Term
My client also seemed sure that he heard the "catch-62" one snapshot
at age 62 changed due to some new legislation? do you know anything
about this.. |
|
Definition
"CATCH 62" refers exclusively to CSRS/Offset employees, and provides a chance to escape payment for military service while still securing service credit.
There is no "CATCH 62" for FERS employees, but the client might be confusing that with the fact that taking SSA at age 62 results in a lifetime discounted benefit.
There has been no new legislation in either area, but it's likely that amendments to SSA are coming in the next few years, and they WILL reduce benefits and increase discounts. |
|
|
Term
Do Trans-FERS employees have to retire at FERS eligibility ages or can
they retire as their previous CSRS ages? |
|
Definition
TransFERS employee have to retire under the age/service schedule for FERS employees (meaning MRA) ... they can't use the better CSRS retirement rules.
Several other distinctions:
They also use FERS survivorship rules ... meaning higher cost than for CSRS, and fewer options.
Military service is bought under CSRS rules, IF the military service occurred before they joined the FERS workforce. Otherwise, it falls under FERS and is more expensive.
These two issues are a sore point for TransFERS, but it should have been explained when they made the switch to FERS. Usually -- NOT! |
|
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Term
IF SOMEONE GETS DISABILITY FROM THE PO
AND THEY ARE 57-60 ARE THEY
ELIGIBLE FOR THE SS BENEFIT PRIOR TO AGE 62 ALSO? |
|
Definition
If a Postal employee takes a FERS disability retirement, they are NOT eligible for the SRS, since FERS uses a completely different formula to calculate the retirement benefit.
"real" Social Security is payable before age 62 to those who are totally disabled, but the SSA payment offsets 100% against any other benefit the individual is entitled to. |
|
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Term
If an employee has 16 yrs in and retires at 60 with the reduced Fers
benefit,, is he then also entitled to the reduced ss benfit that he can
get prior to age 62? |
|
Definition
I'm assuming you are talking about the Special Retirement Supplement when you say "reduced ss benfit" above.
A FERS employee CAN'T retire at 60 with less than 20 years service, unless he/she goes out under disability, or under the "MRA+10" option.
If an employee retires under MRA+10, they will take a sharply reduced annuity, and NO ONE taking a reduced annuity will ever receive the SRS, now or later. It's completely lost even under a minor reduction.
I suggest the employee calculate the value of the reduced annuity, and the amount lost from the SRS, before they seriously consider leaving early. |
|
|
Term
Do Trans-FERS employees have to retire at FERS eligibility ages or can
they retire as their previous CSRS ages? |
|
Definition
TransFERS employee have to retire under the age/service schedule for FERS employees (meaning MRA) ... they can't use the better CSRS retirement rules.
Several other distinctions:
They also use FERS survivorship rules ... meaning higher cost than for CSRS, and fewer options.
Military service is bought under CSRS rules, IF the military service occurred before they joined the FERS workforce. Otherwise, it falls under FERS and is more expensive.
These two issues are a sore point for TransFERS, but it should have been explained when they made the switch to FERS. Usually -- NOT! |
|
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Term
He also said that in like 1989 the Government changed payroll systems
and that they told him to hang on to his last paystub from the old
system. He's wondering if he still needs to hang on to this old
paystub? |
|
Definition
No ... OPM keeps the official running total of the retirement contributions for each employee, government-wide. (Navy's totals are not reliable.)
OPM's total is reliable and is the only one that counts. It doesn't matter what his pay stubs might say, and so are useless.
(The retirement contribution total is practically meaningless anyway ... the numbers only apply in taxation anyway.) |
|
|
Term
He is CSRS and has 15 quarters towards SSI and his wife has 26
quarters (not civil service). He said that he heard that he can
rollover his quarters into his wifes account.. is this true? |
|
Definition
No ... SSA credits/quarters cannot be transferred to another individual's accounts.
One person can draw benefits from another person's account, but each person must qualify on their own work |
|
|
Term
My client is buying back military time and he's 61 1/2 now and retiring
at 63. He won't have it paid back by 62 does this affect his "snapshot"
in anyway? |
|
Definition
I'm not sure what you mean by "snapshot". Were you referring to the Special Retirement Supplement?
If so, he will not be eligible for the SRS since he will be older than 62 when he retires.
If he is instead in the Offset program, there is no "offset" reduction until retirement. and the reduction ignores any military buyback time. |
|
|
Term
| What is the best time for FERS and CSRS employees to retire and why? |
|
Definition
Question 1: This produces the largest buy-back of annual leave, and throws the tax payment on that leave to the next year.
For CSRS, the best day to retire is ordinarily the 3rd, 2nd, or 1st day of the month, and the best month is January. This year, however, the best day would actually be 12/31/2010.
For next year (2011) it will be the same. |
|
|
Term
I have a client who is CSRS who wants to retire 6/2011 and has 10+
months of sick time. He wants to know if it's a benefit to wait till
1/2012 to retire or should he just retire when he wants to and get
the 10 months of sick time credit?
(Client remembered something mentioned about a 2% or some change happening in 2012) |
|
Definition
| In this instance, it would simply be personal preference. There is no special benefit available in 2010 or 2011 |
|
|
Term
Working with federal employee (fers). He works with fire department.
On his leave and earnings statement his adjusted basic pay inc locality
$51,051. Based on his fegli codes my report shows him making over
$69,000 a year. I called him back for clarification. Each pay periodbased on three days at 24 hour shifts totals 144 hours. My client
states of the 144 hours 38 of those hours are computed as overtime. You
know the drill high threes plus service time. What income do we use tofigure his retirement, it will make quite a difference? $51,051 or
actual income earned $69,000 which includes his overtime.
