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Retirement FAQs Pre-Retirement

  • FEHB and FEGLI will stay with the employing agency.  FEGLI benefit coverage amounts will be based upon the full time salary for the position.  The FEHB employer contribution will be the same as for full-time employees.
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  • To make this workable and avoid intractable administrative problems, no survivor benefits can be based upon a Phased Retirement annuity.  If the individual dies prior to full retirement, survivor benefits will be those applicable for an employee who died in service, with provision for minor computational adjustments necessitated by the unique nature of Phased Retirement.
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  • Phased Retirement Annuities will be subject to court orders providing for division, allotment, assignment, execution, levy, attachment, garnishment, or other legal process on the same basis as other annuities.
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  • An actuarial reduction allows you to receive benefit without having to pay an amount due in a lump sum. OPM reduces your annuity in a way that, on average, allows the Retirement Fund to recover the amount of the missing lump sum over your lifetime. The actuarial reduction becomes a permanent reduction in your benefit. The amount of the actuarial reduction depends on your age and the amount of the lump sum you would otherwise have to pay at the time you retire. To compute an actuarial reduction, OPM divides the lump sum amount by the present value factor for your age at retirement.
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  • Unless you choose FERS, there is no additional cost to you. If you choose FERS, you will only incur additional costs if you decide to make additional TSP contributions (known as make-up contributions). These are contributions that you could have made if you had been correctly covered by FERS. Of course, you're the one who chooses how much additional contributions you want to make.
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  • Periodic medical exams, if required, are paid out of your pocket.
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  • Employees participating in phased retirement will be paid for the part-time service they continue to provide the government and will receive additional credit for that service toward their full retirement.  These employees will also begin receiving annuity payments, consistent with the retirement benefits they were entitled to prior to entering phased retirement status, pro-rated for the portion of the workweek they spend in retirement.  When the Phased Retiree fully retires, the revised annuity calculation will provide pro-rated service credit for additional time worked during phased retirement. This law incents participants with valuable experience to phase into retirement by providing phased retirees with more income than they would earn working part time, and more income than they would earn by fully retiring. Once these individuals fully retire, they will be entitled to a greater annuity than if they had fully retired at the time of transition to Phased Retirement, but less than if they had continued employment on a full-time basis during the period of Phased Retirement.
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  • You can go ahead and process any error that lasted for less than 3 years of service after December 31, 1986 with one exception. If the error is one where the employee was erroneously put in FERS during the time that the employee could have voluntarily elected FERS (these are sometimes called "deemed FERS" errors), then you should not correct these types of errors. Do not correct the deemed FERS errors even if the error lasted for less than 3 years of service. In the coming months, OPM will issue detailed instructions for correcting each type of error that is affected by FERCCA. Please do not begin correcting coverage errors affected by FERCCA until you receive OPM's instructions.
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  • FERS stands for the Federal Employees Retirement System. FERS became effective in 1987 and most new Federal civilian employees hired after 1983 are automatically covered by FERS. FERS is a three-tiered retirement plan. The three components are the:
    • FERS Basic Benefit
    • Social Security Benefit
    • Thrift Savings Plan Benefit
    Most FERS employees pay 0.8% of basic pay for FERS basic benefits. The agency contributes 10.7% or more to FERS. The FERS basic benefit provides retirement, disability, and survivor benefits and may be reduced for early retirement or to provide survivor protection. The FERS basic benefit is computed based on your length of service and the highest average basic pay you earned during any 3 consecutive years of service (know as the "high-3" average pay). Generally, the FERS basic benefit is 1% of your high-3 average pay times your years of creditable service.   FERS employees can currently contribute up to 11% of basic pay to the Thrift Savings Plan. An automatic Government contribution adds 1% of basic pay to every FERS employee's TSP account. The Government adds up to another 4% of basic pay, depending on how much the employee chooses to contribute.
