Ask The Experts: Retirement

By Reg Jones

Refund on buyback?

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Q. Worked 33 years for the U.S. Postal Service under Civil Service Retirement System and four years in the Marine Corps. Back in the 1970s, I bought back my USMC time so I could draw both Social Security and civil service retirements as I worked two jobs. Now, with offset in place, I cannot draw Social Security due to USPS retirement. Can I get a refund for my buyback payment since I will never draw Social Security?

A. As a CSRS employee, there wouldn’t be an “offset” that would cancel any Social Security benefit to which you might be entitled. Instead, you’d be subject to the windfall elimination provision. The WEP reduces — but doesn’t eliminate — that Social Security benefit. As for getting a refund of the deposit you made for your active-duty service, you can’t unless you resign from the government before being eligible to retire and ask for a refund of all your retirement contributions.

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Annual leave

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Q. After working 26 years for the Postal Service, I transferred to the Defense Department.  Postal Service employees have a higher annual leave carryover limit than other federal sectors. I currently have 466 hours of annual leave and the max carryover for  DoD is 240.  Will I lose all annual leave hours in excess of 240 if not used by Dec. 31?

A: According to OPM, “The Postal Service Reorganization Act provides that an employee transferring between the USPS and other agencies may not lose benefits if the employee transfers without a break in service. The employee is entitled to carry over the higher leave ceiling that he or she had at the USPS. All 466 hours of annual leave will transfer to DoD and only the hours in excess of his or her USPS ceiling will be subject to use or lose.

“An employee transferring from USPS is entitled to the maximum carryover ceiling (personal leave ceiling) provided by USPS upon transfer to another agency. The employee is entitled to the higher carryover ceiling unless the employee’s annual leave balance is reduced at the end of the leave year. Any reduction in the annual leave balance at the end of the leave year will result in a lower personal leave ceiling, and the employee’s personal leave ceiling will be subject to change until it is reduced to the 240-hour ceiling provided in title 5 of the United States Code.

“In your example, the employee’s USPS leave ceiling will serve as the employee’s personal leave ceiling. So if the 466 hours of annual leave is within the employee’s USPS leave ceiling, that will be the employee’s personal leave ceiling as an employee of DoD. The employee’s personal leave ceiling will continue to reduce anytime the employee’s annual leave account has less than that amount at the end of the leave year. As long as the employee’s annual leave balance is under his USPS ceiling at the end of this leave year (December 31, 2011, for this leave year), that will be his or her new personal leave ceiling.’

 

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The final word on work-year hours

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Q: I am a postal inspector under the Civil Service Retirement System. I plan on retiring with more than 2,500 hours of sick leave. The Office of Personnel Management shows a sick leave conversion chart rate based on 2,087 hours a year. The Postal Service human resources department uses a chart based on 2,080 a year. Upon retirement, does OPM accept the Postal Service conversion rate, or do they calculate based on their own conversion chart? Is there a reason the Postal Service uses a different conversion chart?

A: By law, a work year is 2,087 hours long. OPM will credit any unused sick leave using that number. If you have more than 2,087 hours of sick leave, go back to the beginning of the chart and start over.

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Eligible for SRS after voluntary early retirement?

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Q: I was recently offered voluntary early retirement from the U.S. Postal Service. I have 30 1/2 years of credible service, I am under the Federal Employees Retirement System, and I am 51 years old. I am also considered a reduction-in-force employee because our district office has been closed. Do I qualify for the special retirement supplement?

A: You would be eligible for the special retirement supplement when you reach your minimum retirement age, which is 56.

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Postal retiree and health insurance

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Q: If I retired from the postal service but am still carrying the medical coverage through them. Is it necessary to elect the Part B coverage? I am not drawing Social Security because I am not eligible until I turn 66. I am under the Civil Service portion of the postal retiree plan and am still carrying my spouse on my medical coverage.

A: You don’t have to sign up for Medicare Part B if you don’t want to. It’s optional.

