previous salary as a fed. I have been receiving partial annuity payments as expected, but the Office of Personnel Management just sent FERS supplement payments for Dec. 11 to March 12. Will I have to repay the supplement for January to March 2012, because my earnings in 2012 have already exceeded the $14,000 maximum additional income limit? The rules I have read talk about calculating the supplement based on earnings “the year” after you retire. Does this mean calendar year or 12-month period?
A. According to OPM, “OPM discovers [income that exceeds the annual earnings limit] through the annual annuity supplement survey. If the annuitant exceeds the limit for the previous year, the supplement is reduced $1 for every $2 by which it is exceeded. If the annuitant earned a large enough sum of money, this reduction may be down to $0 so that no supplement is payable.”
May 7th, 2012 | Uncategorized
Q. What is the best way for me to find out exactly what amount of money I need to pay back my CSRS Offset account? I took out a refund a while back, then went back to work CSRS Offset again for a short while and got reinstated, but I need to pay back for annuity later when I retire. Can I do this by phone, online, local bank?
A. You’ll need to complete Standard Form 2803 and send it to the Office of Personnel Management. When you find out the amount you owe, go to your payroll office and work out a repayment plan.
November 25th, 2011 | Uncategorized
Q. I went into the Navy on April 20, 1976, got out March 19, 1980, and went to work for the Army Department as a full-time permanent employee. I worked from Feb. 2, 1981, to Jan. 29, 1988, under CSRS. I left to work in private industry and took a payout for my retirement at that time. I went back to work for the federal government on May 8, 1989, and worked for the Navy Department until Aug. 29, 1997, under the CSRS interim/offset plan. When the base closed, I transferred to the U.S. Postal Service on Aug. 30, 1997, and still employed by USPS. I understand I can still retire at 55 with 30 years, but my annuity payment will be reduced unless I redeposit money I took out plus interest. What happens when I become eligible for Social Security?
A. First, unless you redeposit the refund you received, with interest, your annuity will be reduced when you retire. Second, if you have fewer than 30 years of substantial earnings under Social Security, your Social Security benefit will be reduced, but not eliminated.