Firefighters, law enforcement officers, and air traffic controllers
receive TWO (2) types of overtime: that which is regularly scheduled
(administratively uncontrollable overtime), and ad hoc (ordered on the
spot for unscheduled periods). |
|
Definition
The AUO overtime DOES count as part of their H3 credit; the ad hoc OT
does not. |
|
|
Term
When a employee retires do they continue to pay the same amount of
money (barring rate increases) for their health insurance or do they
not get anymore gov't matching contributions? |
|
Definition
Employees and retirees pay the same FEHB premiums forever.
Same for survivors, if entitled to a pension. |
|
|
Term
My client has about 80 quarters into SSI and is under CSRS.. He wants
to know about how much if any will his SSI be reduced when he retires.
He is 62 years old now and is going to work until 65. |
|
Definition
I think he must have meant SSA, not SSI.
The latter is national welfare, and if he has a pension coming he won't be eligible for SSI.
Judging by his age, he fits into the 1943-1954 group. If he applies for SSA at age 62, his benefit will be permanently cut to 75% of what he worked for.
If he waits until age 66 (his full retirement age), he will be entitled to the full (100%) benefit. For each month younger than 66, if he applies, he will lose 0.52% of the benefit, culminating in the 75% shown above at 62.
If he works while drawing SSA, and his earned income exceeds $14,160 in the year, his SSA benefit will be reduced by $1.00 for every dollar his income exceeds that figure.
It's quite complicated, but the above is how it works. |
|
|
Term
Fers employee resigns at age 56 with 12 years 10
months of service time, full pension per report $484 per month. By
resigning and deferring receipt of any pension until attained age 62 was
told her pension would be influenced significantly? Is this true and by
how much? |
|
Definition
Her pension at age 62 would be EXACTLY the same as it was quoted today, with no increase due to inflation between now and then. The pension would NOT be refigured at age 62 to take into account what her old job would be paying then.
Other than that, there is no financial penalty.
Note, however, that she will lose FEHB enrollment at resignation, and will NOT be entitled to it when the pension starts later. |
|
|
Term
Can she keep her FEGLI, she has neither a pay check (resigned) or a
pension (deferred). If yes how does she pay for it? |
|
Definition
She can't continue FEGLI without an annuity, but she can ask FEGLI to convert her to a PRIVATE insurance policy (no physical required, but rates aren't guaranteed).
FEGLI can refuse without comment, though. |
|
|
Term
fers employee at age 56 retires with 12 years 10 months service time if
she has five years of continuous fehb is she eligible to continue her
health insurance into retirement. Even if she is taking the MRA +10
reduced pension? |
|
Definition
Yes, she would be entitled to continue FEHB because she has an immediate pension and has had FEHB continuously.
The right to have FEHB doesn't depend on the amount of the pension, but the fact that it starts right away.
If the need for FEHB is not critical, she might want to DEFER her pension instead, and pick it up at age 62 as 100% (no age penalty). She would be able to restart FEHB at 62. |
|
|
Term
He is CSRS and has 15 quarters towards SSI and his wife has 26
quarters (not civil service). He said that he heard that he can
rollover his quarters into his wifes account.. is this true? |
|
Definition
No ... SSA credits/quarters cannot be transferred to another individual's accounts.
One person can draw benefits from another person's account, but each person must qualify on their own work. |
|
|
Term
He also said that in like 1989 the Government changed payroll systems
and that they told him to hang on to his last paystub from the old
system. He's wondering if he still needs to hang on to this old
paystub? |
|
Definition
No ... OPM keeps the official running total of the retirement contributions for each employee, government-wide. (Navy's totals are not reliable.)
OPM's total is reliable and is the only one that counts. It doesn't matter what his pay stubs might say, and so are useless.
(The retirement contribution total is practically meaningless anyway ... the numbers only apply in taxation anyway.) |
|
|
Term
My client is buying back military time and he's 61 1/2 now and retiring
at 63. He won't have it paid back by 62 does this affect his "snapshot"
in anyway? |
|
Definition
I'm not sure what you mean by "snapshot". Were you referring to the Special Retirement Supplement?
If so, he will not be eligible for the SRS since he will be older than 62 when he retires.
If he is instead in the Offset program, there is no "offset" reduction until retirement. and the reduction ignores any military buyback time. |
|
|
Term
Working with federal employee (fers). He works with fire department.
On his leave and earnings statement his adjusted basic pay inc locality
$51,051. Based on his fegli codes my report shows him making over
$69,000 a year. I called him back for clarification. Each pay period
based on three days at 24 hour shifts totals 144 hours. My client
states of the 144 hours 38 of those hours are computed as overtime. You
know the drill high threes plus service time. What income do we use to
figure his retirement, it will make quite a difference? $51,051 or
actual income earned $69,000 which includes his overtime. |
|
Definition
Firefighters, law enforcement officers, and air traffic controllers
receive TWO (2) types of overtime: that which is regularly scheduled
(administratively uncontrollable overtime), and ad hoc (ordered on the
spot for unscheduled periods).
The AUO overtime DOES count as part of their H3 credit; the ad hoc OT
does not. |
|
|
Term
When a employee retires do they continue to pay the same amount of
money (barring rate increases) for their health insurance or do they
not get anymore gov't matching contributions? |
|
Definition
Employees and retirees pay the same FEHB premiums forever.
Same for survivors, if entitled to a pension. |
|
|
Term
My client has about 80 quarters into SSI and is under CSRS.. He wants
to know about how much if any will his SSI be reduced when he retires.
He is 62 years old now and is going to work until 65. |
|
Definition
I think he must meant SSA, not SSI.
