Ask The Experts: Retirement

By Reg Jones

Retirement funds

Bookmark and Share

Q. I was forced into applying for retirement, being on Workers’ Compensation and was “separated in 2002 with 25 years of service. I am 70 and still on Workers’ Compensation. I would like to withdraw my retirement lump-sum. Can  I still keep my life insurance that is deducted? I understand if Workers’ Compensation stops paying me, that I wont be allowed back on retirement if I do this. But I could not live on the amount anyway and I do need the money now. Read the rest of this entry »

Tags:

Mandatory removal

Bookmark and Share

Q. I am a Dual Status Military Technician GS-12 and I will reach my Mandatory Removal Date in 2019 when I am 50 and not eligible for retirement yet. This will end my Federal employment as a military technician. What options are there for me to gain new employment in the federal system and what impact does my previous GS-12 grade have? Read the rest of this entry »

Tags:

Military service time

Bookmark and Share

Q. I served eight years in the Navy Reserve and was honorably discharged. How do those years count toward retirement if I become employed by a federal agency?

A. Only time where you were called to active duty in the service of the U.S. would be creditable, and then only if you made a deposit for that time.

Tags:

Re-employment

Bookmark and Share

Q. I am a FERS retiree since 2003. May I work as a temporary fire lookout for the same agency?

A. There is nothing that would prevent you from being rehired by your former agency if it wanted to do so. However, you need to find out what the effect of taking that job would be. As a rule, the salary of a re-employed annuitant would be reduced by the amount of his annuity. If that turns out to be the case with the temporary lookout position, you’d end up working for nothing.

Tags: , ,

Deposits and redeposits, part 1

Bookmark and Share

Based on the mail I’ve been getting, there’s a lot of confusion about the rules governing deposits and redeposits to get credit for prior service in determining your eligibility to retire and having that time used in your annuity computation when you retire. In this column, I’ll deal with the rules that apply to Civil Service Retirement System and CSRS Offset employees. In my next column, I’ll do the same for Federal Employees Retirement System employees.

Deposits

The term “nondeduction service” applies to any period of federal government employment where retirement deductions weren’t taken from your pay. If you are a CSRS and CSRS Offset employee, you can make a deposit to get credit for that nondeduction service. The deposit equals the amount of the contributions you would have made to the Civil Service Retirement and Disability Fund if your job been covered by CSRS, plus accrued interest.

Retirement eligibility

If you are covered by CSRS or CSRS Offset when you retire, most kinds of federal government employment that aren’t covered by CSRS count toward the years of service needed to be eligible to retire. That includes federal government employment where only Social Security deductions were taken from your pay. It also includes employment covered by another federal retirement system, such as the Foreign Service, as long as you aren’t receiving any benefits for that time under the other system.

Annuity computation

When you performed that nondeduction service has a significant effect on the way it will be treated.

If you had any nondeduction service before Oct. 1, 1982, you’ll get credit for that time in determining your eligibility to retire; however, unless you make a deposit, your annuity will be reduced by 10 percent of the amount you would have paid into the fund, plus interest.

If you had any nondeduction service on or after Oct. 1, 1982, it, too, will be creditable for determining your eligibility to retire; however, if you don’t make a deposit to get credit for that time, it won’t be used in the computation of your annuity.

Redeposits

With one important exception, if you ever separated from the federal government, took a refund of your CSRS retirement contributions, and later returned, you’ll have to redeposit that money, plus accrued interest, before the time can be used in the computation of your annuity. However, if you don’t make the redeposit, you will still get credit for the time in determining your length of service for retirement, as well as for determining your “high-3.” Your high-3 is the average of your three highest consecutive years of pay, regardless of when they occurred in your career.

Here’s the exception: If you received a CSRS refund covering a period of service that ended before Oct. 1, 1991, you won’t have to pay the redeposit if you don’t want to. You’ll receive full credit for it in your annuity computation (unless you retire on disability). However, your annuity will be actuarially reduced based on your age and the amount of the redeposit you owe, including interest, on the day you retire.

