By Reg Jones
Remarriage, pension and retirement
October 24th, 2012 | Uncategorized
Q. My 93-year-old father has been retired from the federal government since he was 62. My mother passed away 22 years ago. He wants to marry a very young woman so she can get his pension. I can’t imagine the government would allow this. He is adamant that she will receive his pension if he marries her.
A. Yes, he can elect a survivor annuity for a new wife. However, he needs to keep two things in mind. First, she wouldn’t be entitled to anything unless the marriage lasted for nine months before he died.
Second, the cost of such an election might be prohibitive. To pay for it, there would be two reductions in his annuity. One would be the standard deduction to provide the survivor benefit — a 10 percent reduction if he wanted to provide a full survivor annuity. The other would be a permanent actuarial reduction to pay the survivor benefit deposit. The deposit equals the difference between the new annuity rate and the annuity paid to him for each month since he retired, plus 6 percent interest. The reduction would be determined by the amount he owes divided by his age on the date his annuity is reduced to provide the survivor benefit. We’re talking big money here.
Tags: annuity, pension, remarriage, RETIREMENT, survivor annuity, Survivor benefits
CSRS Offset, survivor benefit and Social Security
October 12th, 2012 | Uncategorized
Q. My husband will retire in about three years under CSRS Offset. We will both be 65. Will the fact that we are opting for the full survivor benefit affect my Social Security benefits?
A. No, it will have no effect on your earned Social Security benefit.
Survivor benefits, state retirement and Social Security
October 9th, 2012 | Uncategorized
Q. My husband recently retired as a civilian working on a military base as a federal employee. Since I will have my own retirement (state of Virginia and Social Security), we opted for only a 20 percent survivor benefit for me should he die. Did we make a mistake? Since I can draw my own state retirement and Social Security, will this render me ineligible to draw his federal retirement should he die, since I will be drawing my own retirement? Are we wasting money by having that spousal benefit deduction taken from his check?
A. I don’t know if 20 percent was the right amount. What I do know is that you’ll be able to receive it, your own annuity and your Social Security benefit.
Tags: federal benefits, SOCIAL SECURITY, state retirement, Survivor benefits
CSRS and spousal survivor benefit from Social Security
October 4th, 2012 | Uncategorized
Q. I am 58 and will be retiring from the Defense Logistics Agency soon with 30 years of CSRS service. Before my government service, I earned 34 Social Security credits. I plan to work part time after CSRS retirement to earn the six credits needed for a small (windfall elimination provision) SSA pension. While the money won’t be much, is it important to get 40 Social Security credits to become eligible for a spousal survivor benefit from my wife’s SSA benefits?
A. Because you’ll be receiving an annuity from CSRS, a retirement system where you didn’t pay Social Security taxes, any Social Security spousal or survivor benefit will be affected by the government pension offset provision of law. The GPO would reduce those benefits by $2 for every $3 you receive in your CSRS annuity.
Tags: CSRS, government pension offset provision, SOCIAL SECURITY, Survivor benefits, WEP
Changing survivor benefits decisions
October 3rd, 2012 | Uncategorized
Q. My husband and I are civil service retirees. We elected not to provide survivor benefits to each other upon retirement several years ago. Is this irrevocable? I recently read something about the possibility of changing this election if the government declared an open season. I’ve never heard of that occurring for survivor benefits.
If this is true, does such an open season happen often? If could reverse our decisions, what type of lump sum or penalty would we incur to elect to provide the benefits?
A. There is no such thing as an open season for survivor benefits. The choice you made at retirement to not provide survivor benefits can’t be reversed.
Tags: CSRS, Survivor benefits
Survivor benefit, FEHB
October 2nd, 2012 | Uncategorized
Q. If an employee retires and elects an insurable interest for his spouse, will that payment be a monthly payment or a lump-sum payment? Also will the spouse be able to continue in FEHB if the annuitant had self and family coverage?
A. First things first. You are required by law to provide a full survivor benefit to your spouse unless 1) there is a court order assigning that benefit to a former spouse or 2) she agrees in writing to a lesser amount or none at all. The insurable interest annuity is designed to provide a benefit to someone dependent on you but not otherwise entitled to a survivor annuity. It’s my understanding that if your spouse is covered under an FEHB self and family option and entitled to an annuity, she will be eligible to continue that coverage when you die. To be sure, check with your personnel office.
Tags: FEHB, survivor annuity, Survivor benefits
Survivor benefit calculations
September 27th, 2012 | Uncategorized
Q. My husband is a CSRS employee who will retire in two years. I am a FERS employee who will retire in three years. My question is this: I have always paid into Social Security, and the projected survivor benefit is $2,298. If my husband is a CSRS retiree, would he see any of that survivor benefit if I were to die before he did? If so, how would I calculate that to get a feel for what he could expect?