The latter is national welfare, and if he has a pension coming he won't be eligible for SSI.
Judging by his age, he fits into the 1943-1954 group. If he applies for SSA at age 62, his benefit will be permanently cut to 75% of what he worked for.
If he waits until age 66 (his full retirement age), he will be entitled to the full (100%) benefit. For each month younger than 66, if he applies, he will lose 0.52% of the benefit, culminating in the 75% shown above at 62.
If he works while drawing SSA, and his earned income exceeds $14,160 in the year, his SSA benefit will be reduced by $1.00 for every dollar his income exceeds that figure.
It's quite complicated, but the above is how it works. |
|
|
Term
Fers employee resigns at age 56 with 12 years 10
months of service time, full pension per report $484 per month. By
resigning and deferring receipt of any pension until attained age 62 was
told her pension would be influenced significantly? Is this true and by
how much? |
|
Definition
Her pension at age 62 would be EXACTLY the same as it was quoted today, with no increase due to inflation between now and then. The pension would NOT be refigured at age 62 to take into account what her old job would be paying then.
Other than that, there is no financial penalty.
Note, however, that she will lose FEHB enrollment at resignation, and will NOT be entitled to it when the pension starts later. |
|
|
Term
Can she keep her FEGLI, she has neither a pay check (resigned) or a
pension (deferred). If yes how does she pay for it? |
|
Definition
| She can't continue FEGLI without an annuity, but she can ask FEGLI to convert her to a PRIVATE insurance policy (no physical required, but rates aren't guaranteed). FEGLI can refuse without comment. |
|
|
Term
He has been paying for 1 X C since 1980; however he was divorced
in 1984 and never remarried. He learned that his x wife died in
the past 6 months. Does he have a claim? |
|
Definition
OPTION C coverage for the ex-wife actually ended on the date of the divorce.
A former spouse can NOT be covered by this insurance.
Therefore, he can make no claim for the death of his ex-wife. |
|
|
Term
Same person has a son that is 41 years old, if he doesn’t have a
claim for his x wife then he has been paying for 1x c
unnecessarily for approximately 19 years because of the age limit
on children. Does he have a claim on premium he’s paid all the years? |
|
Definition
Yes. He should request a refund of the OPTION C premiums from his servicing personnel office. The refund could apply back to the later of: the day of the divorce, or the date the child turned age 22.
(I'm not sure how far back the refund can cover, as I've never had a case that old. I've never even HEARD of a case that old. That being said, I don't know of any limit.) |
|
|
Term
Is it true that my excess sick leave will add to my pension, even
though I would have already been maxed out at 41y11m? (80%).
Yes. Sick leave is the ONLY way to produce a CSRS pension exceeding the 80% limit.
Then there is the rumor that each $100 adds $7 to you monthly pension
amount |
|
Definition
Not correct in terms of CSRS.
The employee is probably thinking of the Voluntary Contributions program annuity, which can be bought. For each $100 multiple deposited into the fund, a lifetime annuity of $7.00 a year is paid out |
|
|
Term
CSRS, if the employee has over a years worth of sick leave, would it be
better to cash out the sick or use for the pension, and how would you
determine the monthly benefit if you added it to the 80%. |
|
Definition
Any amount of sick leave would return a better benefit if USED UP rather than TURNED IN for additional annuity credit (the default).
An employee is not permitted to go on extended sick leave unless illness or treatment is documented.
Sick leave is credited into retirement as hour-by-hour credit, as if it had been worked.
I..e., 2087 hours of S/L would equate to 1 year of additional annuity credit. |
|
|
Term
If a federal employee has health insurance before retirement with their
spouse also receiving benefits. What are the requirements for the spouse
to maintain health insurance upon separation? |
|
Definition
I'm assuming that BOTH are federal retirees, with pensions?
Or are you saying that they both are enjoying HEALTH insurance, but one is non-fed?
NON-FED COUPLE:
1. A non-federal spouse can be on your health plan as long as (1.) they are married to you, and (2.) you remain alive.
2. When you die, your non-federal spouse can stay in the FEHB so long as he/she (1.) has a survivor annuity from you, and (2.) was covered on your plan as self-and-family at the time of your death.
FED COUPLE:
If there are TWO federal employees involved, then EACH has their OWN lifetime right to FEHB so long as each: (1.) has a federal annuity starting at retirement, and (2.) has had FEHB coverage for the past five (5) unbroken years leading up to retirement.
The latter rule is satisfied by ANY coverage by FEHB (self only, self and family, primary holder, secondary holder, different FEHB plans, etc.). It's even met by CHAMPVA or TRICARE. |
|
|
Term
I have a civil service married couple. She is a FERS with 17 years left
till retirement and he is a CSRS retiring next year. She currently pays
the health insurance for both, he isn't paying for health ins. They DO
NOT want to do the SSB, so can they both go to singles on their health
insurance and even though he hasn't paid for it in the last 5 years
still get it after retirement (next year)? |
|
Definition
Each can have their own FEHB enrollments now (it's open season) or later (e.g., retirement).
It doesn't matter who holds the insurance, but it's best for the one still working to be the primary enrollee, as they can pay for it pre-tax.
He does have the five year requirement met. It doesn't matter if you are the primary or secondary, self only or self and family -- all the time you are covered by FEHB in any regard counts toward the five-year rule. |
|
|
Term
My client had some questions about the Voluntary Contributions program
that I didn't see in the employee almanac..
when he retires, can he wait to get the additional pension for a
later date (after retirement) or does it only start when he retires? |
|
Definition
All decisions must be made within thirty (30) calendar days of separation to retirement, or resignation.