Contribution rates

Beginning with the first pay period in January 1970, the contribution rate for CSRS has been 7 percent (7.5 percent for law enforcement officers and firefighters beginning with the first pay period in January 1975). If the nondeduction service you performed was before that date, the contribution rate will be lower.

Interest rates

Interest for nondeduction service earned before Oct. 1, 1982 (and refunded service if the application for a refund was made on or after that date) equals 3 percent. Interest for nondeduction and refunded service on or after Oct. 1, 1982 equals 3 percent through Dec. 31, 1984. Thereafter, a variable rate is applied. (In 1985 the rate reached an all-time high of 13 percent. In 2014 it’s at an all-time low of 1.625 percent, the same as it was in 2013.)

If you owe any deposits or redeposits, go to www.opm.gov/forms/pdf_fill/sf-2803.pdf and download a copy of Standard Form 2803, Application to Make Deposits or Redeposits. Once you’ve filled it out, take it to your personnel office. When they tell you how much you owe, you can decide if it’s worth the cost.

To help you make that decision, use the following formula: 0.015 x your high-3 x 5 years of service, plus 0.0175 x your high-3 x 5 years of service, plus 0.02 x your high-3 x all remaining years and full months of service.

As you can see, if you have over 10 years of actual CSRS service, each additional month of credit your get by making a deposit or redeposit is worth 1/6 percent. That’s 2 percent per year.

If you decide to make the deposit, you can pay it in a lump sum or set up a payment schedule, with payments as low as $50 a month. Just remember. The longer you wait to complete the payment, the more you’ll have to pay in interest.

Reg Jones was head of retirement and insurance programs at the Office of Personnel Management. Email your retirement-related questions to fedexperts@federaltimes.com, and view his blog at blogs.federaltimes.com/ federal-retirement.

Tags: ,

Unused leave

Bookmark and Share

Q. How soon would I receive my lump-sum payment for unused annual leave when I retire?

A. Only your agency payroll office can answer that question.

Tags: ,

FERS postponed retirement

Bookmark and Share

Q. My wife just turned 57 and has a little more than 23 years of service. Her MRA is 56. I believe if she takes a postponed versus a deferred retirement, she will be eligible to get her full retirement annuity when she turns 60. What form should be filled out for a postponed retirement? I only see one for a deferred retirement.

A. The form you saw was for CSRS retirees only. When your wife applies for her postponed FERS retirement, she would need to fill out Retirement and Insurance Form RI 92-19. Deferred/Postponed Retirement FERS, available at www.opm.gov/forms/pdf_fill/ri92-19.pdf.

 

Tags:

Retirement age

Bookmark and Share

Q. If you worked full time for the federal government for six years and part time for four years, and retired at age 62, can you obtain federal retirement then?

A. Yes. In fact, you would only have to have five years of service to be entitled to a retirement annuity at age 62.

 

Tags:

Temporary federal work and retirement credit

Bookmark and Share

Q. I worked as a temporary hire for two years aboard the Thomas G. Thompson, the University of Washington research vessel, and received time stubs for those periods. I also had my merchant marine Z-Card at the time. I am now employed as a federal officer and want to know if this time counts toward retirement.

Read the rest of this entry »

Tags: ,

Retiring early on sick leave

Bookmark and Share

Q. I work for USPS under FERS. On Feb. 4, 2015, I will be 57 and have 30 years of service. I will also have approximately six months of sick leave. Can I use my sick leave as days worked and retire six months earlier?

