Ask The Experts: Retirement

By Reg Jones

Mandatory retirement

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Q. I am facing mandatory retirement from a covered law enforcement position after 25 years. I would like to take a noncovered position in a different job series that’s nonlaw enforcement. Can I collect my full retirement? How would my retirement be affected?

A. You could either retire and begin working in another position or transfer to another position and continue working. In the first case, the salary of your new position would, in most cases, be offset by the amount of your law enforcement officer annuity. In the second, you would continue to be a salaried employee. You could retire from that position at any time and begin receiving your LEO annuity. Depending on how long you worked, you might be entitled to a supplemental annuity or a redetermined annuity.

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Q. I am 54 years old and was employed with a federal agency for 17 years from 1979 to 1996. Upon resignation to enter the private sector, I withdrew 100 percent of my CSRS contributions. If I return to full-time federal employment this year, do I have the option of buying back the creditable service of 17 years for the same amount that I withdrew in 1996? Secondly, would I be able to continue with CSRS rather than FERS upon re-employment? Would I be eligible to retire after eight more years of federal employment service?

A. If you returned to work for the federal government, you’d be placed in CSRS Offset (CSRS and Social Security) with the option of transferring to FERS. On your return, you would be able to redeposit the money you took out and get credit for your prior service. However, it wouldn’t be the amount that was refunded to you; it would be that amount plus accrued interest. If you made the redeposit, you’d get credit for your prior service in determining your total service and in your annuity computation; if you didn’t, you’d only get credit for it in determining your length of service. Either way, you’d be able to retire at age 62.

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Postal job moving

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Q. I work for the Postal Service. If my job moves 75 miles away and I only have 15 years of FERS under my belt but will not move, what would be the difference in dollar terms under FERS of resigning with 14½ years at 43 years old vs. putting up with commuting or renting during the workweek for five more years of FERS to make 20 total years at 50 years old. Last high-3 basic pay would be around $56,000 per year.

A. If you really want an answer to your question, you’ll have to hire a financial adviser to do the math. However, even if you provide him with more information, such as the rent you’ll be paying, you’ll only end up with a rough estimate.

On the other hand, I can provide you with some facts that may help you to do the math yourself. Whether you resign or are separated by adverse action, you wouldn’t be eligible for a deferred annuity until age 62.

Assuming that your high-3 was $56,000 when you left, your annuity would be $8,120 (.01 x $56,000 x 14.5). It wouldn’t be increased by any intervening cost-of-living adjustments nor would you be able to re-enroll in the Federal Employees Health Benefits of Federal Employees’ Group Life Insurance programs when your annuity began.

If you accepted the transfer and continued to work, you’d receive the salary of that position, increased by any longevity and/or annual pay adjustments, thus increasing your high-3. You’d also be able to continue your FEHB and FEGLI coverage. While you cite age 50 with 20 years service as your goal, you wouldn’t be able to retire then unless presented with an early retirement opportunity. If you weren’t, the earliest that you could retire would be at your minimum retirement age, which would be 56 and 10 months. Since you wouldn’t have 30 years of service, you’d be retiring under the MRA+10 provision, and your annuity would be reduced by 5/12 percent for every month you were under age 60 when you retired.

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FERS new hire versus transfer

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Q. I am a FERS employee with less than five years of service. If I accept a new position with the government after Jan. 1, will I pay the new, higher FERS contribution rate or will it be considered a transfer (i.e. not a “new hire”) and thus exempt from the new contribution rate?

A. It would be considered a transfer and not subject to the “new hire” rate.

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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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FERS transfer, Social Security and spousal benefits

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Q. I am a retired federal worker who worked from 1972 to 1987 under CSRS then transferred to FERS in 1987.  I left the federal government in 1995 with enough quarters to qualify for Social Security but with much less than 30 years of substantial earnings. In 2010, at age 60, I began getting my government annuity, part based on CSRS and part on FERS. This year at age 62, I am eligible to receive Social Security benefits. As I understand it, FERS transfers are not affected by the offset program but are affected by the windfall elimination provision. How would spousal benefits be affected, and would I still be able to take the higher of the two (mine or my husband’s)? When my husband dies, do I get half of his with no offset/WEP? Finally, when I apply online, is the spousal benefit considered and the higher of the two then provided?

A. Because you transferred to FERS, you aren’t subject to the government pension offset provision of law; however, as you noted, you are subject to the windfall elimination provision if you have fewer than 30 years of substantial earnings under Social Security.

You will be able to receive the higher of either your own or your husband’s Social Security benefit. If your husband were to die, your benefit amount would depend on your age and on the amount your deceased husband was entitled to when he died. If he was receiving reduced benefits, your survivor benefit would be based on that amount. When you apply online, the information you provide to the Social Security Administration will allow them to calculate and give you the higher of the two benefits.

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Accrued time transfer

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Q. I was employed by the Postal Service for more than five years with a start date of March 17, 2007. I applied for a position with the Defense Department, DCMA division, and was accepted. I started work with DoD on April 9. I have received three paychecks to date, earning six hours of leave per pay period, so my start date with the federal government went back to March 17, 2007. I had accrued approximately 136 hours of annual leave and 327 hours of sick leave. I am in the new position, and human resources in Kansas is telling me my time does not carry over. Am I losing out on sick time?