If you don't make a decision within that time, OPM automatically starts a lifetime annuity for you. No change is permitted after the first check is issued. |
|
|
Term
| Can an employee take funds from his TSP to put into the VC program? |
|
Definition
| Yes, if he is 59-1/2 or older. He can make a one-time (per life) withdrawal in any amount. That will require him to pay taxes on all funds, though. Could be an expensive way to invest in the VC, could be counter-productive, and ought to be fully thought out before you act. |
|
|
Term
| Can an employee he make a lump sum payment anytime into the VC before retirement? |
|
Definition
Yes ... the entire amount could be deposited the day before retirement.
Whatever is in the account at retirement can be converted to the annuity, even if was there only one second.. |
|
|
Term
I have an employee prior military is currenlty collecting with 20 yrs
military, he now is retiring with fers,, at 60 with 18 yrs, ? can a fers
emplyee always by back any time in the POst service? he worked there for 4
years before and took the $.
Also how does he apply for the Special Retirement Supplement? |
|
Definition
If he is in FERS, and has less than 20 years, he will be taking the MRA+10 option. Is he aware of the Sharp age reduction, and the loss of the SRS payment?
He can buy back postal service time the same way you buy any federal service, and he deals with his current agency to do this.
Some Postal service is not purchase, primary that being rural contract carriers. Rest is OK.
There is no application for the SRS. If entitled to it, you receive it automatically. If not entitled, you won't get it, ever. |
|
|
Term
I have a postal employee that has active duty time and reserve time.
If he is in reserve status and deployed will time spent deployed count
as active duty and be time he can buyback and use toward postal retirement? |
|
Definition
Active duty service in the Reserves can be bought and credited SO LONG AS it does not overlap creditable civilian service.
You can't credit any Reserve time that occurred **during** a period of federal civilian employment (e.g., working while doing weekend drills, etc.). Civilian employment takes up all possible credit during that period.
If an employee was in the Reserves BEFORE becoming a federal civilian, that time can be bought and credited. Same with Reserves time AFTER ending federal employment. |
|
|
Term
A dept of defense employee was injured on the job but has gone back to
work 5 hours per day. She states that while her adj pay with locality is
$50k 30% of that is actually classified as “workers compensation” due to
her injury. She further states that this arrange is likely to be
permanent. She wants me to project her retirement annuity for her.
I assume that she will get full credit for her time towards her
retirement annuity but will her high 3 be based on total comp including
the workers comp element? |
|
Definition
An employee injured on the job is entitled to maintain their pay level.
This means that even though she is in a lesser position, she gets the pay of that position plus enough extra to make her combined income what it was before the injury.
Same with retirement -- she is entitled to the retirement she would have had but for the injury. So the high three will be based on the original rate of pay. |
|
|
Term
I have a client who was hired 6/83 with the first year being temp
time.. after 9 years they switched her from CSRS to FERS because they
said that they made a mistake.. How does she calculate (or me) her
pension in this situation? |
|
Definition
Your retirement coverage depends on you being a PERMANENT employee, not a TEMPORARY.
If she was temporary when FERS was introduced, she has to be in FERS forever. The fact they put her in CSRS for a while means nothing.
All of the time she spent in the CSRS should have been converted automatically into FERS time, and OPM would straighten out SSA payments, etc.
She is FERS for all retirement rules (eligibility, computation, etc.) |
|
|
Term
When getting the lump sum for your annual leave is the maximun hours you
can get 240hrs? anything beyond this, you lose? |
|
Definition
All federal employees are entitled to carry a maximum (240) number of hours of annual leave over from year to year, and when they separate they are entitled to whatever total they have on that day.
If you carried 240 hours into a year, and worked for ten more payperiods, then you would be paid 240 hours plus 80 more (10 X 8 hours per payperiod).
WHATEVER you carried in PLUS the number of hours earned the last year is what you will be paid.
Employees who have worked overseas have a personal leave ceiling of up to 360 hours. It's possible that they could be paid for all that plus the earnings to date. |
|
|
Term
Federal Employee's spouse will soon be eligible for medicare. She would
like to know how tri-care and medicare co-exist. She just needs a basic
understanding how it works. |
|
Definition
Once she turns 65, TRICARE automatically becomes TRICARE FOR LIFE, and is free. When this happens, she will be required to enroll in Medicare A & B (if not already) and prove this to the TRICARE organization.
From that point on Medicare serves as her primary healthcare system, and TRICARE FOR LIFE is secondary.
She only pays for Medicare; TRICARE FOR LIFE is free. |
|
|
Term
I have a Postal employee who is age 52 and has 30 yrs of service and 4
years of military time that he has not bought back. He plans to work to
age 55.
He has 16 quarters of work prior to USPS service. He was concerned about
what he called "catch 62" and how it would affect the buy back of his
military time and social security. |
|
Definition
A CSRS employee with active duty military service who became a permanent federal employee prior to 10/01/1982 is called a "Catch 62" veteran.
At retirement time, he/she is entitled to free credit for their military service whether they pay the deposit or not.
When they turn age 62, a check of their eligibility for SSA is made. if they are eligible (have 40 credits or quarters), and if they have not paid for their military time, the military credit is disallowed and the pension is reduced sharply.
If the prospective employee is about to retire, and already has 40 or more credits, then they should pay for their military time to avoid that later loss.
If the employee doesn't have 40 credits, but is close (i.e., 25-25 credits) they probably ought to buy their service just in case they have the need to work later.
If the employee has so few SSA credits at retirement that they can't earn up to 40 by age 62, then there is no point to buying their military service back, as they will have free credit anyway, with no possibility of harm.
