Ask The Experts: Retirement

By Reg Jones

Service computation date and temporary position

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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?

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Temporary employment and service computation date

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Q. I served four years in the military on active duty and seven years in the reserves. I was hired as an Army civilian temp in 1991 and was kept until 1993, then laid off. Then I was called back in 2004 as permanent employee under FERS. I paid back the deposit for four years of military time, and they processed a new SCD Merge and Purge of OPF complete.

Now my SF50 action gives a service computation date of 1998 (leave). The EBIS preliminary retirement report says my SCD is 2000. The left hand isn’t speaking to the right hand.

I worked 2½ years for the federal government. That should count as creditable service. I was even given back my sick leave of more than 500 hours. Shouldn’t I have to pay back the service credit payment? Why is the EBIS retirement estimate wrong?

Example:

Military time: 1976-1980 = four years

Temp time: 1991-1993= 2½ years

Current time: 2004-2013= 10 years

That’s 16½ years of working for the government. Simple math.

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Temporary federal work and retirement credit

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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.

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Pre-1989 nondeduction service and buyback

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Q. I worked as a temp from 1989 to 1994, when I was finally hired permanent, paying into FERS. What measure was passed disallowing me to deposit (make up) my FERS payment after Jan. 1, 1989? I’m losing five years toward my FERS retirement date while others before 1989 are allowed to buy back. It doesn’t seem fair that some can buy back their temp time and other can’t. I suspect during the hiring freeze in those days, there would be too many buying back those years, correct?

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GS pay

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Q. I was a term employee for one year and my term expired on Dec. 19. I was a GS-6 Step 7. I got an offer for a temporary position Jan. 11, but it comes with a $7,000 reduction in pay, and I was informed that it was management’s choice on whether to honor my previous salary. Can they do this? I am doing the same job that I was doing before, just for a different organization on the installation. My biggest concern is that I am disabled veteran over 30 percent, as well as on the spousal priority placement program, so if I decline this temp position, I knock myself out of the running for a permanent position.

A. There is no requirement that an agency match your previous salary level. You can negotiate with them to see if the amount they originally offered could be increased. Just as they have the option of setting the pay for that temporary appointment, you have the option of accepting or rejecting their offer.

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Service computation date

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Q. I started in the government on Feb. 21, 1984, as a full-time equivalent temporary employee not to exceed one year but managed to get another job in November of that year — FTE, 18 months to three years — which became a permanent job. FICA was being taken out of my pays. What will be my service computation date for retirement purposes? I will have 29 years next month and be 56 years old. My personnel office is telling me January 1987. I am under FERS.

A. Your agency is correct. Unless you make a deposit for that period of nondeduction service, you won’t get any credit for it in determining your length of service or in your annuity computation.

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Re-employment and sick leave carryover

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Q. My husband was a temporary federal employee for the Defense Department for five years. He was laid off in August. He had two years of military service, which he bought that time back, so in essence he has seven years of federal service. He is 60 years old. He put 10 percent of his salary in the Thrift Savings Plan. Should he leave that money in TSP or put it in another vehicle?

Also, when he reaches retirement age (62), will he receive a pension for the seven years of federal service? He left DoD with a sick leave balance — his annual leave he was paid for. Is it true, if he receives another government position within three years, his remaining sick leave will carry over?

A. Reg: He would be eligible for an annuity at age 62 if he had five years of full-time service from which retirement deductions were taken and he didn’t take a refund of those deductions when he left. The unused sick leave he had to his credit when he left wouldn’t be included when his annuity was computed. On the other hand, if he returned to work for the federal government, his sick leave would be restored.

Mike: He should leave his money in the TSP for as long as possible, and manage it there. Its costs and investment options are superior to those he’ll find anywhere else.

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Career status and temporary position

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Q. I am considering taking a State Department full-time temporary excepted appointment NTE 13 months with no re-employment benefits. I am a career-status employee with the federal government. State requires a four-day break between my current position and beginning service with them. How does this affect my retirement benefits and my career status? Will I not be considered career status when I apply for new jobs after my temporary position comes to an end?

A. When you separate from the government, if you are covered by the Federal Employees Health Benefits and/or Federal Employees Group Life Insurance programs, you will receive a 31-day extension of coverage at no cost to you. You will then have the option of enrolling in a health benefits plan under the temporary continuation of coverage provision for up to 18 months. For that coverage, you’d pay the full premiums plus 2 percent. You could also elect to have private life insurance coverage, for which you’d pay the full cost.

As long as you didn’t take a refund of your retirement contributions when you left, you’d be eligible for a deferred annuity at either age 60 or 62, depending on your total years of service.

As a rule, if you returned to work for the government, you would be considered a career employee and would get credit for your prior service in determining your eligibility to retire and in your annuity computation.

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Temporary position

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Q. I was a federal employee for over 10 years. Someone once told me if I take a temporary position with the government, I will lose my years toward retirement as if I never worked for the government. Can I accept a temporary position without jeopardizing my years? If I accept a temporary position, will I still be considered a reinstatement? Also, if I accepted a temporary position, can I still apply for and get a permanent position?

A. Whoever told you that taking a temporary position would cancel your prior years of federal service was mistaken. You can take a temporary job without jeopardizing that service. Whether it would be considered a reinstatement depends in part on the nature of the appointment and is something you’d have to check with your potential employer. Nothing prevents your applying for a permanent position if you are holding a temporary one.