A. If you were to die before your husband, any Social Security survivor benefit to which he’d be entitled would be affected by the government pension offset provision of law. The GPO would reduce that survivor benefit by $2 for every $3 he received in his CSRS annuity. You’ll find a GPO calculator at www.socialsecurity.gov/retire2/gpo-calc.htm.
Tags: annuity, CSRS, FERS, Government pension offset, SOCIAL SECURITY, Survivor benefits
Pension for federal employee’s spouse
September 27th, 2012 | Uncategorized
Q. My husband is drawing his pension from the federal government. At what age can I start drawing my portion of his pension?
A. You aren’t entitled to anything while he is alive. If he elected a survivor benefit for you, then you’d be entitled to that if he died before you.
Tags: federal retiree, pension, Survivor benefits
Retirement benefits and marriage
September 26th, 2012 | Uncategorized
Q. I am a retired civil servant receiving an annuity. I also receive survivor benefits from my late husband, also a civil servant. I am 72 and may marry a gentleman who is retired Navy and civil servant. Would either of us lose our benefits? He is the same age as I.
A. No.
Tags: annuity, military service, remarrying, Survivor benefits
Survivor annuity and regular annuity reduction
September 19th, 2012 | Uncategorized
Q. I recently attended a retirement seminar where the presenter stated that the cost of the survivor benefit does not go up over time. If I opt for a full survivor benefit and it costs $350 a month when I retire in two months, that will be the cost one year, five years, 20 years from now. If it’s true, great. True?
A. Either your presenter wasn’t clear or you misunderstood what was being said. There’s a one-time reduction in you annuity to pay for the survivor annuity. For example, if your unreduced FERS annuity was $50,000 and you elected a full survivor annuity, as required by law, your new annuity base would be $45,000. In effect, you would be paying for the survivor annuity through a permanent reduction in your own annuity.
Health care coverage
September 12th, 2012 | HEALTH INSURANCE Medicare Uncategorized
Q. I retired from the federal government at age 55 with survivor benefits for my husband, who is eight years younger than I am. I will be eligible for Medicare on Dec. 1. If I opt for the Medicare parts A and B, can I reduce the costs of Blue Cross/Blue Shield by going from family plan, which covers both of us, to the single plan for him only?
A. Not unless he is a federal employee or retiree and, as such, eligible to enroll on his own.
Tags: Blue Cross/Blue Shield, enrollment, family plan, HEALTH INSURANCE, Medicare, RETIREMENT, self only plan, Survivor benefits
Marriage and benefits changes
September 6th, 2012 | Uncategorized
Q. I am a CSRS employee with 30 years of service. If I marry a retired federal employee, will this reduce my monthly retirement benefits? Also, in the event of death, are we entitled to each other’s benefits?
A. Marrying either a federal employee or retiree would not affect your retirement annuity. Whether you would be eligible for each other’s survivor benefit would depend entirely on whether you elected to provide such a benefit and accepted the reduction in your own annuity to pay for it.
Tags: annuity, CSRS, marriage, Survivor benefits
CSRS Offset lump-sum payment in lieu of monthly annuity
August 29th, 2012 | Uncategorized
Q. Can a CSRS Offset retiree cash in or buy out his/her monthly annuity being received for a lump-sum payment, health and survivor benefits notwithstanding?
A. No.
Tags: annuity, CSRS offset, HEALTH INSURANCE, lump sum, Survivor benefits
CSRS and Social Security survivor benefits
August 22nd, 2012 | Uncategorized
Q. My wife retired from the USPS in 2003 under CSRS. Upon my death, will she receive the full Social Security survivor amount, or will that amount potentially reduce her USPS pension? Also will any retirement benefits from my private company plan affect her retirement pension?
A. Because she is receiving an annuity from a retirement system where she didn’t pay Social Security taxes, any Social Security survivor benefit to which she is entitled would be affected by the government pension offset provision of law. The GPO would reduce that Social Security survivor benefit by $2 for every $3 she receives in her CSRS annuity. Receiving a survivor annuity from your private-sector plan would not affect her CSRS annuity.
Tags: annuity, CSRS, Government pension offset, Survivor benefits
CSRS survivor annuity and Social Security
August 22nd, 2012 | Uncategorized
Q. My husband retired from the federal government in 2004 at age 55 with 33 years of service under CSRS. He passed away in 2007 and I started receiving his pension survivor benefits. He did not pay into Social Security long enough to receive those benefits. I am now 62 and applied for Social Security on my earnings since I do have enough quarters. Since I am receiving his federal government pension survivor benefits under CSRS, am I entitled to receive my own Social Security benefits since I had enough credits? My Social Security benefit amount is $277 per month.
The bottom line is that the pension is based on his earnings and the Social Security is based on my earnings. Would my Social Security benefit be affected by either the Government Pension Offset or the Windfall Elimination Provision? I answered every question in the Social Security application honestly and to the best of my knowledge, and they told me the amount I would receive.