Read the rest of this entry »

Tags: , , ,

Retirement requests and HR inaction

Bookmark and Share

Q. I recently was hired by the VA National Call Center as a legal administrative specialist after many years of separation from the federal government. I worked as a senior personnel management specialist for three federal agencies in Boston and left in 1986 when my husband was dying. I have been waiting for more than five months for my service computation date and leave category to be adjusted. When I left federal service, we did not have the benefit of computers, but such adjustments were typically made in less than a month for our employees. As I am a senior, having my time properly credited for CSRS retirement and having access to my correct accumulated leave is important. Repeated contacts to our HR liaison are fruitless. I’m laughingly told by management that some people have waiting four years for their leave to be corrected. I will be retired in four years. I have been researching the regulations and cannot find any required timelines for these actions. Is this correct? Do I have any recourse? I am also appalled that employees are told not to contact HR directly at our VA Columbia National Call Center. We are told to submit a request by email to our supervisors.

Some HR issues are none of my supervisor’s business. This is totally inappropriate. Please advise on recourse for this issue also. I tried to access an email the VA’s Office of HR Management but could not find one.

Read the rest of this entry »

Tags: , , , ,

Retirement and health insurance premiums

Bookmark and Share

Q. I am 65, have worked for USDA intermittently since 1965 (recurring and temporary in the early years) and have been in my present position with USDA-ARS since 1999. I plan to retire (in FERS) in two or three years. My insurance provider for more than 10 years has been Blue Cross/Blue Shield Federal Employee Program. I am signed up for Medicare Part A. My wife, several years younger than I, is a health provider in private practice. She and my two children (elementary school age) are now covered under the federal employee plan above. My understanding is they can remain covered by the plan when I retire (although some aspects of plan coverage change because of my enrollment in Medicare Part A). After retirement, can I continue to pay premiums (covering me and my family) of the same amount as I now pay? In other words, will the U.S. government continue to pay the same portion of the premium as it does now?

Read the rest of this entry »

Tags: , , , , ,

Retiring while on sick leave

Bookmark and Share

Q. May a federal employee retire with all earned benefits while on sick leave, or must he return to work for a specified amount of time?

Read the rest of this entry »

Tags: ,

Pension eligibility

Bookmark and Share

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

Read the rest of this entry »

Tags: , , , ,

Re-employed annuitant and recalculated CSRS pension

Bookmark and Share

Q. I retired from CSRS with 36 years’ service. I have since become a re-employed annuitant and will hit the five-year mark soon. Because of the nature of the position, I did not have to give up my retired pay. When I retire, will I be eligible for a recalculated CSRS pension assuming I elected to make a deposit for the five years as a re-employed annuitant?

Read the rest of this entry »

Tags: , , ,

Two pensions?

Bookmark and Share

Q. I retired from the Marine Corps after 21 years of service in 2002 and I’m receiving retirement pay. I began working with the State Department and will be eligible to retire at age 59 with 20 years of service. Will I be able to retire from the State Department and receive a pension and still receive my pension from the Marine Corps?

Read the rest of this entry »

Tags: , , ,

Residency and creditable service

Bookmark and Share

Q. I’m a federal employee in a Veterans Affairs Department hospital. Before actual employment, I spent three years doing medical residency in VA. Will those three years in training count toward my creditable service for retirement?

Read the rest of this entry »

Tags: ,

Hazard pay and annuity computation

Bookmark and Share

Q. I have been told by different people that environmental [hazard] pay is figured into your retirement. Can you explain this for me?

Read the rest of this entry »

Tags: , ,

Survivor annuity

Bookmark and Share

Q. My father who lives in Puerto Rico, is retired from the Postal Service, and is 64 years old. He told me that if he passes, I’m listed to get his pension which would be $1,200 a month, what he gets now. He is not married, and I’m curious if it’s that simple. Am I eligible? Will I get that much? For how long? I am 34.

Read the rest of this entry »

Tags: , , , ,

Deferred annuity

Bookmark and Share

Q. I am a Postal Service employee under FERS, I am over 55 years old and have about 26½ years of service. If I left USPS to work somewhere else in the private sector, would I be able to collect my annuity payments from USPS every month, or would I have to wait until I retire completely to start collecting?

Read the rest of this entry »

Tags: , , ,