Ask The Experts: Retirement

By Reg Jones

Break in service and vested time

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Q. I am a 29-year-old federal employee and I may have to move at some point in next few years because of my husband’s work or if I go back to school. I have been working for 2½ years and I am starting to build up my Thrift Savings Plan (all L2050; if I leave, I am hoping to return to a job in the federal government at some point). I am wondering how vesting works for both TSP and my FERS annuity. Will I have to work a consecutive five years to keep both before I can leave, or do I bank that time if I decide to come back? For example, if I work for 3½ years then leave and come back two years later and work for 30+ years, will I keep what was put into the TSP and my annuity during my first 3½ years when I come back?

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Health benefits after retirement

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Q. I am a 51-year-old FERS employee whose minimum retirement age is 56. I will have over 30 years of service when I reach the minimum retirement age.  A couple of years ago, I went under my wife’s health plan.  We incorrectly assumed that she needed five years to become vested and that we could just stay under her plan when we retired (as with FERS). However, she is a Non-Appropriated Funds Defense Department employee and would need 15 years.

I am picking up my Federal Employees Health Benefits insurance again so that I will have five years under the plan when I reach the MRA. If I were to retire at 56, my understanding is that I can (a) begin receiving a reduced annuity immediately or (b) defer receiving my annuity until I reach 62. I was told that if I begin immediately receiving a reduced annuity, I can keep my FEHB and still benefit from the government contribution.

What happens if I defer the annuity until I am 62? Will I need to pay the whole premium, plus 2 percent, for the years between 56 and 62? My wife will likely work until I am 62, so could I go under her health insurance between 56 and 62 and then pick up my FEHB again when I begin collecting my annuity?  Under either of those scenarios, could I change my coverage from self-only to self and family to add my wife to my coverage when I am 62?

A. I think you are suffering from a misunderstanding, which I hope to clear up. If you will have 30 years of service when you reach your MRA, you could retire on an immediate unreduced annuity. And you would also be entitled to the special retirement supplement, which approximates the Social Security benefit you earned while a FERS employee. If you had five years of continuous enrollment in the FEHB, you could carry that coverage into retirement and, unless you are a Postal Service employee, the premiums you’d pay as a retiree would be the same as those you have been paying as an employee.

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Vested time

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Q. If I retire from the Veterans Affairs Department with less than 10 years’ service but am vested, what are my options for receiving that retirement? I started with VA at 56 years and 10 months and will be vested on Feb. 16 for three years. If I retire any time before I complete 10 years, which would be at 66 years and 10 months of age, how would I get that money back? I am under the impression I have to be with the VA for 10 years before I would receive a monthly retirement. Am I right or wrong?

A. Wrong on all counts. First, you wouldn’t be vested until you had five years of service. Second, you could retire at age 62 with as few as five years of service.

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Military buyback

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Q. I served for 13 years and four months in the active-duty Air Force after graduating from a service academy. After taking a job in the airline industry, I continued serving in the Air Force Reserve for another 10 years. I turned 60 in March and started drawing reserve retirement pay in April. I am considering employment as a Federal Aviation Association air safety inspector when I retire from my airline job, perhaps this year.

I’ve been told by a friend at the FAA that all of my active-duty time plus my time at the service academy will count toward federal retirement if I buy back some military time. He was not sure how long I’d have to work for the FAA at a minimum to be “fully vested” for federal retirement, but he thought that it could be as few as three years (13 active + 4 service academy + 3 for a total of 20). Also, based on some of the Q&As here, it sounds as though I may have to stop my reserve retirement pay and perhaps pay back any that I’ve received to start federal employment.

Can you explain this and clear up any misunderstandings that I may have?

A. If you go to work for the federal government, you could make a deposit to the civilian retirement system and get credit for all of your military service academy and active-duty time. Because you are receiving reserve retired pay, you wouldn’t have to waive that pay when you retired from your civilian job.

For service before Jan. 1, 1999, the deposit equals 3 percent of your basic military pay (not allowances or differentials). For periods of service during 1999, the deposit is 3.24 percent. For periods of service in 2000, 3.4 percent. For any periods of service after 2000, it’s 3 percent.

To be vested in the civilian retirement system, you would have to have five years of actual civilian service. Once you had that, the active-duty service for which you made a deposit would be creditable for retirement. Your annuity would be calculated using the following formula: .011 x your highest three consecutive years of average basic pay x your years and full months of creditable service (actual and active-duty service for which you made a deposit). The first multiplier would be .011 instead of .01 because you’d be at least age 60 and have at least 20 years of service.

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Reservist anticipating federal job offer

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Q. I am a Navy reservist anticipating a civilian federal job offer soon.

1. How much will the active duty buy-in be for 16 years, 10 months of active duty, and where can I find a calculator?

2. What is the minimum number of civil service years I need to complete for a retirement? (I am age 52).

3. What is my minimum retirement age?

A. The first thing you need to do is complete OPM Form RI 20-97, Estimated Earnings During Military Service, and mail it to your military finance center with a copy of your DD 214, Report of Transfer and Discharge. You can download a copy at, click on Find Form(s).

Because your branch of service is Navy, send the form to DFAS-Cleveland Center, Attn: DFAS-CL/FLAGB, 1240 E. 9th Street, Cleveland, OH 44199-2005.

When you get that information back, you’ll have to do a little arithmetic.

For periods of active-duty service prior to Jan. 1, 1999, the deposit equals 3 percent of your basic military pay (not allowances or differentials). For periods of service during 1999, the deposit equals 3.25 percent. For periods of service performed during 2000, the deposit equals 3.40 percent. After Dec. 31, 2000, the deposit is once more 3 percent.