It's confusing, but that's the easiest way to explain it. |
|
|
Term
I have a client whose a firefighter and he wants to retire at age 48
with 25 years of service (all as a firefighter). He seems to think that
he won't get the FERS suppliment if he reitires at 48 since he's not 50
y/o. Is this true? |
|
Definition
Actually, it's better than he thinks.
Special Category (fire fighters and law enforcement) employees can retire immediately with 25 years or more PRIMARY or SECONDARY 6C service, at any age.
They are IMMEDIATELY eligible to receive the Special Retirement Supplement, at any age, and they are NOT subject to the earnings test until they reach their minimum retirement age (MRA).
At MRA, they become subject to the earnings test and remain so until they leave the supplement at age 62.
What this means is that they can have their cake and eat it too!
Non-Special Category can't get the SRS until they reach their MRA, and are under the earnings test the entire time.
So, a firefighter can work at any time and escape the losses to the earnings test UNTIL they reach their MRA later. |
|
|
Term
Firefighter wants to retire at age 52.. He seems to thinks there's a
10% penalty if he withdrawals any money from his TSP before age 59
1/2. I read in the almanac that their able to withdrawal at time of
seperation of service (retired) even if it's before 59 1/2.. He seems
to think you said at the seminar that you can't do this? |
|
Definition
There is no exemption from the 10% early withdrawal penalty for firefighters. If he leaves employment before age 55, he will be liable for the EWP through 59-1/2.
Any federal employee who retires or separates from service has the right to make withdrawals from their TSP immediately, at any age. |
|
|
Term
My client wants to retire at the end of this year, but he's interested
in a 'special program' where he said that he can work an extra year and
still get his pension while he's working? He wanted some more info on
this program... thanks |
|
Definition
Navy has authority to declare any position to be "mission critical". If done, the individual can take the position and draw full salary WITHOUT interrupting their FERS or CSRS pension.
Only management can make this determination. Determinations are good for one year (12 months) at a time. |
|
|
Term
My client who's a transfer, wants to retire at age 56. He seems to
think that the post retirement colas on his pension that normally don't
kick in until age 63, kick in before this only on the CSRS portion of
his pension? Is this true? |
|
Definition
If this individual is a true TransFERS, they have both a FERS and a CSRS component in their retirement.
The FERS component will receive Consumer Price Index (CPI) adjustments only once the retiree reaches age 62, and these will remain subject to only partial increases unless the CPI is below 2.0%.
The CSRS component is entitled to full CPI increases immediately upon retirement for life.
The increases are added to each component, and then the two components are combined into a single monthly payment. |
|
|
Term
Can the employee from the question below, roll the TSP out to an IRA at
52 w/ no EWP? Maybe I'm confussed on the answer below. You are
saying that since he's a firefighter he will have EWP if he reitres
before 55 up until 59 1/2. While all other federal employees won't
have a EMP no matter when they retire? |
|
Definition
Employees leaving government service before they turn 55 face the EWP on 401K withdrawals all the way to age 59-1/2. Firefighter or not.
Employees leaving service at age 55 or older are exempt from the EWP on 401K withdrawals.
Note that IRA withdrawals allow no exemption -- the above is only for 401Ks. |
|
|
Term
Working with a FERS employee. In the past he and his wife both had health
insurance through her employer (private sector) . Currently they both have
insurance that he is paying for through payroll deduction from his leave and
earnings statement. He is aware he must have coverage for five years prior
to retirement. His question if he were to become disabled whether off or on
the job and cannot work anymore and has not met the five years requirement
would he and his wife loose their insurance or would the government assume
they would have continued the health insurance for the five years and the
insurance would continue into their retiement years? In June he will have
31 years of service time. |
|
Definition
| If someone retires on disability rules, the five-year rule for FEHB is waived. Any length of time in the system is enough. |
|
|
Term
I am currently working with a Postal Employee. She is completing her
retirement paperwork and wants to retire in May. She is CSRS.
She currently has Family status for her FEHB and wants to change the status
to single coverage for herself only. Does she have to wait for open season
after she is retired or can she make the change now on her retirement
paperwork ? |
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Definition
| The act of retirement is a "qualifying event" that gives her an open season now. Tell her to contact her personnel office to make the change. |
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Term
Client paid back some military time and realized after your seminar that
he didn't have to since he's not SSI eligible. Can he can this money
back? If so, with interest? |
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Definition
No refund can be made, UNLESS he quits government service before retiring, takes a complete refund (including that paid for military), re-joins the federal government, and then retires later.
On the SECOND go-around, he would refuse to pay the military time.
Obviously, he's not going to do the above. |
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Term
He also served 15 days/year in active duty training from the Navy that
shows on his DD214 and wants to know if he can get credit for this? |
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Definition
SURE! He can elect to pay for any active duty uniformed service, and it's always worth paying for.
If he has active duty for TRAINING, he can buy that back too, provided it wasn't served while on military leave from his civilian federal job. If so, it's already credited. |
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Term
If an employee is getting married and is retiring within 5 years, can he
put his spouse on the FEHB to carry over into retirement? |
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Definition
| Sure ... as long he is entitled to have FEHB coverage, he can put a newly-acquired spouse on his health insurance now or in retirement. |
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Term
FERS employee who is 61 and 11 months old just got diagnosed with a
disease and wanted to know her disability options. She can retire in
one month with her regular pension, but wanted to know if she has time
to apply for a disability pension. What is the better course of action
for her? |
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Definition
She can apply for disability retirement, but all FERS disability retirements are converted into regular FERS retirements upon reaching age 62.
Therefore there would be no benefit in applying for disability retirement at this point.
Best course: apply for a regular FERS retirement. |
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Term
What is the minimum age a employee has to work, age to get the Soc, Sec.
