Ask The Experts: Retirement

By Reg Jones

Disability and early retirement

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Q. I am getting ready to retire should we be offered early retirement. I am working for the Defense Department and planning on retiring under a disability. Would this affect the Voluntary Early Retirement Authority/Voluntary Separation Incentive Pay? I would, of course, wait to get accepted with that and then retire under disability.

A. Because you have a disability such that you are or would be eligible for disability retirement, you aren’t eligible for a VSIP. On the other hand, if you were offered an opportunity to retire early and met the age and service requirements to do so, you could accept it.

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Last salary check

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Q. I took the Voluntary Early Retirement Authority, and my retirement date is Feb. 28. I’m due a lump-sum payment for my unused annual leave. I was told in a letter I would get this in my last salary check. I just got paid on the 15th. So what date is considered my last salary check since my first annuity check is March 1?

A. Since salary checks are payments for the preceding two weeks of work, the one you just received would be for that final pay period. While lump-sum payments for unused annual leave are often included in the final paycheck, sometimes they aren’t. You’ll have to check with your agency’s payroll office to find out when to expect that payment.

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Early retirement eligibility

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Q. Under FERS, I can retire at 20 years and age 50+ only if early retirement is offered. But because I am now “mission critical,” I am not eligible for Voluntary Early Retirement Authority even if it is offered, which means I have to wait until I am 65 with 30 years before I can retire. Is this correct?

A. No. Depending on your age and years of service, you can retire on an immediate unreduced annuity at age 60 with 20 or at your minimum retirement age with 30. MRAs range between 55 and 57 depending on your year of birth.

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VERA and special retirement supplement

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Q. I took a Voluntary Early Retirement Authority in 2009 at age 52. If I turn 56 (my minimum retirement age) on April 19, will I receive the special retirement supplement starting on my May 1 check, or do I have to wait a full 30 days after I turn 56 to receive the supplement beginning with my June 1 check?

A. If you reach your MRA on April 19, you wouldn’t receive the annuity supplement payment until the June 1 check (for May 1-30). That June 1 check would also include the annuity supplement due for the partial month of April.

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VSIP and disability

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Q. I have retired from the Postal Service in Jan. 31 on a Voluntary Early Retirement Authority with an incentive payment. I recently was awarded Social Security disability. I am 54 years old. Am I required to apply for federal disability? I understand the offset. Will I lose my voluntary separation incentive payments in May?

A. You don’t have to apply for disability retirement. However, the fact that you are  or would be eligible for disabiltiy retirement would bar you from receiving the VSIP.

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VERA eligibility

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Q. My organization has been approved for Voluntary Early Retirement Authority. I am covered by FERS and will have 30 years creditable service May 24 at age 57. Am I still eligible to request a VERA after I have reached the 30-year mark?

I also have two years of temporary service that I can buy back for approximately $2,500. What would be the monthly pension amount with 30 years versus 32 years, if I purchased the two years of temp time?

A. Although you could accept a VERA, there wouldn’t be any point in doing that if you already have the age and service needed to retire on an immediate annuity. As a FERS employee, every year of additional service is worth 1 percent in additional annuity. You can figure the dollar amount using this formula: .01 x your high-3 x all years and full months of service.

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Postal Service VERA

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Q. I am a 55-year-old Postal Service employee with more than 26 years of creditable service who has been on active duty under Title 10 for the past 10 years.  Late last year, I was offered the Voluntary Early Retirement Authority, which I accepted and submitted the irrevocable application along with all of the required documents.  On Jan. 31, I received a phone from the Postal Service human resources office to inform me that my retirement could not be processed because I am on active duty. I was also told that I had to return to pay status to be eligible for retirement.

1.  Is leave without pay or on military leave a pay status?

2.  Under the Uniformed Services Employment and Reemployment Rights Act, my employer is obligated to rehire me after five years of military service. What would guarantee that I will be rehired after 15 years of military service?

