FERS FEDERAL EMPLOYEE RETIREMENT SYSTEM

Transcription

1 FERS FEDERAL EMPLOYEE RETIREMENT SYSTEM Special Retirement Provisions for Fire fighters Taska Elin

2 References United States Code: 5 U.S.C (14); 8412(d); 8425 Code of Federal Regulations: 5 C.F.R. 842, subpart H The CSRS and FERS Handbook for personnel and Payroll Offices : Chapters 46, 54, 61 and 70

3 Firefighter Definition An employee occupying a rigorous position whose primary duties are to perform work: Directly connected with the control and extinguishment of fires. This includes an employee occupying a rigorous position that moves directly into a secondary position after completion of at least 3 years in a primary position. Not included in the definition : an employee whose primary duty is the performance of routine fire prevention inspections.

4 Primary and Rigorous Definitions The duties of a position that: Are paramount in influence or weight that they constitute the basic reason for the existence of the position Occupy a substantial portion of the individuals work time Are assigned on a regular of reoccurring basis A position in which the duties are so rigorous that employment opportunities should be limited through the establishment of a maximum hiring age and physical qualifications to those who are young and physically vigorous and whose primary duties are connected to extinguishment of fires

5 How do I know if I am in a qualified position and in the correct retirement system? SF-50 Block 30 FERS Retirement Code - M

6 Eligibility for Retirement Early retirement - 25 years credible service at any age Special optional retirement 20 years credible service and at least 50 years of age (Note service outside the 081 series such as military time does not count toward eligibility for the first 20 years of service)

7 Credible Service Primary/Secondary years of service Federal service outside the 0-81 job series Military service Sick leave

8 Military Service Complete RI 20-97, Estimated Earnings During Military Service. Submit completed form(s), along with a copy of your DD 214 (or equivalent directly to the military branch in which you served. You will receive a "Statement of Estimated Earnings During Military Service" from the military when they have processed your request. Submit Military Deposit Paperwork to the Civilian Benefits Center (CBC) that services you. The CBC staff will review the paperwork you submitted to assure that it is complete. Your retirement coverage date will be certified and the package will be forwarded to the Payroll office for processing. Payroll will calculate the amount of your deposit and will set up a payment account for you. You will receive a letter from your payroll office stating the amount of the deposit; before you receive the letter you may notice on your DFAS Leave & Earnings Statement in block 20 the amount of your military deposit will appear. Your payroll office will provide your payment options to after your deposit amount has been calculated. Contact DFAS and request a receipt of payment in full of your military service deposit. This statement can be mailed to you or sent via . Send a copy of the payment in full through your CBC for entry into you EOPF. If this letter is not entered into your EOPF your retirement will not include the qualifying military time. (See handout page 2)

9 Sick Leave FF sick leave balance x 40 = hours /Weekly Tour of duty hours (i.e. 72 or 56) = hours of regular sick leave. (See handout page 3) Use chart to find out how much time it equals

10 Computing Credible Service Now that we have covered what counts toward credible service time lets compute our total credible service Place service dates on worksheet (page 11 of handout) Compute total credible service time

11 Computing Base Pay for Retirement Find normal GS rate for your highest step and grade and locality pay for your area. (see handout pages 4-8 then enter amount on Handout page 9) Divide that number by 2756 = hourly rate (divide by 2087 if your work includes a normal M-F 40 hour work week). Multiply hourly rate by normal hours per week (i.e. 144 or 106) = normal pay period Take normal pay period amount and multiply by 26 (pay periods per year). That gives you the Federal Fire Base pay.

12 Converted Annual Pay Your highest 3 years of base pay are used when you calculate you annuity Place salary/salaries from page 9 into time blocks on page 10 to compute average.

13 Computation of Benefits Go to page 11 of handout and enter high 3 from page 10 into the 2 blocks. 1.7% x High-3 Average Salary x 20 years of FF service 1% x High-3 Average Salary x additional years of credible service exceeding 20 years

14 Retiree Annuity Supplement A retiree annuity supplement (SS supplement) is payable before age 62 in addition to the basic annuity. Years of Creditable Service / 40 X Age 62 SS Supplement = FERS Supplement The Supplement is treated much like Social Security Income. And if you take any Social Security income before your full Social Security Age (which varies from 65 to 67 depending on the year you were born) your Supplement is subject to a reduction and possibly taxes. If you will have earned income (ex: a part-time job) after you retire from Federal service, your Supplement may be reduced. (Note not subject to reduction till after reaching minimum retirement age or MRA) What counts toward that limit? Earned income which is essentially any income you receive as a W-2 wage. So if you earn more than limit set that years, your FERS Supplement will be reduced. For every $2 you earn above the limit, your FERS Supplement will be reduced by $1. The Supplement will stop the month you turn age 62. And it stops whether or not you have started drawing Social Security at age 62.

15 Taxes and Your Retirement The IRS defines wealthy as having a combined income (for Married Filing Joint) over $32,000. And combined income includes the sum of your adjusted gross income from your 1040 plus non-taxable interest plus one-half of your Social Security benefits. So now it s not only your earned income that is considered it is all of your income including your regular FERS pension, any TSP withdrawals, investment earnings, Alaska PFD, alimony, etc. etc. etc. If you re combined income is over $32,000, but below $44,000 50% of your FERS Supplement is subject to Federal income taxes. If you have a combined income greater than $44,000, then 85% of your Supplement will be subject to Federal income taxes.