Supplement, what do they have to do? |
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Definition
The SRS Is payable beginning at the minimum retirement age.
If an employee retires before that date, they won't get the SRS until they reach the MRA later. |
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Term
According to the documentation we have, a CSRS employee that does not
make a deposit for non-deduction service (ie service before Oct 1, 1982)
will have his annuity reduced by 10% of the amount, plus interest.
Does this reduction of his annuity continue for life or is it until the non-deduction time is paid for? |
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Definition
If the employee had non-deduction (temporary) service PRIOR to 10/01/1982,
the 10% penalty applies.
The question is more about the penalty. How long is the 10% penalty held
from their pension?
Forever. |
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Term
| What are the limitations for a spouse to move monies when an IRA is involved and the spouse dies? |
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Definition
There are some special inherited IRA rules that vary depending on whether the deceased was subject to the RMD at the time of death.
If the deceased husband was under age 70 1/2: the surviving spouse can inherit the IRA as her own meaning she can roll it over to new IRA (within 60 days of receipt ) with her as IRA owner or change the name of the owner of the existing IRA to her. In either way she has decided to "treat it as her own IRA" and the RMD rules won't apply until she turns 70 1/2.
If the deceased was in RMD, she can elect to receive the RMD with her as beneficiary. The surviving spouse then continues to receive the required distributions but over her life expectancy as beneficiary. This allows her to avoid the 5 year rule that would force full liquidation of the IRA within five years after the deceased IRA owner's death. |
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Term
If an employee doesn't take survivor benefits into retirement, can the children
continue health coverage after the employee dies? |
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Definition
| Children can remain on the fathers FEHB as long as the father keeps them on his health plan, and they are otherwise eligible (age, dependence). |
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Term
| Can a retired employee continue health on the children even if the spouse is not on the family plan? |
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Definition
A federal employee or retiree can put uis children on FEHB if he himself has FEHB, and the children meet eligibility rules (under age 26, etc.).
FEHB enrollment as self/family automatically includes any spouse.
As long as the employee/retiree is alive, this can continue even if no survivors was chosen.
When the employ/retiree dies, the children can remain in FEHB since they have an automatic survivorship. The spouse, though, is removed unless he/she has survivorship. |
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Term
Regarding employees sick time, how does the use it or lose it thing
work? I thought CSRS employees get 100% of their time added on towards
their pension and currently FERS get 50% (till 2014). |
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Definition
There is no "Use it or lose it" in referring to SICK LEAVE hours. An employee can have as much sick leave stored up as they can earn, and it's never forfeited.
ANNUAL LEAVE is subject to "Use it or lose it" rules. Under this provision, if you have more than 240 hours of annual leave, your total will be cut back to 240 hours on the last day of pay period 26 (the last payroll period of the year). To make sure you don't lose leave, you must use it before then. |
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Term
Client is retired on disability and is making about $1500 month. Is there
a way to estimate what her pension will be when she turns 62? 11 yr FERS
from 87-98. Does the years she's been on disability count towards her
regular pension? |
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Definition
At 62, she will automatically converted to a FERS non-disability pension, with the years on disability added in as if she worked them.
The ordinary FERS formula applies. |
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Term
Client is NAF and wants to know if this includes benefits and if the
time counts towards her pension? |
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Definition
JAGUAR work *sometimes* can be credited toward federal retirement.
It's complicated - best to have her consult with her personnel office so that they can review her personnel record for eligibility. |
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Term
On January 6, 2013 will have five consecutive years of fehb and wanted
to retire then instead of Febuary 1, 2013 but will be three days short
of the five years would like to know any chance of those three days can
be waived? How long would spouse need to be on fehb prior to his
retirement to be eligible for health insurance? |
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Definition
If the above is correct, and the employee has the five continuous years of enrollment on January 6th, what "three days short" are you talking about?
OPM will never waive the five-year for mere convenience of the employee. The basis of waiver is that the employee's plans changed by external events, and that it would be against good conscience and equity not to permit retention.
Retirement on January 6th would not be advised, as the employee would not be eligible for any retirement payment for the month of January. That could be expensive. The date should be moved to the end of January, or back it up to December 31st. |
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Term
If Fed gets divorced can spouse still keep the federal health ins. and
if so can she still keep if she gets remarried? |
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Definition
A divorced spouse can't remain in FEHB under the original account since they are no longer an "immediate family member."
A divorced spouse MIGHT have conversion rights to a private policy under COBRA rights, but conditions apply, and there is no subsidy. |
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Term
What happens if a fed employee has negative sick time?
Also if sick time is negative when he retires? |
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Definition
If the individual owes us (government) for advanced sick leave, it's usually forgiven if the individual will request a waiver of repayment. Usually one or two lines of "money is tight, I'm still sick" is enough.
If the agency refuses to waive, the individual has to pay it back by offset from their annual leave payoff.
If they don't have any annual to pay off, they will have to write a check.
I never saw a waiver denied. Apply to the local personnel office. |
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Term
Is it cheaper while working if married Fed. couple carry seperate health
ins vs. together and same question when they retire. |
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Definition
ALMOST always. Of the 238 plans in effect this year, ONE of those was cheaper for self and family than two single-only enrollments.
It's always best to check the FEHB booklet for the plan you are in, and simply add two singles, and then compare to the SELF+FAMILY pricing. |
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Term
My client got his estimate back for his retirement and noticed there's a
$61/month deduction coming out which says "unpaid CSRS Deposit". He has
had continuous service since 1971. He did have 1 year of temp time that
he never paid back, and can't think of any other reason for it. They
are telling him that he cannot pay this back. Any idea on what this
possibly could be? |
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Definition
It sounds like a charge for not paying for temporary time.