A. Receiving a CSRS survivor annuity will not affect your entitlement to your own earned Social Security benefit.
Tags: CSRS, Government pension offset, SOCIAL SECURITY, Survivor benefits, windfall elimination provision
Survivor Benefit Plan
August 17th, 2012 | Uncategorized
Q. Is it possible to retain my Defense Department Survivor Benefit Plan and use it as the basis for continued Federal Employees Health Benefits coverage for my wife and dependent child if I were to pass away. I plan on retiring under FERS this year. I’d rather not take the FERS SBP as it is more expensive. I am retired military with 20 years and bought back the time?
A. No, it isn’t.
Tags: FEHB, FERS, military buyback, RETIREMENT, Survivor benefits
CSRS Offset and Social Security payments
August 14th, 2012 | Uncategorized
Q. I am a soon-to-be 68-year-old CSRS Offset employee returning to work in 1988. I did not pay back the retirement contributions I took out when I left government service in 1980 and realize my CSRS annuity will be reduced to pay this back. I plan on working several more years.
Is there any disadvantage or effect on my total retirement annuity (combination of CSRS and Social Security) if I start receiving Social Security payments now?
I plan on electing full survivor benefits for my wife, a FERS government employee 15 years younger. Is there any effect on the survivor benefit/annuity?
Is there any reason I should not start collecting Social Security now?
A. Even though you are still employed, because you have already reached your full Social Security retirement age, you can apply now and receive an unreduced Social Security benefit. Once you retire, your CSRS annuity will be offset by the amount of Social Security benefits you earned while covered by CSRS Offset. As you noted, your CSRS annuity will also be reduced to account for the fact that you took a refund of your retirement contributions and didn’t redeposit it. As a result, your annuity will be actuarially reduced based on the amount you owe, plus accrued interest.
If you elect a full survivor annuity for your spouse, your annuity will be reduced by approximately 10 percent to pay for that benefit. If, with her approval in writing, you elect a lesser amount, the reduction will be smaller.
Tags: annuity, CSRS offset, SOCIAL SECURITY, Survivor benefits
Survivor benefits
August 8th, 2012 | Uncategorized
Q. My wife and I are postal employees. I am CSRS, and she is FERS. If we choose the survivor benefit, upon either of our deaths, can the other of us collect our retirement and the other’s survivor benefit?
A. Yes.
Tags: CSRS, FERS, Survivor benefits
Effective date of postponed annuity
August 6th, 2012 | Uncategorized
Q. I am attempting to help my brother apply for his postponed FERS retirement. When he left government service, he was 55 with more than 10 years of service, so he was eligible for retirement, but he decided to postpone it to avoid the age reductions. He is now 65 and has never applied for his FERS annuity. I am filling out the forms for him, and I am unsure what date to put down as an effective date. I’ve read the OPM Web pages but can’t find information that pertains to someone applying for the postponed annuity after turning 62. He turned 62 on Nov. 11, 2008. Can his effective date be backdated? If so, would the date be December 2008? Will he receive back pay since that date? Or should the effective date be the month after he submits his application (August 2012)? I don’t want to use an effective date that might mean he will miss out on any annuity he may be entitled to. Also, as I understand it, since he had health and life insurance benefits for at least five years before separating, he will be eligible to continue those benefits upon retirement, correct? Will he be able to enroll his wife in FEHB even if she wasn’t covered while he was employed? To enroll her, will he have to elect a FERS survivor benefit for her?
A. Since a deferred annuity begins on the applicant’s 62nd birthday, put that down on the form. This will assure that he receives an annuity retroactive to that date.
Since he was covered under the Federal Employees Health Benefits and Federal Employees’ Group Life Insurance programs for at least five years before he left government, he will be able to re-enroll in both. And he will be able to cover his wife under the self and family option. However, unless he elects a survivor annuity for her, she won’t be able to continue that health benefits coverage if he predeceases her.
Tags: annuity, FEHB, FERS, OPM, Survivor benefits
FERS retiree and Medicare part B
August 6th, 2012 | Uncategorized
Q. I am a FERS retiree since September 2007, at which time I was 50. I elected survivor benefits for my spouse, who is 14½ years older than I am. She was 64 when I retired. I elected to remain in FEHB. Additionally, I did not stop working, as I took a job with a private firm before my retirement date and had medical benefits with that firm, in addition to my FEHB coverage. When my spouse was eligible to receive Medicare Part B the following year, she elected not to take it based on a briefing we received by OPM indicating that FERS retirees and their spouses would not be subject to a late enrollment penalty for Part B if she decided to enroll later as long as we were still covered under FEHB. Will my spouse be required to pay the Medicare Part B penalty?
A. According to the Social Security Administration, you won’t be penalized if “you didn’t take Medicare Part B when you were first eligible because you or your spouse were working and had group health plan coverage through your or your spouse’s employer or union.” Although this sentence is directed at you, it applies equally to your spouse.
Tags: FEHB, FERS, Medicare Part B, OPM, Survivor benefits