Frequently Asked Questions Retirement

You can roll over lump sum payments representing your retirement contributions, including voluntary contributions, and applicable interest. An eligible payment can be paid either to you or directly to an individual retirement account or other employee sponsored plan. Your choice will affect the amount of taxes you owe. We are required to withhold Federal income tax from taxable payments over $200 at the rate of 20 percent. However, you may choose to take all or part of these payments in a direct roll over to an individual retirement account or an employer-sponsored retirement plan that accepts roll overs. The taxable portion can be rolled over into the Thrift Saving Plan. If you make this election, we will not withhold the Federal income tax from the taxable payments. You can open an individual retirement account to receive a direct roll over. You must contact the individual retirement account sponsor to find out how to have your payment made to your account. If you are unsure of how to invest your money, you may wish to temporarily establish an account to receive the payment. However, you may wish to consider whether or not you may move any or all of the monies to another account at a later date without penalties or limitations. If you choose to have the payment made to you and it is over $200, it is subject to the 20 percent Federal income tax withholding. The payment is taxed in the year in which it is received unless within 60 days after receiving it, you roll it over to an individual retirement account or retirement plan that accepts roll overs. You can roll over up to 100 percent of the eligible distribution, including the 20 percent withholding. To do so, you must replace the 20 percent withholding within the 60 day period. You will be taxed on any amount that you do not roll over. For example, if you roll over only the 80 percent of the distribution, you will be taxed on the remaining 20 percent. You can find more information about the taxation of payments from qualified retirement plans from the following Internal Revenue Service publications:

• IRS Publication 575, "Pension and Annuity Income",
• IRS Publication 590, "Individual Retirement Arrangements",
• IRS Publication 721, "Tax Guide to U.S. Civil Service Retirement System Payments", and
• Form 4972, "Tax on Lump Sum Distributions".

We will not withhold any amount for Federal income tax if your total taxable lump sum is less than $200. We will request a rollover election when you are eligible for a payment of $200 or more.

A court order related to your divorce or legal separation agreement can:

• Divide your annuity;
• Divide a refund of your retirement contributions made when you leave federal service before retirement;
• Permit your ex-spouse to continue health insurance coverage;
• Require you to assign your life insurance;
• Garnish your annuity to pay alimony, child support, in cases involving child abuse, or for Chapter 13 bankruptcy;
• Award life insurance; or
• Award a survivor benefit.

You can use voluntary contributions you made while working under the Civil Service Retirement System to purchase additional annuity when you retire or you can withdraw the contributions in a one-time payment. You can purchase additional annuity of $7 per year for each $100 of voluntary contributions, plus 20 cents for each full year you are over age 55 when you retire. By electing to take a reduction in the additional annuity, you can also purchase additional annuity for a surviving spouse who may receive a benefit after your death. Most people want to withdraw their voluntary contributions in a one-time payment. If the amount of the voluntary contributions, plus interest, is more than $200, you can roll the funds into an Individual Retirement Account (IRA) or other qualified retirement plan to defer income tax. If you want to withdraw your voluntary contributions, you should submit either a Form RI 38-124 or Standard Form 2802 with the statement in item number seven, "I want only my voluntary contributions to be refunded to me." You can get these forms from your employer. You should submit your request at least 60 days before your expected retirement.

The Office of Federal Employees' Group Life Insurance (OFEGLI) will pay life insurance benefits in a particular order, set by law:

• If the annuitant or employee assigned ownership of life insurance, OFEGLI will pay benefits in the following order of precedence:
  • First to the beneficiary designated by the assignee(s), if any;
  • Second, if there is no such beneficiary, to the assignee(s).
• If the annuitant or employee did not assign ownership and there is a valid court order on file, OFEGLI will pay benefits in accordance with that court order.
• If the annuitant or employee did not assign ownership and there is no valid court order on file, OFEGLI will pay benefits in the following order of precedence:
  • to the beneficiary designated;
  • if there is no such beneficiary, to the widow or widower;
  • if none of the above, to the child(ren), with the share of any deceased child distributed among the descendants of that child (a court will usually have to appoint a guardian to receive payment for a minor child);
  • if none of the above, to the parents in equal shares or the entire amount to the surviving parent;
  • if none of the above, to the executor or administrator of the estate; or
  • if none of the above, to the next of kin as determined under the laws of the State where the annuitant or employee lived.

If you are an annuitant, you can download [119 KB] the Standard Form (SF) 2823, Designation of Beneficiary, and instructions, or contact us and ask that they be sent to you. You need to keep your designated beneficiaries' addresses current. Failure to do so may mean that your beneficiary cannot be located and therefore benefits will not be paid to that person. The preferred way is to file a new Designation of Beneficiary when a beneficiary's address changes. A new address cannot be added directly to the Designation of Beneficiary form itself, since any cross outs, erasures, or alterations in your form may make it invalid.

If you were under 62 when your disability benefit began, and were not eligible for a voluntary immediate benefit, your benefit will be recomputed after you have been retired for 12 months. The recomputed annuity will be 40 percent of your high-3 average salary minus 60 percent of your monthly Social Security benefit, or your earned benefit, whichever is higher. At age 62, your benefit is recomputed as though you had continued working until age 62. (Your average salary is increased by all FERS Cost-of-Living Adjustments paid while you were disabled.)

Refer to information about payments and about address and withholding changes.

We keep a separate mailing address to periodically send you information about your retirement and health and life insurance benefits. You can see the current record of your mailing address on Services Online. Please notify us if this address changes. (If you do not receive your payments through direct deposit, we ordinarily use the same address for mailings and payments.)

In many cases, after receiving the report of a retiree's death, we can start monthly payments to those who are eligible based on the records we have on file. In every case, we will tell you what benefits are payable and provide the necessary forms and help to apply for benefits. If you are the survivor of an employee who has passed away while working for the Federal Government, please contact the personnel office of the Federal agency where the employee worked. You should complete the following form- If the employee was covered under the Civil Service Retirement System (CSRS) at the time of death: Application for Death Benefits/CSRS, Standard Form (SF) 2800 [806 KB] If the employee was covered under the Federal Employees Retirement System (FERS) at the time of death: Application for Death Benefits/FERS, Standard Form (SF) 3104 [741 KB] If you are the survivor of an employee who has passed away after separating from a position with the Federal Government under the Federal Employees Retirement System (FERS), but before receiving any retirement benefits, you should file the following form- Application for Death Benefits/FERS, Standard Form (SF) 3104 [741 KB] Attach any other forms and/or evidence as the application or circumstances require. Attach a copy of the employee’s death certificate and a copy of the certificate of the marriage to the widow or widower. Give the application to the personnel office. A widow or widower who is claiming benefits for himself or herself and on behalf of children should file one application. If a lump sum payment is due following the death of someone who passed away after leaving Government service but before retirement, please complete the Application for Death Benefits, Standard Form (SF) 2800 [806 KB] and attach any other forms and/or evidence as the application or circumstances require. Send it to this address.