If he is in the CSRS system then there is no reason why he can't pay this back -- this is his right. The staff is giving out bad information.
If he is in the FERS system, he wouldn't be allowed to pay back temporary service if it was worked in 1989 or later. |
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Term
Regarding the FEHB... 2 federal employees both retiring within 5 years,
one is on the others family plan because they have an 18 year old kid on
it also. When the last person retires the kid will be 23 years old so
she wants to keep the family plan so the kid will be covered until 25.
Does she have to take a Survivors election when she retires to do a
family plan on the FEHB? I'm assuming not, and then when the kid is 25
and falls off the FEHB, they can then switch it to individual plans,
since it would be probably cheaper, correct? |
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Definition
Dependent children are allowed to stay on FEHB through their 26th birthday.
Any federal employee retired or not, can elect self-and-family coverage now or in retirement. They don't need a survivor election to keep kids on their plan.
A federal couple (both feds) can elect to move from self-and-family to self-only before or after retirement. Each person has their own right to FEHB during retirement, and needs no survivorship from the other employee for this.
Children have their own, free survivor election anyway, and can remain on FEHB without anyone else involved through 26.
What you outline is typical ... feds keeping a S&F enrollment to bridge the last child to adulthood, then switching to singles. Purpose is to save money. |
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Term
To clarify, what you would recommend on a date to retire when somebody
has 29 days of sick leave on 12/31/11. Should they work to 1/31/12 to
get that extra month? Or is it more beneifical tax wise to still go out
12/31/11 and use these 29 days before then? |
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Definition
If someone will lose 29 days of credit, there isn't a lot they can do to improve the situation.
They could stay to the end of January, but that would replicate the 29 days in the NEXT month calculation. The problem simply recurs, plus they would have lost their annual leave accrual down to 240 hours.
Clearly, the only solution is to keep the same 12/31/11 retirement date, and try to use up the excess sick leave.
Note that the 29 days left over is NOT equal to 29 days of work time. Instead, it is equal to only 168 hours of sick leave time. Make sure they don't use more than that, or they will consume ANOTHER month.
And it would be best to leave 2-4 days of sick leave on the books, just in case an audit would subtract a few hours.
There would be no difference in tax treatment of the payment between leaving 12/31/11 or 01/31/12. |
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Term
If somebody owes money for their retirement buyback (is Offset and took out
his retirement when he left the first time) and owes about 40K when he
retires, will they take out the money out of his retirement check until it's
paid off? Or does it have to be paid off before he retires? |
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Definition
The latter. ALL deposits (military, temporary service, refunded service) must be repaid BEFORE leaving federal service.
Refunds made before 10/01/1990 are usually NOT repaid, as the service is not lost, and the penalty is minor. I assume this individual is talking about service on and AFTER
that date. |
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Term
A 62 year old CSRS employee was eligible to retire but was still working when he had a stroke. He is currently in a coma and the prognosis is that he will not recover. His son has been named conservator by the courts and wants to retire him with survivor benefit for the employee’s x-wife (his mom).
The question is if he takes a medical retirement at this time rather than a regular retirement is there any tax advantage? |
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Definition
There is no tax advantage, and if he had more than 22 years of CSRS service, there is no payment advantage either.
The conservator has nearly nothing to do with matter. The surviving wife files the application to receive the benefit.
If/when he dies, she should call OPM @ 1-88USOPMRET to start the process.
If he dies before he retires, his wife would automatically get the maximum survivor benefit anyway, without any action on his part.
If he retires and turn dies, same situation.
It's best to wait, as every day as an employee increases the amount slightly, even though its a minor amount. |
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Term
Somebody is retiring and accrued 10 months and 23 days of sick leave.
The 23 sick days are discarded correct? So if the employee wants to
retire on 12/31/11 with this scenario, should he wait an extra couple of
months to retire to get the full month added on or should he use these
23 sick days? |
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Definition
While it is true that we only take full years and full months of service into calculating a pension, and drop any partial month of days, that "drop" is not done until we add any fractional days of actual service and fractional days of sick leave together.
Any fractional month surviving after that is discarded. An employee could (if approved) use up whatever sick leave days are left over, but it's always better to leave a few days as a buffer against any counting errors that are discovered later.
And remember: days left over are CALENDAR days, not workdays. The number of sick leave hours in a calendar day is approximately 6, so don't overuse that fraction. |
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Term
Regarding the FEHB.. 2 federal employees both retiring within 5 years,
one is on the others family plan because they have an 18 year old kid on
it also. When the last person retires the kid will be 23 years old so
she wants to keep the family plan so the kid will be covered until 25.
Does she have to take a Surviovors election when she retires to do a
family plan on the FEHB? I'm assuming not, and then when the kid is 25
and falls off the FEHB, they can then switch it to individal plans,
since it would be probably cheaper, correct? |
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Definition
Correct. The federal employee who is eligible to have FEHB when he/she retires, has that right forever. No survivorship benefit is required, ever.
A nonfederal spouse can never have FEHB on their own, unless they are on a survivorship benefit. Therefore, survivorship benefits are only necessary for non-federal spouses.
Any employee or retiree (as above) currently on self and family enrollment can switch to self only enrollment in any subsequent open season.
To federal employees could even rejoin self and family in the future, if it made sense. |
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Term
If you have 11 years reserve and 9 years military time. An employee
hired in 2004 as federal employee,if you include the military time in
your Reserve pension calculation, can you buy it back for civilian
pension also? |
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Definition
Yes ... you can sell us the active duty uniformed service AND the reserve time (in two separate transactions), even if the reserve time is used in a reserve pension.
