Ask The Experts: Retirement

By Reg Jones

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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Resignation and pension

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Q. I am 45 years old with 13 years of service under FERS and will be resigning this month to pursue other activities. I understand that I would eligible for a full pension (computed on my high-3) at age 62. That is 17 years away and, in the meantime, my defined benefit pension would remain static and thus be seriously eroded by inflation. Is there a way to protect myself against this within the pension system, or can I take a lump sum on separation and roll that into an IRA? If I take the lump sum, must I do it as of my separation, how is it computed, and does it represent only my contributions to the basic pension, or also those of the government? I have a separate Thrift Savings Plan, which I plan to roll into an IRA.

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Age 62 or 61?

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Q. I am FERS-covered and eligible to retire this year with 20 years but at age 61. Can I separate (or resign) first at age 61 this year and postpone the start of my annuity to 2014, when I am 62 to get the higher 1.1 annuity (instead of 1.0 at 61)?

A. No, you can’t. The only FERS retirees who are eligible to get the higher multiplier are those who retire on an immediate annuity at age 62 or later with at least 20 years of service.

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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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Termination and disability retirement

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Q. I saw this exchange on your site:

“Q. I am 60 and was hospitalized in March. I used all my sick and vacation leave because of a medical condition that will last more than a year, used all my [Family Medical Leave Act time] and have applied for disability retirement. I got a call from the nurse executive that if they don’t receive a letter from me within five days that I am resigning, they will have to terminate my federal service, since they say I am AWOL. This same executive in May completed the supervisor portion of my disability retirement application. Can they fire me even though I have applied for disability retirement?

A. Yes. However, whether you resign or they separate you, it won’t affect your application for disability retirement.”

Can you tell me if, when the retirement application is approved, the termination is then converted to a retirement action?

A. No, it wouldn’t. The SF-50 action would have already been effected, so whether it was a termination or separation, etc., if you later receive a disability retirement, this wouldn’t affect the SF-50 action that was already done.

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Separation before NTE date and unemployment compensation

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Q. If a federal re-employed annuitant is let go prior to his “Not to Exceed” date not for cause (i.e. to save money), is he entitled to unemployment compensation?

A. Highly unlikely because you are already receiving an annuity. However, you would have to check with your state employment office to be sure.

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Postponing annuity

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Q. I am considering separating from federal employment in July at 58 years old with 21 years and five months of federal service. I will postpone receiving the retirement annuity until I am 60. This will give me 60 years of age with 21 years and five months of service.

Since I am separating then doing a postponement of receiving my annuity until 60 which, per the Office of Personnel Management, is different than deferring an annuity, where you will not receive the special retirement supplement, will I get the FERS supplement when I start to receive my postponed annuity at age 60?

A. Yes. Because you are retiring and postponing the receipt of your annuity until age 60, you will receive the special retirement supplement until you reach age 62.

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Workers’ compensation and separation

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Q. I’m a postal worker under FERS. I started in 1988. I’ve been on workers’ compensation for the last four years. Now they are starting separation procedures.

I guess that’s code for termination, but am I eligible for retirement disability? And if so, do I have to take the retirement disability, or can I continue to collect workers’ compensation.

And if they separate me from the post office, does that mean that my workers’ compensation stops.

A. You’ll have to apply for disability retirement, which your agency is required to help you do. If you are approved for it and you continue to qualify for workers’ compensation, you’ll have to choose between the two benefits. As a rule, workers’ compensation is a better choice financially.

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Leave accrual

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Q. I am a Defense Department civilian employee under FERS. My date of birth is March 15, 1954. My EOD was Oct. 1, 2007, which gives me five years of service. I have accrued 111.75 hours of annual leave, 80 hours of sick leave and 8.5 credit hours as of the pay period ending Oct. 6. I do not meet eligibility requirements for an early retirement under FERS, so If I resign within the next few weeks, what is the process I need to go through, and what can I expect as far as payout? Will I lose any of my leave? What are my options, if any? I also have 32 years of service in the private sector.

A. When you separate from the government, your agency will give you a lump-sum payment for any unused annual leave and credit hours. As a rule, it will be included in your final biweekly paycheck. To receive a refund of your retirement contributions, you’ll need to fill out a copy of Standard Form 3106, Application for Refund of Retirement Deductions, and send it to the Office of Personnel Management. That form is available from your personnel office or at, click on Find Form(s).

