By Reg Jones
FERS payback and pension
January 29th, 2013 | Uncategorized
Q. I was checking for a friend who quit about four years ago. He took out his FERS and Thrift Savings Plan money. Can he pay back his FERS so he can receive a pension? He had about 14 to 15 years in.
A. He can only redeposit the refund of his FERS contributions if he returns to work in a position that confers FERS coverage.
Tags: FERS, pension, Thrift Savings Plan
Receipt of retirement funds indicated on leave and earnings statement
January 16th, 2013 | Uncategorized
Q. When do retirees receive the cumulative retirement amount reflected in block 19 of their leave and earnings statement, and in what increments? Isn’t this in addition to the annuity and Thrift Savings Plan amounts retirees will receive?
A. The figure you see on your pay slip is the cumulative amount you have contributed to the retirement system. At retirement, a portion of that amount and the government’s contribution will be returned to you in your monthly annuity payment. To find out the proportions of each and how the federal tax code applies to them, go to www.irs.gov/pub/irs-pdf/p721.pdf.
FYI, the only way you could receive a refund of those contributions is to resign from the government before you are eligible to retire. Of course, that would cancel any entitlement you might have to a retirement benefit.
Tags: annuity, leave and earnings statement, RETIREMENT, Thrift Savings Plan
Early retirement effects on annuity
October 9th, 2012 | Uncategorized
Q. My service date is June 22, 1987, giving me 25 years of government service. I am under FERS; however, I am 43. If I take the early out my agency is offering, will my pension be penalized because I am under the age of retirement? Would my TSP lose value if I leave early? Would my monthly annuity be reduced under FERS? Would the IRS apply the 10 percent penalty tax because I have not reached the appropriate age to begin my withdrawals? Or does this not apply under the early out?
A. The age penalty on a FERS annuity doesn’t apply to someone retiring under the Voluntary Early Retirement Authority. You’d get the annuity you were entitled to based on your high-3 and years of service. However, you wouldn’t be able to receive the special retirement supplement until you reach your minimum retirement age, which in your case would be 56 years and 10 months.
Tags: 10 percent penalty tax, FERS, IRS, special retirement supplement, Thrift Savings Plan, VERA
Thrift Savings Plan payout
September 25th, 2012 | Uncategorized
Q. I have been contributing to the voluntary contributions program for many years. I understand that when I retire, I can move the interest earnings into my Thrift Savings Plan account and then the principal can be taken out as either a cash payment or an annuity. However, I was informed that the cash payment or annuity is an either/or option and that I can’t designate 50 percent for an annuity and 50 percent for a cash payment. Is this correct?
A. Yes.
Tags: annuity, cash payment, Thrift Savings Plan, voluntary contributions program
Position eliminated
September 13th, 2011 | Uncategorized
Q. If my position is eliminated, when am I eligible to receive any of my retirement benefits? I’m almost 48 with a little over 24 years of federal service and I’m under FERS. Also, what kind of penalties would I incur by withdrawing funds from my TSP accounts?
A. Because you would not meet the age and service requirements for early retirement, your only immediate benefit would be severance pay. If you left your contributions in the retirement fund, you would be eligible for a deferred annuity at age 60. If you are covered under the Federal Employees’ Group Life Insurance program, you would receive a 30-day extension of that coverage at no cost to you. You would also be offered an opportunity to covert to an individual policy for which you would pay the premiums. If you are covered under the Federal Employees Health Benefits program, you’d receive 30-day extension of coverage at no cost to you and the opportunity to extend that coverage for up to 18 months under the temporary continuation of coverage provision of law. You would pay the full cost of the premiums plus 2 percent to cover administrative costs.
Also, You’ll incur the 10 percent penalty on withdrawals from your TSP account until you reach age 59 1/2 unless you meet one of the exceptions specified in the notice at https://www.tsp.gov/PDF/formspubs/octax92-32.pdf.
Tags: FERS, RETIREMENT, Thrift Savings Plan
Moving leave to TSP accounts
June 1st, 2011 | Annual leave
Q: I read on Fed Weekly that some congressional discussions occurred on the subject of allowing federal workers to transfer all or part of their unused sick and annual leave into their Thrift Savings Plan accounts. Are there any discussions on this topic and if so, do you know the status and if and when this would be implemented?
A: While there may have been discussions, none of them have resulted in a legislative proposal being introduced in either chamber of Congress.
Tags: annual leave, sick leave, Thrift Savings Plan, TSP, unused leave
FERS retirement
January 19th, 2011 | Uncategorized
Q: I will begin my first federal job soon under FERS. I turned 60 about one month ago. Must I work until age 65 to be eligible to receive Social Security or Thrift Savings Plan payments? I will have approximately four years and nine months of creditable service.
A: To be eligible for a FERS annuity, you would need to have five years of creditable service and be at least age 62. To receive a Social Security benefit, you would need to have 40 credits, which equals 10 years of contributions to Social Security. Because you will have reached your full retirement age at 65, you could begin receiving a Social Security benefit at that time and not be affected by the Social Security earnings limit. That limit would apply if you began receiving a Social Security benefit before reaching your full retirement age and were still working.
Tags: FERS, RETIREMENT, SOCIAL SECURITY, Thrift Savings Plan
Adding unused leave to TSP?
December 20th, 2010 | Annual leave LEAVE
Q: I understand Congress has a bill to allow federal employees, upon retirement, the ability to roll our unused annual leave into the Thrift Savings Plan. Has this been decided upon as of yet?
A: No.
Tags: annual leave, LEAVE, Thrift Savings Plan, TSP, unused leave
Social Security and TSP funds
June 21st, 2010 | Earnings test RETIREMENT SOCIAL SECURITY Special category employee retirement
Q: For those covered under the law enforcement provision of the Federal Employees Retirement System, is the Social Security earnings test applied toward funds received from their Thrift Savings Plan if those amounts exceed the earnings test for the special law enforcement officer/firefighter Social Security supplement after their minimum retirement age?
A: No. The Social Security earnings test only applies to earnings from wages or self-employment.
Tags: Earnings test, Federal Employees Retirement System, FERS, firefighter, law enforcement, SOCIAL SECURITY, Thrift Savings Plan, TSP
Military time and employment status
June 16th, 2010 | EMPLOYMENT LEAVE Veterans' employment benefits
Q: I understand that a military deposit has an effect on a person’s service computation date, Thrift Savings Plan funds and leave issues, but does it have any bearing on a new hire’s employment status? To clarify, will it change a person from “career conditional” to “career” if they have more than three years of military service?
A: Making a deposit for active-duty service in the armed forces has no effect on a new hire’s employment status. As a rule, he must complete a probationary period and have three years of substantially continuous service to receive a career appointment.
Tags: conditional employment, military buyback, military service, SCD, service computation date, Thrift Savings Plan, TSP
Sick leave and TSP
November 23rd, 2009 | Uncategorized
Q: Will civil service employees who have accumulated sick leave be able to roll this into their Thrift Savings Plan? If so, is there a limit?
A: No you can’t. Unused sick leave has no cash value. It can only be added to your actual service and used in the computation of your annuity.
Tags: sick leave, Thrift Savings Plan, unused