Ask The Experts: Retirement

By Reg Jones

Annuity options for rehired annuitant

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Q. I retired as a GS-14, CSRS employee, at 30 years. If I take a GS-15 position, does the retirement stop, or is the pay just offset by the amount of the annuity? Do you pay into the CSRS retirement fund or FERS, or can one defer? Does health insurance continue from the retirement or from the new payroll?

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Rehired annuitant and supplementing retirement

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Q. I retired from the Department of Defense in 2007 under CSRS. I began employment in 2008 as a re-employed annuitant with another government agency. Since I make no retirement contributions as an annuitant, will I be able to buy this time to supplement my retirement?

A. Yes, you can make a deposit to get credit for that time. If you have between one and five years of additional service, you’ll receive a supplemental annuity. If you have at least five years of service, you’ll receive a supplemental annuity. Note: If you were hired into a position where you received both your annuity and the full salary of your new position, you won’t get any credit for that time and cannot make a deposit to do so.

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FERS employment after FERS retirement

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Q. I retired at almost age 58 with 20½ years’ creditable service in the National Park Service under FERS. I took the 20 percent-plus hit for going before age 62. I am considering a term position with the NPS with retirement benefits.

Can I stop my FERS annuity, take the term job, and then retire after I reach 62 so my retirement will be refigured at an older age with more time in service? Do I have to stop the annuity so many days before I take the job? Any other warnings on this situation?

A. No, you can’t stop your annuity. If you returned to work for the government, the salary of your new position would be offset by the amount of your annuity. If you worked for one year full-time, you’d be entitled to a supplemental annuity. If you worked for five years full-time, you’d be entitled to a redetermined annuity.

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Supplemental annuity and earnings test

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Q. I retired under FERS at age 56 and with 30 years. I am receiving an annuity and supplemental annuity and went back to work as a rehired annuitant for same office/agency. Is my supplemental annuity subject to the reductions for the earnings test?

A. Yes.

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VERA and returning to federal service

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Q. I retired under a VERA in 2008 from the U.S. Postal Service with 23 years and collect an annuity and have my health insurance deducted from my annuity. I pay the postal service premium for my health insurance, which is less than those of other government agencies. I am looking to be reinstated with another government agency.

1. Will my annuity end or decrease? If so, how will it be calculated?

2. Will I have to pay the higher premium for my health care through the new agency?

3. Will my annuity amount increase when I retire from my new position?

4. Will I keep my years of service in regards to my annual leave in my new position?

A. 1) There are three possibilities. One, if you retired before meeting the standard age and service requirements to retire on an immediate annuity, your annuity would stop and you’d be a regular employee, one who wouldn’t be able to retire again until you met the age and service requirements. Two, if you now meet the age and service requirements to retire, in all likelihood, the salary of your new positions would be offset by the amount of your annuity. Three, in rare cases, you would be able to keep both your annuity and the full salary of your new position.

You’ll need to check with you prospective employer to find out which arrangement would apply to you.

2) Yes, you’ll have to pay higher premiums than a Postal Service employee. In fact, as a Postal Service retiree, you should already be paying the higher premiums that apply to all non-Postal employees and retirees.

3) If you are hired into a position where your salary is offset by the amount of your annuity and you work for a full year, you’ll be entitled to a supplemental annuity. If you work at least five years, you’ll be entitled to a re-determined annuity. If you are hired into a position that allows you to keep both your annuity and the full salary of your new position, you won’t be entitled to any additional annuity benefit.

4) Your annual leave accrual rate will be based on your total years of government service. Note: Because you retired under a VERA, you would only be able to retire again if you met the age and service requirements.

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Rehired annuity

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Q. I am a GS-14 federal retiree, having retired in October. I worked continuously (no break in service) for 34½ years. My period of employment was entirely competitive service. I was classified as exempt from the federal Fair Labor Standards Act. I am interested in knowing how I would be paid if I decided to apply as a rehired federal annuitant. Is there a table that you can point me to with a step-by-step decision tree as well as examples of how a salary would be determined?

A. Nope. There aren’t any tables or decision trees. It would be up to you to find a job and negotiate with your potential employer to set a rate of pay within the pay scale for that grade. In most cases, your salary would be offset by the amount of your annuity. If you worked for a year full time, you’d be entitled to a supplemental annuity. If you worked for five years full time, you’d be entitled to a redetermined annuity.

Note: If you were hired into a position that allowed you to receive both your annuity and the full salary of your position, you wouldn’t be entitled to either a supplemental or a redetermined annuity. When you left, your salary would simply stop and your annuity would continue.

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Rehired annuitant and leave

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Q. I have been employed as a rehired annuitant under FERS for more than three years and will retire again. While re-employed, I received both my annuity and the salary of my new position. What is the procedure in reference to my annual leave? Will I be given a lump-sum payment for it? And as far as sick leave, will my hours incurred be added to my time as an annuitant.

A. While you will receive a lump-sum payment for your annual leave, you won’t get credit for unused sick leave, nor will you be eligible for a supplemental annuity. No one hired into a position where he receives both his annuity and the full salary of his position receives retirement credit.

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Rehire and annuity computation

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Q. I retired from federal service after 26 years. I became a rehired annuitant with a waiver for several years and could not participate in any retirement service. I am now returning to federal service without a waiver and without a break in service knowing my income will be reduced by my retirement annuity. Will I return to CSRS or FERS retirement system in this new capacity? If I stay for more than one year, will my final retirement annuity be refigured?

A. You will be placed in CSRS, the retirement system from which you retired, with the option of electing to be covered by FERS. If you work for at least one year, you’ll receive a supplemental annuity when you leave. If you work for at least five years, you’ll receive a re-determined annuity.

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DSR and supplemental annuity

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Q. If I go out on a Discontinued Service Retirement in May 2012, will I be eligible for a supplemental annuity when I reach my minimum retirement age in four years under FERS?  Also, if Congress later eliminates the supplemental annuity as some have suggested, will I still receive it since I will already be retired?

A. Yes.

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Retirement and re-employment

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Q: I will retire from the federal probation system in July 2012 at the mandatory age of 57. Can I be hired by the TSA in a non-law enforcement position and continue to receive my federal retirement? If not, what will be the arrangement?

A: In most cases, the salary of your new position would be offset by the amount of your annuity. If you worked for at least one year, you’d receive a supplemental annuity based on that service. If you worked for at least five years, your annuity would be recalculated as if you had never retired. On the other hand, there are some positions where you would be allowed to receive your annuity and the full salary. If you took such a position, when you retired your annuity would continue but you would receive no additional credit for that time. Before you accept an offer of employment from an agency, you’ll have to ask which scenario would apply to you.

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