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  • Look at any of your Standard Form 50s (Notifications of Personnel Actions). There's a block that shows your retirement plan. It's Block 30 on all current SF-50s. You'll see a code followed by an acronym that represents your retirement plan. Most Federal employees are in one of four possible retirement plans. They are: Retirement Plan Commonly Called SF-50 Civil Service Retirement System CSRS Code 1 or 6 Civil Service Retirement System and Social Security CSRS Offset Code C or E Social Security Only FICA Code 2 Federal Employees Retirement System FERS Code K, L, M, or N "FICA" indicates Social Security coverage on your SF-50. For example, your retirement coverage as it appears on the SF-50 may be CSRS and FICA instead of CSRS Offset or FERS and FICA instead of FERS. If your agency does not use Standard Form 50s, you can find your retirement plan on the form it uses to notify you of personnel actions.
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  • FERCCA is the Federal Erroneous Retirement Coverage Corrections Act. It is a law that addresses the long-term harm to retirement planning created when employees are put in the wrong retirement plan.
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  • The earliest a person can start receiving Social Security retirement benefits is age 62. Your Social Security retirement benefit is reduced if you begin receiving them before your full retirement age. Full retirement age has been age 65 for many years. However, beginning with people born in 1938 or later, that age will gradually increase until it reaches 67 for people born after 1959. Year of Birth Full Retirement Age 1937 or earlier 65 1938 65 and 2 months 1939 65 and 4 months 1940 65 and 6 months 1941 65 and 8 months 1942 65 and 10 months 1943 - 1954 66 1955 66 and 2 months 1956 66 and 4 months 1957 66 and 6 months 1958 66 and 8 months 1959 66 and 10 months 1960 or later 67
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  • We believe that the number of employees in the wrong retirement plan is very small. Agencies have discovered and corrected many retirement coverage errors. However, we are certain some employees still are in the wrong retirement plan. If you have not worked for the Federal Government continuously since 1983, or you have had changes in appointment types and retirement plans, then you may want to ask your agency to review your retirement coverage to ensure that it is correct.
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  • TSP stands for the Thrift Savings Plan. The TSP is an important benefit designed to help you save for your future. The TSP is comparable to a private-sector tax-deferred 401(k) plan. You can participate in the TSP if you are covered by FERS, CSRS, or CSRS Offset. The TSP offers all participants:
    • Tax deferral on contributions
    • A choice of 5 investment funds
    • A loan program
    • In-service withdrawals for financial hardship or after age 59
    • A choice of post-separation withdrawal options
    • The ability to transfer money from other eligible retirement savings plans into your TSP account
    The TSP is especially important for FERS employees because it is one of three parts of your retirement coverage. Beginning July 1, 2001, FERS employees can contribute as much as 11% of basic pay each pay period, up to the IRS annual limit. (The IRS limit for 2001 is $10,500.) As a FERS employee, you can receive 2 types of agency contributions to your TSP account, which together can equal as much as 5 percent of your basic pay.
    1. Agency Automatic (1%) Contributions. When you become eligible, your agency automatically deposits into your TSP account an amount equal to 1% of your basic pay each pay period, even if you do not contribute your own money. After 3 years of Federal civilian service (or 2 years in some cases), you are vested in these contributions and their earnings.
    2. Agency Matching Contributions. When you become eligible, your agency will match the first 3% of basic pay you contribute each pay period dollar for dollar. Each dollar of the next 2% of basic pay will be matched 50 cents on the dollar. You are immediately vested in the matching contributions.
    CSRS employees do not receive any Government contributions in their TSP accounts. However, CSRS employees can still take advantage of the TSP to provide a source of retirement income in addition to your CSRS retirement benefit. Beginning July 1, 2001, CSRS employees can contribute up to 6% of basic pay each pay period.
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  • It depends on what your retirement coverage error was and how long you were in the wrong retirement plan. FERCCA may provide you one or all of the following:
    • You may have an opportunity to choose another retirement plan;
    • You may be reimbursed for certain out-of-pocket expenses you paid as a result of a coverage error;
    • You may benefit from certain changes in the rules about how some of your Government service counts toward retirement; and
    • You may be able to make-up contributions to the Thrift Savings Plan and get lost earnings on those contributions as well.
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Total Count: 216, Number of Pages: 15, Page: 6
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