3.  Since the Postal Service is offering the VERA because of reorganization, what precludes them from honoring the offer for retirement?

4.  Do I have any legal recourse to pursue this issue?

A. 1. No.

2. No.

3. You aren’t an employee.

4. No.

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Early retirement options

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Q. Can I retire at 51 with 22 years of service?

A. Not unless your agency offers you that opportunity under the Voluntary Early Retirement Authority. If you aren’t offered one but still want to leave, you could resign and apply for a deferred retirement at age 60.

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VERA eligibility

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Q. I am a 46-year-old Department of Defense firefighter with 25 years of service (three years and eight months of active military time, for which I have not made a deposit), and was told I was not eligible for VERA because I was under the MRA. Is this true or is there another reason I’m not eligible?

A. Your agency is correct. The age and service requirements for early retirement are: age 50 with 20 years of service or at any age with 25. You don’t meet the first set of criteria because you haven’t reached your MRA.

You don’t meet the second set because you haven’t made a deposit to get credit for your active-duty military service.

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VERA/VSIP and part-time work

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Q. Our installation is offering a Voluntary Early Retirement Authority/Voluntary Separation Incentive Pay. My service computation date is in November 1988, and I will be 52 this May. I have 15 years of part-time employment. A majority of these years were at 40 hours, biweekly. Approximately three to four years were 48 hours, biweekly. How can/do I calculate my estimated retirement pay, other than contacting ABC and requesting calculation? I’m afraid they will not be able to provide info before the deadline to apply for the VERA/VSIP.

A. You’ll find out how to do that by going to www.opm.gov/retirement-services/publications-forms/csrsfers-handbook/c055.pdf and scrolling to Subchapter 55B.

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VERA, special retirement supplement and MRA

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Q. I’m a FERS employee with 23 years of service and I’ll reach my minimum retirement age in July. If a Voluntary Early Retirement Authority is offered and separation is required before July, do I forfeit the special retirement supplement, or is it just delayed until I reach MRA?

A. FERS employees who accept a VERA before they reach their minimum retirement age will begin receiving it when they reach their MRA.

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VERA eligibility

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Q. I am a permanent, full-time, nonconditional federal employee (GS-7) under the FERS retirement program.  I am 64 years old and will have five years of service Sept. 14. Am I eligible for any of the early retirement programs even though I do not have more than 20 years of service?

A. Until you reach age 62, you aren’t eligible to retire. However, when you turn age 62, you can retire on an immediate annuity. That opportunity is open to any employee who is at least age 62 and has five years of service.

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VERA and state taxes

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Q. Does retiring under a Voluntary Early Retirement Authority meet Pennsylvania’s requirement that the “taxpayer must have been eligible to retire by meeting the age or service conditions of the retirement plan” for a pension to be tax-exempt? I was 53 years old when I retired and had 33 years of service under CSRS.

A. That’s a matter between you and the Commonwealth of Pennsylvania.

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Early retirement

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Q. I am older than age 50 with 20 years of federal service. I fall under FERS. If I’m offered an early-out and I accept and then turn around and take another federal position, what are the ramifications? If I’m given a Voluntary Separation Incentive Pay for leaving, I realize that I will have to pay that back before starting my job. Will I be able to collect that if I hold another federal job, or does that discontinue once I start the federal job?

A. Your annuity would stop and you’d just be a regular employee. You wouldn’t be able to retire again until you either met the standard age and service requirements to do so or were offered another Voluntary Early Retirement Authority.

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Military time and creditable service

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Q. I was in the Air National Guard full time for 14 years. Now I work for the Postal Service and have been there 16 years. I bought back my military time and had the 30+ years funded. Then, I received a letter from USPS human resources that my military time was not federally creditable, and they returned my buyback money. The post office is saying I was paid by the state and not by the federal government. I really wanted to be a part of the Voluntary Early Retirement Authority this month, but this has become a mess. If my military time is state would my post office (federal time) count as state if I got a state job?