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Disability retirement and nonfederal re-employment

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Q: I receive federal disability retirement from the U.S. Postal Service after 27 1/2 years of service. My disability was approved for anxiety and severe depression. During my postal career, I was a city letter carrier. I have an opportunity to take a job as a medical courier. Do you think this job will jeopardize my continuing to receive disability? The two jobs are a bit similar in nature, however the stress level of the new job would be far less. I do not want to jeopardize my disability in any way. There is no way I could ever return to the stress of the Postal Service with my mental conditions.

A: If you are under age 60 and accept a nonfederal position, your disability annuity would only be discontinued if your income from wages or self-employment was 80 percent or more of the current rate of base pay for the position you held when you went on disability retirement. If you accept a federal job, your salary will be reduced by by the amount of your disability annuity and will also be subject to the 80 percent limitation.

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What comes after max CSRS coverage?

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Q: Where does money go after I have the maximum amount of time under the Civil Service Retirement System? I am still working at the U.S. Postal Service.

A: After a CSRS employee has 41 years and 11 months of service, he is entitled to the maximum amount of earned annuity, which is 80 percent. If he continues to work, contributions will still be deducted from his salary; at retirement, he can either receive a refund of those contributions or use the money to buy additional annuity which, like unused sick leave, isn’t subject to the 80 percent limit.

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Health coverage in retirement for dual-fed couples

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Q: There was an answer to a question that I would like clarification on. The writer, who was retired, said he and his wife were under his family health plan, but now they don’t need to cover their son, and he wants to switch to self-only coverage for both he and his wife (they are both retired federal employees). How is this possible? When you retire, you have to pick the self or family option, and your spouse also has to pick the self or family option. I assume the wife dropped her coverage in this case because you can’t be double-covered.

My question is this: Can I retire and opt out of insurance coverage, let my husband keep family coverage and cover me, and then when we no longer need family coverage (my son is 20 years old), can I pick my health benefits up again and have self-only, with my husband also having self-only?

I was under the impression that if you didn’t retire with your health insurance, then you could never pick it up again. How could they both switch to self-only then? My husband is going in as a rural carrier, I am retiring. I want him to take out the family insurance option because his percentage he pays will be way less then the percentage I will pay after I retire. I would love to retire with self-only, he could have the family option to cover my son, but I was told that’s not possible. I was told it’s best if I keep the family option when I retire, but I will be paying 75 percent as the ratio flip-flops after you retire.

A: You are correct that dual coverage isn’t permitted in the Federal Employees Health Benefits Program. If a husband and wife are both federal employees, they have a choice: One of them can elect self and family coverage, or they may both elect self-only coverage. When they retire, they have the same options, and they can change their decision later if they so choose. For example, one of them can elect self and family coverage and the couple can later decide to have separate enrollments, or they can elect separate enrollments at retirement and later one of them can elect self and family coverage, with the spouse canceling the self-only enrollment.
 
I don’t understand your comment about the premiums flip-flopping after you retire. Unless the spouse carrying the enrollment is an employee of the U.S. Postal Service, he will pay the same percentage of the premiums when retired as when employed. Premiums paid by Postal Service employees are lower as a result of collective bargaining agreements. Postal Service retirees pay the same percentage of their premiums as all other retirees.

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Retroactive buyouts for USPS retirees

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Q: According to the American Postal Workers Union, the grievance to give postal employees who took early out in 2008 and 2009 severance pay is now 15 months old. Is this going to happen? I voluntarily left, moved over for the next person, then in October 2009, they came out with the $15,000 buyout. I feel that postal employees who retired early really got the shaft.

A: No one who accepts an offer to retire early is eligible for severance pay. On the other hand, what you may be asking is whether the U.S. Postal Service is going to give a buyout payment to those employees who weren’t offered one when they retired in 2008 and 2009. To the best of my knowledge, there is no basis in law for them to do that.