While you won’t receive anything for your unused sick leave, if you ever returned to work for the federal government, those hours would be recredited to you. Because you were covered by FERS, you were earning Social Security credits for the entire time period of your employment. When you are eligible for a Social Security benefit, those credits will look no different from the ones you earned in the private sector.

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Medical disability delay

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Q. How long after the last day of a pay period should one begin receiving their first annuity check? My former human resources department placed a remedy ticket with the Defense Finance and Accounting Service, yet still no paycheck. The DFAS received my Office of Personnel Management paperwork five days after the last day of the pay period.

A. According to OPM, “Title 5, Code of Federal Regulations specifies the annuity commencing dates. For disability applications, the date the annuity begins is either the date after the last day of pay or the day following separation. The check dated the first of the month represents benefits for the preceding thirty days.”

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CSRS Offset

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Q. After working for approximately 11 years in the private sector and paying into Social Security, I joined the Foreign Service in March 1979. I resigned in July 1983 to get married and start a family. I got back the $4,000 I paid into my retirement. In June 1985, I rejoined the Foreign Service and because my original separation was for the purpose of marriage, I was brought back on at the same grade and step level I was at, my leave balances at the time of my separation were reinstated, and I continued to earn annual and sick leave at the same rate had I never left the Foreign Service. When I was reinstated, I had to pay into both Social Security and Foreign Service retirement systems.

On Nov. 20, 2003, I retired from the Foreign Service and began to collect my annuity, which started out at approximately $25,000 annually. On Dec. 1, 2003, I became a contractor and continued to work at (the same job) at the State Department and I have been a contractor working full time without a break ever since December 2003. I continue to receive my full annuity, as well, which is currently approximately $30,000 annually.

I have, to date, paid into Social Security for almost 38 full years.

I am wondering how I can figure out how much my annuity will be reduced when I reach 62 next year (April 2013).

You state:  “your CSRS annuity will be offset only by the amount of Social Security benefit you earned while covered by CSRS Offset,” but how do I calculate that amount? I began paying Social Security while employed by the government in June 1985. I retired from federal service and began collecting an annuity December 2003. That’s 18 years I paid into both. Can you please tell me how to do the math so I am not completely financially shocked when they start the cut? And may I assume that when I do finally collect my Social Security pension at age 67, God willing, it will be the entire amount I have earned, plus whatever I am currently receiving from my Foreign Service pension?

A. When you reach age 62, if you are retired, your CSRS annuity will be offset by the amount of Social Security benefit you earned while a CSRS Offset employee. The amount you receive will be the same. It will just come from two difference places: the Office of Personnel Management and the Social Security Administration. To estimate what the offset would be, use the following formula: Your Social Security benefit estimate at age 62 x your years of offset service rounded to the nearest whole number ÷ 40. If you retire at or after age 62, the offset will occur of the day you retire.

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Selling back travel comp time

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Q. I have heard that, upon retiring, there is a 24-hour limit on selling back credit hours, and one could accumulate about 448 hours of unused annual leave, if done exquisitely; and that religious comp time may not be sold back. What about travel comp time? May that be sold back? Is there a cap?

A. Compensatory time off for travel is forfeited:

* If not used by the end of the 26th pay period after the pay period during which it was earned;

* Upon voluntary transfer to another agency;

* Upon movement to a noncovered position; or

* Upon separation from the federal government.

Under no circumstances may an employee receive payment for unused compensatory time off for travel.

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Disability retirement

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Q. I am trying to find if my CSRS retirement can be changed to reflect a disability retirement? I retired three years ago because I could not cope with my inability to hear and understand telephone conversations and other issues in dealing with people. I am being treated for these health problems.

A. No, it can’t. To have been considered for disability retirement, you would have had to apply for it within one year of the date on which you separated from the government.

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Facing a hostile work environment

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Q: I am a 48-year-old employee with 18 years of government service in the U.S. Postal Service and the Veterans Affairs Department. I am on a two-week leave of absence due to stress from my supervisor and would like to resign without filing action so that I may find other government employment. What is the longest unpaid absence I can take so that I may try another type of employment while on unpaid leave status?

A: If you didn’t report to work, you’d be considered to be absent without leave and your agency could begin the process of separating you by adverse action. On the other hand, if you requested leave without pay (LWOP), you’d be able to do that only for as many days as had been approved by your supervisor. Once again, if you failed to report for work at the end of that time period, your supervisor could begin adverse action proceedings to separate you.

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