If you make a deposit, each year of active-duty service will increase your annuity by 1 percent, with additional months increasing that amount proportionally. No interest will be charged if you complete the deposit within two years. Note: If you wait until you are hired by the federal government, your agency payroll office can do the math for you.

To be vested in the retirement system, you need to have five actual full-time years of service. Based on your bought-back active-duty service, plus additional years of actual service, the earliest you could retire would be age 60. By then, you would have over 20 years of service.

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Military buyback

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Q. I have been offered an opportunity in FERS. I retired from the Navy Reserve in 2009 with 25 years of creditable service. I will not be drawing this pension until age 58 (credit for post-9/11 active-duty lowers from 60). How would making a deposit for military service work? Like active-duty retirees, would I then waive my reserve retirement? Would the decision simply be a calculation to see which retirement would yield the biggest pension? I retired as an O-5 and would be entering FERS at grade 13. I am 49 years old and would work until at least 62.

A. You would only be able to make a deposit for your years of active-duty service. If you completed five years of actual FERS service, you’d be vested in the system and could retire on an immediate, unreduced annuity with one of the following combinations of years and service: age 65 with five, 60 with 20, or at your minimum retirement age with 30. MRAs range between 55 and 57 depending on your year of birth. Your MRA would be 56. In addition, you could retire under the MRA+10 provision; however, your annuity would be reduced by 5 percent for every year you were under age 62. Regardless of which way you go, you would be able to receive both your civilian annuity and your reserve retired pay.

To figure out what your FERS annuity would be, use this formula: .01 x your highest three consecutive years of average pay x your years and full months of service (actual and active duty service for which you’ve made a deposit). If you retired at age 62 with at least 20 years of combined service, the multiplier would be increased to .011.

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Railroad buyback

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Q. In 1985-87, I worked for the railroad and I was paying into FERS. I left without being vested in the system. Now I have completed five years in FERS. Am I able to buy the railroad retirement time of two years and apply it to my FERS? I called the railroad retirement system and they said the federal money I contributed was sent to Social Security.

A. Unfortunately, no.

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Resuming creditable service

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Q. I have been working for the federal government for just over two years. I am planning on moving in the next few months. I have applied to federal jobs, as well as private-sector jobs and have, so far, heard back from the private-sector jobs. I read that the Thrift Savings Plan is vested at three years and that employees are entitled to retirement benefits after five years. If I were to leave the federal system at this point, would I be able to return to the system in the future and “restart,” as it were, at my two-year mark?

A. Reg: Yes, you could, if you didn’t take a refund of your contributions when you left. If you did take a refund, you’d have to re-deposit that money when you returned to get any credit for that time.

Mike: Your service credit for use in meeting the three-year TSP vesting requirement will pick up where it left off, but any automatic agency contributions that were forfeited when you separated will not be restored.

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Refund of retirement contributions

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Q. I started working for the government in 2008 and resigned for personal reasons this year. I was told by one representative at the Office of Personnel Management that because I vested more than three years, I am eligible for a refund of retirement I paid into FERS, as well as monies the government paid. I was then told by another rep that that is not true, that I can only get the money I invested into retirement. Can you please tell me which on is true?

A. You can only get a refund of your retirement contributions. No one ever receives a refund of the government’s contributions.

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Repay withdrawn funds and re-enroll in CSRS?

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Q. I worked for the Postal Service for two years and eight months, and left in the early 1970s to raise my child. At that time, I withdrew my contributions. When I returned to federal service (not the post office) in 1987, I was told I was not vested in CSRS and therefore had to be enrolled in FERS. I was credited with my post office service, so my service computation date is Dec. 7, 1984, rather than February 1987, when I was hired.

I would like to know if I should have been offered the opportunity to repay my withdrawn funds and re-enroll in CSRS. I believe this would be of benefit to me as I will be retiring within the next two to five years. What is your advice on this?

A. Because you didn’t have five years of service under CSRS, you were automatically placed in FERS. Making a re-deposit wouldn’t change that. You do, however, have a choice. You can either re-deposit the money you took out, plus accrued interest, and get credit for that time in your annuity computation or not make the re-deposit and have your annuity actuarially reduced based on how much you owe and your age at retirement.

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FERS eligibility

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Q. I am a retired officer, age 64, and have been a federal employee for two years. I paid a deposit for three years, 11 months credit for time attending a service academy. Am I eligible to retire now with five years, 11 months of service, or do I have to actually be a federal employee for five years and then add the academy time? Not planning on retiring now. Just want to know the facts.

A. You cannot retire until you are vested in the retirement system, which requires that you have five full years of actual FERS service.

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Approaching five years of service

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Q. I’m approaching five years of federal service, which means I will be vested in my FERS annuity. I have a job offer with a state government entity that would like me to start before I am vested.  Can I use annual leave to get me to the five- year mark for vesting purposes?  If not, what happens to the .8 percent, do I get it paid out?  Does making it to five years affect a future return to federal service?

A. Your unused annual leave can’t be added to your service time to make you eligible for a future annuity. You must have served a full five years for that to happen. If you do leave before being vested, you can either leave your retirement contributions in the retirement fund or request a refund of your contributions. If you do that and later return to work for the federal government, you could redeposit the money, plus accrued interest, and get credit for that period of service. Whether you are vested or not vested when you leave wouldn’t have any affect on your re-employment possibilities if you decided to return to work for the federal government.



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Q. I had 13 years of federal civil service with the National Guard. I never withdrew the money I had allotted in FERS. Am I vested? Also, will I get a retirement check at age 60?

A. Yes, you are vested. However, because you had at least five years of service but fewer than 20, you won’t be eligible for a deferred annuity until age 62.

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