Ask The Experts: Retirement

By Reg Jones

Service computation date and temporary position

Bookmark and Share

Q. I was originally hired in a temporary position by the federal government. I have heard that temporary time doesn’t count toward retirement. However, on my leave and earnings statement, the service computation date is from the time of hire into the government system. Does my time toward retirement count from my service computation date, or does it begin when I transferred into a nontemporary position?

Read the rest of this entry »

Tags: , ,

Postal Service annuity

Bookmark and Share

Q. I worked for the Postal Service from 1979 to 1981, then quit. I started working again in 1984 and quit again in 2000. Now I am employed at the Post Office again as a city carrier assistant. What will my retirement from the Post Office look like? I just turned 61. I have always had two jobs, some self-employment and others where I was an employee. Will I be entitled to an annuity from the Postal Service or, at this point, does it matter putting in more years there?

Read the rest of this entry »

Tags: , ,

FERS retirement contribution gap

Bookmark and Share

Q. I am under FERS. If the human resources office states that I did not pay into the retirement system from 1985 to 1986 and OPM says deductions were made into the retirement system, when the retirement package is submitted and if OPM was wrong in its initial determination, will I be afforded the opportunity to make that payment after the retirement package has been submitted?

Read the rest of this entry »

Tags: , ,

Military buyback

Bookmark and Share

Q. I was active-duty Navy (1980-84), then active Coast Guard (1991-2000). I received a tentative offer for employment with Army a few weeks ago (I’ve been a contractor since 2000). All required documents are submitted. Now I wait.

How do I buy my 13 years active duty into FERS? Can I use my existing 401(k) to pay this? How much would it cost me?

I also found out that, as of Jan. 1, the deduction for retirement went up to 3.1 percent. I guess a tentative offer before Dec. 31 doesn’t count for hired, so my pay is decreased. Adding on an increase in the cost of living (D.C. area), increase of health care coverage, retirement, Thrift Savings Plan, Social Security and decrease from my current salary, there’s not much of a paycheck left. What are the benefits of government employment? Any idea why Fort Belvoir does not have a cost-of-living adjustment?

A. Yes, you will be able to make a deposit to get credit for either or both your periods of active-duty service. When you are hired, your personnel office can explain how you do that and what it would cost. While you can use any source of money to make the deposit, I don’t know what the tax consequences of using your 401(k) would be.

The fact that you were made an offer of employment before the change in retirement deductions went into affect won’t change the fact that you’ll be required to pay the higher amount.

Your question about COLAs and Fort Belvoir makes no sense. Employees don’t receive COLAs, only retirees. And whatever COLAs one retiree gets are applied to the annuities of all eligible retirees. On the other hand, if you are referring to annual pay increases, these have been frozen for all employees for the past few years.

Tags: , , , , , , , ,

Deductions from annuity

Bookmark and Share

Q. Is there any way to figure out how much would be deducted from a Postal Service annuity check due to an early-out? I live in Jamaica, N.Y. Will they still deduct federal, state, Medicare, Social Security?

A. Federal taxes will be deducted, but New York state taxes won’t. Neither will Medicare Part A or Social Security taxes. That’s because those two are only deducted from earnings, not annuities.

Tags: , , , , , ,

High-3 calculation

Bookmark and Share

Q. I am a Postal Service level 21 employee, and will retire with about 41 years and 11 months in early 2013 with my high-3 close to my frozen level 21 value. When I retire, I will have been detailed to a level 23 position for about a year and a half, with a modest increase in pay during that time. Will the Office of Personnel Management use only my level 21 pay for annuity calculations or will the detail/higher level pay be considered?

A. A high-3 is based on the highest three consecutive years of average salary from which retirement deductions are taken. If retirement deductions were taken out of your pay while you were detailed to a level 23 position, it would be included in your high-3.

Tags: , , , ,

Retirement payments and earnings statement

Bookmark and Share

Q. I entered civil service Dec. 29, 1984. After contributing to CSRS for two years and accumulating approximately $3,500 in the retirement block of my leave and earnings statement, I got paid one day and the LES reflected about $9 in the retirement block. I went to payroll to inquire as to where the $3,500 already contributed had gone. This was about 1987, so I don’t remember the exact verbiage, but it was something like “You have a long time before you retire. Why are you worrying about that?” The payroll office was not even aware of the new FERS, and of course, all of them were under CSRS, so there was little or no concern about my contributions. Well, that time is nearing for me to draw my FERS retirement, and I still don’t know where the money went. Did I pay two years into someone else’s retirement?

A. Because you were hired after Dec. 31, 1983, you were placed in the CSRS Interim system (full Social Security plus reduced CSRS contributions). Since you didn’t have five years of coverage under CSRS on Jan. 1, 1987, you were automatically converted to FERS. The amount of retirement deductions taken from CSRS Interim pay were the same as those taken from FERS pay; the whole thing was a wash. Why your pay slips said two different things is something about which I can’t speculate.

Tags: , , ,

Retirement deductions, penalty

Bookmark and Share

Q. 1) What are all the deductions that are taken out of a federal employee’s check when they retire?

2) Do these reductions stay at the same amount prior to retirement?

3) I have 33 years of service at age 51. I know there is a 2 percent penalty for each year under 55, but what about the three years I worked over 30? What happens to those?

A. 1) Federal income tax; and, depending on your situation, state tax, FEHB, FEGLI and FEDVIP premiums, savings account deductions and allotments to organizations to which you belong. If you are receiving a lump-sum payment for unused annual leave or a buyout, Social Security and Medicare.

2) I don’t understand your second question, so I’ll have to skip it.

3) If you accept an offer of early retirement, your annuity will be reduced by 2 percent for every year you are younger than age 55 (1/6 of 1 percent per month). Your annuity will be based on all your years of creditable service. Since you have 33 years, your annuity would be computed using that amount of service.

Tags: , , , , , , , , , ,

Term employees and pension accrual

Bookmark and Share

Q. Do full-time term employees (civil servants) accrue time toward their years of service in calculating years for the pension plan? If I were to stay a term employee for the full six years, would that time count toward my pension plan the same as if I were “permanent status”?

A. If retirement deductions were taken from your pay, yes. If they weren’t, no.

Tags: , ,