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Tracking down life insurance benefits

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Q: My brother retired from the U.S. Postal Service a few years ago. He passed away a few weeks ago, and his wife asked the San Antonio post office how she could apply for his insurance. She was told that he had no insurance. He specifically told me that he did: I retired from civil service and have insurance, and my brother said that he had the same sort of coverage. If he has a claim it would be a great aid to his widow.

A: His widow should call the Office of Personnel Management’s Retirement Information Office at 888-767-6738 and report his death. Make sure she has his retiree identification number at hand. It begins with the letters “CSA.” They will know whether she is entitled to a survivor annuity and a benefit from the Federal Employees’ Group Life Insurance program. They will also provide her with the paperwork needed to file her claim.

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‘High-3″ and service buyback

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Q: I can retire in February with 31 years of service under the Civil Service Retirement System as a part-time/flex employee in the U.S. Postal Service. My “high-3″ years were from 2006-2009. Will they use these years to calculate my annuity? Is it always the last years? Is it always three consecutive years, or is it the highest consecutive three years? As a PTF, my hours changed yearly as to how many offices I worked in. Also, when I was hired in 1979, I never heard of “buying back” or anything related. Since I made no deposits, or didn’t know anything about any deposits, from what I have read, my time from 1979 to 1986 will not count toward my annuity unless I “buy back” these years.

Did the Postal Service not take anything out of my pay for those years? would a buyback be worth it, and how would it affect my retirement computation?

A: Your high-3 is always your highest three consecutive years of average salary. Under CSRS, all periods of nondeduction service are always creditable for determining your eligibility to retire. Getting credit for that time in your annuity computation depends on when the service was performed. It if was before Oct. 1, 1982, you have a choice: You can either make a deposit of the amount that would have been deducted from your salary plus accrued interest, or have your annuity reduced by 10 percent of what you owe. If it was on or after Oct. 1, 1982, you will have to make a deposit for that time to get credit for it in your annuity computation.
 
To find out how much you would have to deposit, go to the Office of Personnel Management’s website and download a copy of Standard Form 2803, Application to Make Deposit or Redeposit. Complete the form and send it to OPM. Once they’ve gotten back to you, you’ll have a better idea about whether it makes good financial sense to make the deposit. If it does, you agency payroll office can work out a payment schedule.

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USPS and disability retirement

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Q: My husband has been working for the U.S. Postal Service for 26 years. He is 53 years old. He is entitled to Federal Employees Retirement System benefits at age 56, but he wants to retire now due to health issues. Can he do that?

A: The only way he could retire before reaching his minimum retirement age would be if he was approved for disability retirement. To find out if he is eligible, he’d have to file for disability retirement and, at the same time, file for Social Security disability benefits. His personnel office can help him do that.

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Post office survivor annuity

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Q: My husband passed away Jan. 25, 2009, and I’m receiving his Social Security benefits, as well as benefits from the U.S. Postal Service. If I remarry, will I lose the benefits from the USPS? I know I will still collect his Social Security.

A: Unless you were to remarry before age 55, your survivor annuity wouldn’t be affected. If you did remarry before age 55, that annuity would be suspended. It could only be restarted is the marriage were ended by annulment, divorce or the death of the new spouse.

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Counting injury leave toward retirement

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Q: If I received compensation for two years because of an injury at the U.S. Postal Service, does this delay my retirement for two years?

A: If you were in leave-without-pay status while in receipt of workers’ compensation benefits, you’ll receive full credit for that period of time in determining your length of service and your high-3. LWOP while receiving Federal Employees Compensation Act, or FECA, benefits isn’t subject to the six-month limitation in a calendar year, as is other LWOP.

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Mark your calendar: Leave year end dates

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Q: For the 2010 year, what is the last day for U.S. Postal Service bargaining unit employees to reduce their annual leave to 440 hours? Is it Jan. 1, 2011? Is it true that the following year, we would have until Jan. 14, 2012?

A: The 2010 leave year ends Jan. 1, 2011. The 2011 leave year ends Dec. 31, 2011, and the 2012 leave year ends Jan. 12, 2013.