A. Service in the National Guard is never creditable unless you were called or drafted into the actual service of the United States. If you were called to active duty for training (ANACDUTRA) while an employee of the federal government, you’ve already received credit for that time and no deposit would be required.

Whether your service in the National Guard would be creditable if you were hired by a state is something you’ll have to ask its employment office. I’m only able to answer questions about federal benefits.

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Creditable service and VERA

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Q. I worked for the Department of the Interior from April 25, 1988, as a seasonal employee until I was converted to career conditional on Dec. 4, 1988. I was then hired at the Postal Service on March 11, 1989. Can I buy back my seasonal time? Will that help with creditable service toward the Voluntary Early Retirement Authority? Can sick leave and annual leave be credited toward the VERA? I do not have the age and my current service computation date is Dec. 4, 1988. I am hoping to reach the 25 years at any age, but it appears that I will miss it.

A. You can make a deposit for nondeduction service performed before Jan. 1, 1989. Fill out a copy of Standard Form 3108, Application to Make Deposit or Redeposit, and send it to the address on the form. The Office of Personnel Management will tell you what you owe. Then you can decide if you want to do that.

Neither annual nor sick leave can be added to make you eligible for a VERA. You have to meet the age and service requirements to do that.

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VERA and special retirement supplement

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Q. I am 52 and have been with the Postal Service for 24 years. Will I be able to collect the special retirement supplement at 52, taking the early retirement, or will I have to wait until a certain age?

A. You’ll have to wait for the special retirement supplement until you reach your MRA (minimum retirement age), which is 56.

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VERA and annuity reduction

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Q. I am planning to retire Feb. 21, 2014. I will be 60 years old and will have completed 10 years and one month of service. I am prepared to take the permanent reduction for being under age 62.

1. If a Voluntary Early Retirement Authority/Voluntary Separation Incentive Pay is offered at the time of my planned retirement, would I qualify for one or both?

2. I was told that if a VERA/VSIP is offered at the time of my retirement, I could approach my leadership and ask that the 10 percent reduction be waived. I believe this was because I would be fully eligible, so the VERA would not be applicable. Is this true?  If so, how do I approach this?

A. Yes, if a VERA or VSIP was offered, you could accept it. However, if you did, it wouldn’t affect the 5 percent-per-year age penalty. That waiver only applies to early retirees who are age 50 with 20 years of service or at any age with 25. Since this is a matter of law, your agency would have no say in it.

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VERA

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Q. I have been mobilized on active duty with the military. If the Department of Justice allows for early retirement while I am mobilized, can I seek Voluntary Early Retirement Authority once my activation is over? If so, what is the window of time?

A. Only if you have returned to your civilian position, the offer applies to that position, and you retire within the time period that the VERA is being offered.

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VERA, MRA and special retirement supplement

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Q. I work for USPS. I heard from one of my supervisors that there was an article in Federal Times about postal employees told by OPM that if they took the 2009 VERA before reaching their MRA, the employee would not be eligible for the special retirement supplement at the time they take the VERA, but that when they reached their MRA, they would be able to receive it.

She said that after these employees who hadn’t reached their MRA took the 2009 VERA reached their MRA, they were being told that because they took the VERA before they had reached their MRA, they would not be able to get the supplement. She also said that a nationwide class action lawsuit had to be filed by the American Postal Workers Union, which resulted in a “one-time exception” being granted by the Social Security Administration to get those retirees their supplement.

I was also told the problem was with the Social Security Administration, which I was told governs the supplement program, and that OPM overstepped its authority in telling employees who took the VERA before they reached their MRA that they would still be able to get the supplement after retirement when they reached their MRA. Is there any truth to this?

A. Your supervisor is so full of it that it’s a wonder she can still breathe. Employees who retire on a VERA before reaching their MRA will begin receiving the special retirement supplement when they reach their MRA. OPM didn’t overstep its bounds and, as a result, there isn’t any class action suit in the works.

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