You CAN'T sell reserve time that overlaps federal civilian time, though. Only that portion that occurs before you started federal civilian service is credited. |
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Term
a) I understand that if you die in retirement after starting the Voluntary Contribution annuity and before receiving payments equal to your contributions and interest your beneficiary will receive the balance.
b) The question is: if you elect the 50% SSB for the VC annuity and die and then your SSB recipient dies and the total paid to you both is less than your contributions plus interest does someone else get the balance or is it forfeited? |
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Definition
a) Correct
b) If both parties pass, and the total paid out by then is less than the balance of the VC account at time of retirement, then any remaining capital in the account is paid out to a beneficiary.
Remaining capital in the VC account is NEVER lost, under any circumstances.
The survivorship rule referred to above simply prevents naming a successor beneficiary in case the secondary beneficiary passes away first. If you lose your choice of successor before you go, you can't name a replacement.
The reduction taken to provide the benefit to that secondary can't be waived, either, although no other payee can receive anything. The original owner still owns the CAPITAL, always, and will receive over over life in the monthly payments.
If he/she dies too soon, the remainder flows to the beneficiary (named or default). |
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Term
a) A CSRS retires age 62 then completes ten quarters and has his 40
qtrs. and applies for social security what affect does that have on
his retirement annuity?
b) Is his retirement annuity reduced and he receives his full complement
of social security, or does his annuity remain the same and his
social security is less.
c) The Windfall Elimination Provision will reduce his Social Security
benefit by more than 1/2. |
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Definition
a) None.
b) I The Windfall Elimination Provision will reduce his Social Security
benefit by more than 1/2.
c) Nothing disturbs the CSRS pension. |
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Term
A CSRS is receiving SSB she understands if she re-marries prior to age
55 her annuity would terminate in contrast if she re-marries after age
55 her annuity continues till she passes, is she correct? |
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Definition
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Term
I will be 55 in Jan with 32 years of service. I know our retirement is
based on our high 3 years of income. But my question to you is, when I
do retire and we start getting cost of living raises again, is it based
on my high 3 $ figure or what grade and step I retire as? My next step
increase is April 2012 and I was wondering if there would be any benefit
waiting to retire after I received the step increase. I know it won't
affect my high 3 that much, but was wondering about the cost of living
raise aspect of retirement. |
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Definition
If someone waits to retire after a salary increase, the increase will be added into their high-three salary figure. The benefit of the higher rate will be limited to the number of days they are at the higher rate as a relative part of the three-year period.
A step raise is 3% of salary. If someone waited until the step raise, their high-three would increase only by the number of days they remain employed after that. It's hardly worth the delay.
The COLA that retirees get is applied on December 1st, and goes only to those retirees who retired before that date.
The COLA percentage is applied against the current dollar value of the pension as calculated and paid. The former grade and step held is irrelevant. |
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Term
a) If a federal employee gets divorced, can the divorced spouse get
a Surviving Spouse Benefit if the divorce decree says so even though
their not obviously married?
b) If so, what then happens if the federal
employee wants to get remarried and also have a SSB with the new wife?
c) I also saw that the kids can get survivor benefits also? |
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Definition
a) Yes, if ordered by the court, and if the survivor has not remarried too early (i.e., before age 55).
b) The retired fed would have two years following the new marriage to elect a survivorship for the newly acquired spouse. Both the prior and current spouse can have survivorship payments, at the same time.
BUT ... the total of all monthly survivorship payments to ALL spouses cannot be more than 55% for CSRS retirees (50% for FERS).
If the first spouse was granted 55% (50%), there is nothing left for the second spouse. If less than the max is awarded to #1, the #2 gets the rest of that amount.
Remember too, a former spouse might have been awarded a portion of the actual retirement, which lasts only as long as the retiree is alive.
c) Children have an automatic, free survivorship that is terminated by age/marriage/dropping out of school. For FERS retirees, the children's survivorship is 100% offset against any SSA survivorship they may have. |
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Term
QUESTION
A employee who is receiving a military pension, and he was deploying for
2 years during that. He is thinking he can get some credit toward his
civilian time for service abroad. Is he correct? |
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Definition
If the pension was based on service TIME and not on service-connected DISABILITY, then no.
We don't care where a military member served for purposes of retirement. |
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Term
| How much annual leave can an employee take into the next year? |
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Definition
| 30 days or 240 hours can be carried over from the previous year into the next year, any hours over 240 will be lost the first full payroll week of the next year. |
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Term
| Can an employee transfer funds from the TSP with a loan? |
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Definition
| Yes, but if they are retired they must sign the letter provided by TSP first. This letter is only issued to the client after TSP receives the retirement code for the employee. |
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Term
| Can a retiree change their FEGLI election? Can they elect the 75% reduction after they retire and selected no reduction at retirement? |
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Definition
A federal employee can change their FEGLI elections after retirement but must send signed letter requesting it to the retirement office.
If an employee wishes to change from no reduction to a reduction they must elect the 75% reduction. But once they elect the reduction the extra premium stop and the reduction is retroactive as if they elected the reduction at retirement.
Write to: U.S. Office of Personnel Management, Retirement Operations Center, P.O. Box 45, Boyers, PA 16017-0045 |
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Term
| Does Tri-care count towards the FEHB 5 year requirement? |
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Definition
A federal employee must be enrolled in FEHB for 5 years prior to continuing it into retirement (this includes a spouse being enrolled as well).
Tri-care does count towards the 5 year rule. However, the employee must be enrolled in FEHB on the date of retirement in order to continue coverage. |
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Term
| If an employee retirees in the middle of the year, does their income prior to retirement date affect their earnings test for Social Security? |
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Definition
| No, as long as they cease working before their declared retirement date at Social Security. |
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