A. Whoever told you that is mistaken. Your accrued sick and annual leave is transferable. If you get an argument, make them show you in writing where it says that it isn’t. If they can’t and still hold the same view, ask them to refer the question up the line. Eventually, your agency headquarters or Office of Personnel Management will square them away.

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VCP transfer into Vanguard Roth IRA

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Q. I will have 40 years with the Internal Revenue Service in 2012 and plan to retire either this year or in 2013. I have been contributing to both the Thrift Savings Plan and the Voluntary Contributions Program. I plan to leave the TSP contributions to the G Fund alone and let it grow.

The VCP is another matter. I have a Roth IRA with Vanguard and would like to transfer all of the VCP to the Vanguard Roth IRA.

I know I am required to pay tax on the interest the VCP has earned in the year received. How do I do this transfer? There seems to be a lot of information about the TSP, but I am finding it difficult to find information about the VCP.

A. To find out how to make the transfer, you can call the Office of Personnel Management at 888-828-9451 from 8 a.m. to 5 p.m. Eastern time. In the Washington, D.C., area, you can reach them at 202-606-0706. You may also contact them by email at, or write to:

U.S. Office of Personnel Management

Voluntary Contributions

1900 E Street, NW, Room 3H30

Washington, DC 20415

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Unused sick leave

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Q. I am a TransFERS employee with 12 years of CSRS service and 25 years of FERS service. At the time I transferred, I had approximately 600 hours of unused sick leave. I now have approximately 1,400 hours of unused sick leave. I understand that I would receive credit for the 600 hours earned under CSRS and credit for half of the balance earned under FERS. Will the 600 hours be credited as extra CSRS time and be subject to the 2 percent multiplier or will it all be tacked onto my FERS time and subject to the 1 percent multiplier?

A. Sick leave hours up to the maximum number you had when you transferred to FERS will be added to your actual CSRS service and computed using the CSRS formula. Because you are retiring before Jan. 1, 2014, half of any remaining hours of sick leave will added to your actual FERS service and computed using the FERS formula.

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Transferring to another agency

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Q: How long can my current agency retain me when I have accepted a position with a different agency? I accepted a position at the same grade but at a different series. My new/gaining agency has requested a release date 17 days in the future, meaning I will remain with my current agency for the next full pay period. However, my current agency has requested that I remain in place for 31 days, which is two pay periods. This is unacceptable to me and is being done out of spite. An HR specialist in my current agency indicated that this was permissible because it is a lateral-grade position. However, a friend that is an HR supervisor in another agency informed me that two weeks notice is the maximum amount of time my current agency can retain me, because it is not a transfer within the agency, but to an external agency. I have asked the HR specialist to provide me with the OPM reg that allows my current agency to retain me for 30 days. After two days, she indicated she is still researching it. I have scoured the OPM site and I have found nothing.

A: I’m not aware of any regulation that sets a specific time period between when one accepts a position at another agency and leaves his or her former agency. By convention, it is worked out between the two agencies. While it can be as little as one pay period where a promotion is involved, it may also be longer, but rarely more than two pay periods unless the employee is needed to complete an important assignment.


BRAC-related leave rate

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Q: Next year, I will move out of my Base Closing and Realignment Commission-related job and take a new, non-BRAC job at a lower pay rate. Will my BRAC-restored leave be paid out at my rate of pay at time of payout, at my rate of pay just before/upon moving out of BRAC, or at the various rates of pay at which the leave was earned?

A: It will be paid at the rate of pay you were earning on the date your position transfered.

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Working while on LWOP

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Q: I am a career federal employee. I still have a couple of years before I can retire. I have a family emergency on the other side of the U.S.  that I must attend to for several months. I have tried for months to find another federal job in that city, but have had no luck. I do have a hardship transfer approval. I have been told by my supervisors that I could use leave without pay. My question is this: Can I hold a nonfederal job while I am taking LWOP? I will need income when I move, and if I cannot find a federal job, I have to work somewhere.

A: There is nothing that would bar you from taking a nonfederal job while you are on leave without pay. However, what you do shouldn’t interfere with the purpose for which the LWOP is granted.

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Correcting your service computation date

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Q: I transferred from the Veterans Affairs Department to the Defense Department and my service computation date was not carried over. How do I fix this?

A: You will have to put pressure on your new agency’s personnel office to obtain the necessary information to correct your records. While it will be sorted out in the long run, it’s better to settle the matter ASAP.

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Time transfer unlikely

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Q: If I am going from a federal job to a state job, does my federal time carry over to the state retirement plan? I reside in Illinois.

A: You’ll have to ask someone in your state employment office; however, the likelihood is that it doesn’t carry over.

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Changing agencies, retirement accounts

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Q: Does time worked at the Federal Reserve count toward time worked for the Small Business Administration?

A: It only counts if you waive any right to benefits from the Federal Reserve retirement system for that prior service and make a deposit into the Civil Service Retirement and Disability Fund. Your current agency can help you work out the details and may be able to arrange the transfer of the contributions you made to the Federal Reserve retirement system into your current retirement system.

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Recredited sick leave

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Q: I was a government employee for just over three years (2000-2003) and had accumulated a considerable amount of sick leave during that period. After five years in the private sector, I am now back with the government. Did I forfeit all of the sick leave that I had on the books when I separated in 2003, or is that sick leave transferable to my current balance?

A: Your previous unused sick leave balance should be recredited to you.

— Reg Jones

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