Retirement Basics. Bureau of Indian Education Human Resources Office 2014

Transcription

1 Retirement Basics Bureau of Indian Education Human Resources Office 2014 Objectives Participants will be able to: Describe the 3 retirement systems Explain factors considered for retirement eligibility versus computation Describe steps for retirement planning Identify sources of information available for research 1

2 Retirement Systems Which retirement system are you in? FICA CSRS FERS And what does it mean? Retirement Systems CSRS 1920 Social Security 1935 CSRS Interim FERS 1987 FERS RAE 2013 FERS FRAE

3 How can I tell what system I am covered by? SF50B Notification of Personnel Action Leave & Earnings Statement Retirement Systems CSRS FERS 7% to CSRS Fund.80% to FERS Fund (3.1% for FERS RAE) (4.4% for FERS FRAE) Social Security 0% Social Security 6.2% (unless CSRS Offset) Medicare 1.45% TSP employee share (deferral limit $17,500 for 2014) TSP Gov t share is 0 TSP Gov t share Agency Automatic 1% Match up to first 5% 3

4 CSRS: Retirement Income CSRS Annuity Thrift Savings Retirement Income *CSRS Offset employees may have Social Security benefit FERS: Retirement Income FERS Annuity Thrift Savings Social Security Retirement Income 4

5 Types of Retirement Optional or immediate voluntary Disability 2X paperwork Early Out (OPM authority) Discontinued Service reduced age/service requirements Deferred no benefits, frozen Hi 3 Retirement Eligibility Contributing to retirement fund (being in covered position) Years of Creditable Service (retirement Service Computation Date) Age at Retirement 5

6 CSRS: Age & Service Requirements Must have at least 5 years of Federal Civilian service 1 of last 2 years under CSRS Age & Service requirements 62 years of age & 5 years of service 60 years of age & 20 years of service 55 years of age & 30 years of service FERS: Age & Service Requirements Must have at least 5 years of civilian service Age & Service requirements 62 years of age & 5 years of service 60 years of age & 20 years of service Minimum Retirement Age (MRA) & 30 years of service MRA & 10 years of service (* reduction for being under age 62 5% per year) 6

7 FERS: Minimum Retirement Age If you were born Your MRA is Before In and 2 months In and 4 months In and 6 months In and 8 months In and 10 months In In and 2 months In and 4 months In and 6 months In and 8 months In and 10 months In 1970 and after 57 Data Scrub: Time Intensive Process Service History Review of Official Personnel Folder for creditable service Track down other periods of service (other OPFs) Check for part time or intermittent periods Check for correct coverage Math calculate service computation date (SCD) 7

8 Data Scrub: Time Intensive Process Benefits & other Factors Current benefits and how long have had them Check with Office of Personnel Management (for deposit or redeposit time) Math calculate salary Creditable Service: What is it? Periods of service viewed for what makes you eligible to retire Periods of service considered for use in calculation of annuity Retirement SCD Easily confused with Leave SCD Posted on Employee Benefits Statement (through Employee Express) 8

9 Creditable Service: What is it? Temporary time or FICA time Work periods not covered by retirement contributions Referred to as deposit time Military Service periods Service covered under FICA Research military earnings Regular service vs National Guard Refunded service Withdrew retirement contributions and interest Temporary Service CSRS Prior to 09/30/82 and no deposit Credit for eligibility Credit for calculation Reduction applies After 10/01/82 and no deposit Credit for eligibility NO credit for calculation FERS Before 01/01/89, must make deposit to count for eligibility and calculation After 12/31/88, no option to buy back No credit for eligibility No credit for calculation Credit for Social Security benefits only 9

10 Military Service (post 1956) CSRS FERS Honorable Discharge (member copy 4 of DD214) If military retired pay, must be waived unless combat connected disability 7% Deposit Require 3% Deposit Required Interest applies Requires info from Defense Finance Accounting System (DFAS) If hired before 10/01/82, no deposit required (re evaluate at age 62) If hired after 09/30/82, deposit required No deposit, no credit Refunded Service CSRS Before 10/01/90 and no redeposit, credit for eligibility and apply actuarial reduction After 09/30/90 and no redeposit, credit period for eligibility only FERS Must be employed on or after 10/28/2009 to credit for eligibility No deposit required Credit for calculation when deposit made 10

11 Unused Sick Leave CAN NOT be used as part of hi 3 period CAN NOT add to years of service to meet eligibility Used ONLY in calculation What if I have prior service? Please complete SF 144 and submit to Servicing Human Resources Office Consolidate civilian records Identify creditable service Ensure correct retirement coverage 11

12 Contract Year vs Calendar Year More than 6 months of non pay periods in a calendar year is NOT creditable * Calendar Year 1 January May August December Calendar Year 2 January May August December *Exceptions under OWCP or USERRA Annuity Calculation Years of creditable service Unused sick leave Average 3 consecutive years of highest salary Normally last 3 years of service 12

13 Annuity Formula CSRS 1.75% X hi 3 salary X 5years 1.50% X hi 3 salary X 5 years 2.00% X hi 3 salary X remainder years of service FERS 1.00% X hi 3 salary X years of service Age 57 with 30years of service plus 2087 hours of unused sick leave. Her Hi 3 salary is 30, % X 30,000 X 5 = % X 30,000 X 5= % X 30,000 X 21=12,600 Total = Divide by 12 = % X 30,000 X 31 = 9300 Total = 9300 Divide by 12 = Other Factors Can Affect Amount Part time service Federal Withholdings Deposit time Redeposit time Survivor annuity How much to leave for spouse Election can affect FEHB coverage 13

14 Other Factors Can Affect Amount Life insurance have coverage in place 5 yrs. prior to retirement date (or earliest opportunity) FEDVIP Dental & Vision Insurance Program requires coordination for direct billing until annuity finalized/adjudicated Health insurance have coverage in place 5 yrs. prior to retirement date (or earliest opportunity) Coordination of Medicare & FEHB coverage FERS Special Supplement For employees who retire with an immediate annuity before age 62. Calculated based on earnings and lasts only until age 62: MRA with 30 years of service Age 60 with 20 years of service early out or involuntary retirement Other special provisions for LEOs, FFs, ATCs 14

15 Retirement Planning What do I do? Where do I start? When should I start? Retirement Planning Understand your current benefits and ask questions Gather information, read your statements: Leave & Earnings Social Security Thrift Savings Plan Understand the retirement requirements Attend an in depth retirement training 15

16 Retirement Planning Submit a Request for Retirement Estimate Available online Follow up with consultation session Review your Official Personnel Folder Check for all service periods Recognize the life change Save money Reorganize bills Find hobby or other non Federal employment Retirement Planning Retirement Estimate Request Takes about 4 hours to research/calculate Schedule consultation (telephone or in person) Consultation session Review service history Review estimate Impact of Social Security and/or TSP Timeline of process Walk through of application (let us know to prepare an application takes time too!) 16

17 Online Research Check out for more information on requirements View Leave & Earnings statement and a Employee Benefits Summary statement Review your electronic Official Personnel Folder (eopf) (must be on BIE network) Online Research Request and view copy of Social Security statement Review or manage your TSP account 1 TSP YOU FRST ( ) 17

18 Thank You! Class Dismissed! Questions? us at 18