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Taxing disability benefits

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Q: I am need to clarify whether disability retirement becomes nontaxable once a person reaches retirement age. I cannot get a clear answer from the Office of Personnel Management or the Internal Revenue Service. I have gone over IRS Publications 721 and 525. My father left the Post Office on disability in 1972. He is now 78 years old, and I am trying to file his tax returns. He is not eligible for Social Security.

A: There isn’t a tax break for a federal disability retiree unless he is totally disabled for all gainful employment. The retiree’s age has no bearing on that. Because OPM only determines whether an employee is no longer able to provide useful and efficient service in his current job or one at like grade and pay, and he isn’t eligible for a Social Security disability benefit, the Internal Revenue Service is the only agency that can make a determination on taxable disability income. You need to talk to an IRS representative in your area to find out how do that.

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Retirement dates and leave limits

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Q: This question is in reference to your Dec. 15, 2009, article, “It’s not too late to retire in 2009, or plan for 2010 or 2011” I am planning to retire in 2011; a co-worker is planning to retire in 2010. As per your article, it looks like the planets are lining up, as the leave year and calendar year will end at the same time. Both of us are Civil Service Retirement System employees and work for the U.S. Postal Service. The 2010 leave year ends Jan. 1, 2011. In the Postal Service, we can carry over 560 hours of annual leave, but my co-worker is planning to not take any annual leave, which will result in a total of 768 hours (560+208).

Our questions: If my co-worker retires on Jan. 1, 2011, will she get all of her 768 hours of annual leave as a terminal leave check and not lose the 208 hours? Will the terminal leave check be counted as income for 2011 tax return? Is it the same for me if I retire Dec. 31, 2011? And, can you retire on a Sunday?

A: According to the USPS, the carryover limit for bargaining unit employees is 440 hours; Executive Administrative Schedule employees can carry over 560 hours. These are the maximum amounts for which a USPS employee can receive a terminal leave payment. You can retire on any day of the week you want; however, why anyone would want to retire on the first day of a pay period escapes me.

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MRA+10 and the special retirement supplement

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Q: I have been working at the U.S. Postal Service for 26 years. I am 58 years old, and I will retire very shortly. I know that I cannot collect the special retirement supplement under these conditions, but will I start to receive the supplement when I turn 60? Or does retiring under the Minimum Retirement Age +10 provision require me to forfeit the SRS totally?

A: No one who retires under the MRA+10 provision is eligible to receive the special retirement supplement. That’s the law.

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Military time and retirement

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Q: I was retired medically from the Army with less than 20 years of service. My health improved enough for me to work at the U.S. Postal Service. I was then called back to active duty to complete my 20 years of service, serving an additional three years and eight months. I returned to the USPS in 2005. I retired from the Army with a military pension and Veterans Affairs Department disability of 50 percent. Can I still receive my military pension and VA disability and buy back only those years I returned to active duty to get credit for those years for federal retirement?

A: Because you are receiving military retired pay based on an active-duty career in the armed forces, your only option would be to make a deposit for all your periods of active duty service and, at retirement, waive your military retired pay.

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USPS and disability

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Q: I’m a U.S. Postal Service employee. For more than two years, I’ve been on periodic roll with the Labor Department. My physician’s report was disputed, and the Labor Department sent me to its physician. Eventually there was a referee physician picked by the Labor Department. The referee physician determined that I was unable to work until I had knee joint replacement.

I’ve had five knee surgeries, four of them job-related, and at this time will not have the surgery. My question is, is it possible to be put on permanent periodic roll by the Labor Department, or do I have to apply for disability? I live in New Jersey and would like to relocate out of state, and I fear that the Labor Department will try to employ me after I move.

A: Only your agency can tell you whether you could be put on a permanent periodic roll. As for disability retirement, you’d need to work with your agency to determine if you are eligible to apply for that benefit. For starters, your agency would need to certify that you are unable to perform the duties of your current position or any other position for which you are qualified at the same grade or pay in your commuting area.

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