16 Survivor Annuity When you retire, you have the option of providing a survivor annuity. This means that when you die, your survivor will continue to receive a portion of your pension every month. There are three different survivor annuity options you can choose... Full FERS Survivor Annuity - 50% of Your Pension (at a cost of 10% of your regular monthly pension) Reduced FERS Survivor Annuity - 25% of Your Pension (at a cost of 5% of your regular monthly pension) No Survivor Annuity (If your spouse is not receiving a survivor annuity benefit - they will not be eligible for FEHB health insurance after you die) If you are married, you will need your spouse's written permission to choose anything other than the full survivor annuity.

17 Federal Employee Group Life Insurance As an eligible employee, you are automatically enrolled in Basic insurance unless you waive this coverage. Basic insurance covers your life for whichever is greater: 1) Your annual rate of basic pay, rounded up to the next even $1,000, plus $2,000; or 2) $10,000. There are three types of Optional insurance: Option A-Standard, Option B- Additional, and Option C-Family. Option A insures your life for $10,000. Option B insures your life for 1, 2, 3, 4, or 5 multiples of your annual rate of basic pay rounded up to the next even $1,000. Option C insures the lives of your spouse and eligible dependent children. It comes in 1, 2, 3, 4, or 5 multiples of coverage. Each multiple is equal to $5,000 for a spouse and $2,500 for each eligible dependent child.

18 FEGLI after Retirement When you retire, you are eligible to continue FEGLI if you meet all of the following requirements: You are entitled to retire on an immediate annuity under a retirement system for civilian employees; You have been insured for the 5 years of service immediately before the starting date of your annuity, or for the full period(s) of service during which you were eligible to be insured if less than 5 years; You are enrolled in FEGLI on the date of retirement; and You have not converted to an individual policy.

19 Post 65 Reduction of FEGLI If you are eligible to continue your Basic insurance as an annuitant you must choose the amount of Basic insurance you want to continue after age Percent Reduction, your Basic insurance reduces by 2 percent of the preretirement amount each month beginning at age 65 until 25 percent of the preretirement amount remains. (note coverage is free after age 65) 50 Percent Reduction, your Basic insurance reduces by 1 percent of the preretirement amount each month beginning at age 65 until 50 percent of the preretirement amount remains. (note coverage cost additional amount even after age 65) No Reduction, your Basic insurance will not reduce and 100 percent of the preretirement amount is payable as a death benefit. (note coverage cost additional amount even after age 65) Option A coverage automatically begins reducing by 2 percent of the pre-retirement amount each month until 25 percent of the pre-retirement amount remains. Option A is free once it starts to reduce. There is no reduction election to make at time of retirement for Option A. Option B and C you must choose how many of your Option B and/or C multiples you want to continue. You must also choose whether to have some or all of those multiples reduce after age 65. If you choose Full Reduction, after you are retired and upon reaching age 65, each multiple starts reducing by 2 Percent of the preretirement amount each month until the amount has been reduced by 100 Percent and the final value = $0.

20 Federal Employee Health Benefits You are eligible to continue health benefits coverage, upon retirement, if you meet all of the following requirements: you are entitled to retire on an immediate annuity under a retirement system for civilian employees (including FERS MRA + 10 retirements); and you have been continuously enrolled (or covered as a family member) in any FEHB plan(s) for the 5 years of service immediately before the date your annuity starts, or for the full period(s) of service since your first opportunity to enroll (if less than 5 years). Benefits and Cost; As an annuitant, you are entitled to the same benefits and Government contribution as non-postal active employees enrolled in the same plan. Your share of the enrollment cost also continues to be the same as for a non-postal employee and is deducted from your annuity payments.

21 TSP Withdrawals after you separate : There are two types of post-separation withdrawals: A partial withdrawal A full withdrawal Partial withdrawal. You can take out $1,000 or more and leave the rest in your account until you decide to withdraw it at a later date. You may make only one partial withdrawal from your account. If you made an age-based in-service withdrawal, you are not eligible for a partial withdrawal. Full withdrawal. You choose how your entire account will be distributed using one or any combination of three withdrawal options available to you: A single payment A series of TSP monthly payments A life annuity purchased for you by the TSP A single payment allows you to withdraw your entire TSP account at one time in one payment. It is sometimes referred to as a lump sum.

22 TSP Continued Withdrawals after you separate continued: TSP monthly payments allow you to withdraw your entire account in a series of payments that will be paid to you each month from your TSP account. You can ask for a specific dollar amount each month or you can have the TSP calculate a monthly payment based on your life expectancy. If you choose a specific dollar amount, it must be at least $25. An annuity pays a benefit to you (or to your survivor) every month for life. The TSP purchases the annuity on your behalf from a private insurance company. You can have the TSP purchase an annuity with all or any portion of your account balance when you request a full withdrawal. In general, the amount you use for the purchase of an annuity must be $3,500 Withdrawal deadline. If you are separated from Federal service you are required to make a withdrawal choice for your TSP account balance by April 1 of the year following the year you become age 70½. If you do not withdraw (or begin withdrawing) your account by the required withdrawal deadline, your account balance will be forfeited to the TSP.

23 TSP Death Benefit In the event of your death, your account will be distributed to the beneficiary or beneficiaries you designate on the TSP s Designation of Beneficiary form. In order for beneficiaries to receive your account balance after your death, they (or their representatives) must complete Form TSP-17, Information Relating to Deceased Participant, and send it to the TSP along with a copy of the certified death certificate. If your spouse is a beneficiary of your account and your spouse s share is $200 or more, a beneficiary participant account will be established in your spouse s name. Any death benefit processed from your account for your spouse will be deposited into this TSP account and invested in the G Fund. Your spouse can leave the money in the TSP and manage the investments in the TSP s funds, combine the account with his or her own TSP account, if applicable, or withdraw the money using any of the TSP post-separation withdrawal options described on previous slides.

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