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Temporary position and retirement annuity

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Q. I am retired under CSRS. If I were to accept a temporary or term position (i.e. NTE one year), would my salary be offset by my retirement or would I be able to collect both?

A. Unless you were hired into one of those rare positions that allowed you to receive your annuity and the salary of your new job, your salary would be offset by the amount of your annuity.

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Temp time

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Q. Can I buy back temp time?  I was a temp from Dec. 8, 2008, until March 2010. My service computation date  is Dec.  8, 2008. I am not getting ready to retire, but I was told that I could buy back my temp time to change my SCD.  Is this true?  If so, what do I need to do?

A. Since you SCD is set on the date that you began your temp time, you appear to have gotten credit for leave purposes. However, you cannot get credit for that time for retirement purposes. Nondeduction service performed after Jan. 1, 1989, isn’t creditable for either retirement eligibility or in an annuity computation

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Buying back temp time

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Q. Can I buy back temp time?  I’m currently a permanent employee and I was a temp for 15 months. I am not getting ready to retire, but; I was told that I could buy back my temp time.  Is this true?.

A. Unfortunately, you can’t get credit for that time. Under FERS, periods of nondeduction service performed on or after Jan. 1, 1989, aren’t creditable for either length of service or annuity computation purposes.

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Service computation

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Q. I am trying to find out if my temporary federal government employment during the 1990s can be credited toward my service computation date. When I was young, I worked briefly for two different federal  government agencies as a stay-in schooler. Later on, I worked for another government agency and did not stay there long either (not as a stay-in-schooler).  Later on after I left the military, I went back to the federal government for a year before I was hired at another agency.  My service computation date is based off my military service and my other two federal employers.  But the temp positions I did as a stay in schooler were not counted. My question is can they be counted?

A. Unfortunately, the law is clear. Periods of nondeduction service, such as temporary employment, performed on or after Jan. 1, 1989, aren’t creditable for either eligibility or annuity computation purposes.

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Eligible for early out?

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Q: I will be 52 years old in June and will have 20 years of service in September 2011. Five years of that was as a temporary employee. Could I be eligible to take an early out on the offer of adding five years to my age and five to my service? I do not participate in medical insurance here so that would not be a consideration for me.

A: Because your non-deduction service was performed after December 31, 1988, that time isn’t creditable for any retirement purpose. As for having five years added to your service time and age to make you eligible to retire, that isn’t going to happen. It’s just an unfounded rumor that’s been circulating for years.

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Buying back temp time

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Q: I worked in a federal job as a temporary employee where no retirement deductions were taken out for seven years. I was then converted to a permanent employee. I am now 62 years old with 33 years of federal service and a service computation date of 1977. I am looking at retirement but I am reading about the requirement to pay a deposit back so that my annuity will not be reduced by 10 percent. How do I go about determining what that amount is, and how do I pay it back?

A: Because your period of nondeduction service occurred before Oct. 1, 1982, you have the option of making a deposit to get credit for that time in your annuity computation or having your annuity reduced by 10 percent of the amount you owe, plus accrued interest. You can find out how much you owe by completing Standard Form 2803, Application to Make Deposit or Redeposit, available from you personnel office or online, and sending it to the Office of Personnel Management. Once you have that information, you can figure out which is the best option.

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Temporary time and career-employee status

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Q: I have worked for the federal government since February 2008 when I was hired as a temporary employee. In September 2009, the job converted to permanent. Is there any way to buy back my temporary time so that I could reach career status sooner?

A: No, there isn’t. You can’t make a deposit to get credit for any period of non-deduction service occurring on or after Jan. 1, 1989.

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Is the re-deposit worth it?

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Q: I was employed in temporary positions with the federal government from 1971 through 1986. During that period, I accumulated 10 full-time years of federal service during which I paid in only to Social Security because temporary federal employees were not allowed to partcipate in the Civil Service Retirement System. My first permanent federal appointment was in December 1986, at which time I enrolled in the Federal Employees Retirement System. My understanding is that for the approximately six years I worked prior to 1982, I will receive 90 percent of the CSRS annuity calculation without making a re-deposit. However, I must make a re-deposit to receive any CSRS annuity credit for the 1982-1986 period.

I understand that this re-deposit could have been made at any time since 1986, but I did not do so. Subsequently the amount has grown, with interest, to more than $25,000. If I paid this amount, it would increase my CSRS annuity calculation by about 6 percent. My calculation indicates that I would earn that $25,000 back in an increased retirement annuity after seven years. What are the pros and cons of making this re-deposit? I understand that my federal retirement annuity will have both a CSRS component and a FERS component. I intend to retire within the next two years.

A: You do need to make a deposit to get credit for any non-deduction service after Oct. 1, 1982. For service before that date, you have the option of making a deposit or accepting a reduction in your annuity that equals 10 percent of the amount you owe, plus accrued interest. It seems to me that you have already recognized the pros and cons: It’s a question of what you’d lose in earning power now by making a deposit versus what you’d gain over time in your annuity. Hovering over the issue is the uncertainty of how long you will live after retiring. The longer you live, the greater the likelihood that you’ll not only break even, but benefit from the deposit.

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Full-time temp work and retirement

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Q: When I was first hired as a federal employee in 1986, I believe my first few months were as a full-time temporary employee before I became a full-time permanent employee. Do these first few months count as creditable service time toward my retirement?

A: They won’t count unless you make a deposit for that time to the retirement fund.

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