CONTENTS Chapter 1 Introduction and General Overview... 1 Employee Responsibilities... 1 Agency Responsibilities... 1 Chapter 2 What All Employees Need to Do Early in Their Careers... 3 Knowing When You'll Be Eligible to Retire...3 Knowing What Your Annuity Will Be...4 Changing and Verifying Necessary Personnel Forms... 6 Deposits for Temporary Time... 7 CSRS Deposit Service... 8 CSRS Effect of Making a Deposit... 9 FERS Deposit Service... 10 How to Make a Deposit for Non-deduction Service... 12 Chapter 3 What You Need to Know About Redeposits... 13 Redeposit Service Under CSRS or CSRS Offset... 13 Refunded Service Ending before Oct. 1, 1990... 14 Refunded Service After Sept. 30, 1990... 16 Partial Redeposits... 16 Redeposit Service Under FERS... 18 Chapter 4 Military Service and Military Deposits... 19 Military Service Creditable Under CSRS... 19 Conditions for Receiving Credit for Military Service... 20 Waiver of Military Retirement Pay... 21 Conditions for Receiving Credit for Post-l956 Military Service... 21 Receipt of Military Retired Pay... 21 Post-1956 Military Service of Employees Hired After Sept. 30, 1982... 22 Post-1956 Military Service of Employees Hired Before Oct. l, 1982... 23 Amount of Service Credited... 23 Concurrent Military and Civilian Service Military Furlough... 24 iii
FEDERAL EMPLOYEES RETIREMENT GUIDE Military Service Creditable Under FERS... 24 Service Credit Payments for Post-l956 Military Service CSRS... 25 Who Can Make a Military Service Deposit?... 25 Procedure for Making the Military Deposit... 26 Planning Tip... 26 Paying the Deposit... 26 Computing the Amount of Creditable Military Service... 27 Determining the Amount of Basic Pay... 27 Computing the Military Deposit CSRS... 27 General Rules for Computing the Interest Due... 28 Computing the IAD... 28 Computation of Composite Interest Rate for Employees First Employed Under CSRS on or After Oct. 1, 1983... 30 Establishing the Deposit Account... 31 Completed Payments... 32 Planning Tip... 32 FERS-Covered Employees and Military Deposits... 33 Military Service Subject to FERS Military Service Deposits... 33 Who Can Make a Military Service Deposit?... 34 Computing the Interest Due... 35 Refund of Military Deposit... 35 Contacts for Documentation of Actual Military Earnings... 36 Chapter 5 Five-Year Period Before Retirement... 38 Continuing Health Benefits Enrollment Into Retirement... 38 Continuing Life Insurance Coverage Into Retirement... 39 Considerations for Long-Term Care Insurance... 39 Verifying Civilian and Military Service... 40 Deposits for Civilian and/or Military Service... 40 Documentation of Social Security Coverage... 40 Considerations for the Thrift Savings Plan (TSP)... 40 iv
CONTENTS Contributing to Roth IRAs... 41 Estate Planning Considerations... 41 Chapter 6 One-Year Period Before Retirement... 42 Completeness/Accuracy of Health and Life Insurance Records... 43 Confirming Your Eligibility to Retire... 44 Reviewing Survivor Benefit Considerations... 44 FERS Employees Who Elect Immediate Retirement Under MRA + 10 Retirement... 45 CSRS Voluntary Contribution Program (VCP)... 46 Annuity Estimates... 46 Planning Tip... 47 Cost-of-Living Adjustments (COLAs)... 47 TSP Withdrawal Options... 48 Effect of Social Security Benefits on CSRS Offset Employees... 48 Lump-Sum Payment of Annual Leave... 48 Federal Income Taxes... 48 State Income Tax Withholdings from Annuity Checks... 49 Office of Workers Compensation Payment (OWCP) Benefits... 49 Six-Month Period Before Retirement... 49 Two-Month Period Before Retirement... 51 Retirement Application Process and OPM Responsibilities... 52 OPM Processing of Applications... 53 Chapter 7 Insurance Issues Facing Federal Retirees... 55 FEHB Coverage After Retirement... 55 Contacting FEHB Plans... 57 Federal Dental and Vision Insurance Program... 60 Life Insurance During Retirement Through FEGLI... 64 Federal Long-Term Care Insurance Program... 66 v
FEDERAL EMPLOYEES RETIREMENT GUIDE Chapter 8 Cost-of-Living Adjustments... 75 CSRS... 75 Proration of the First CSRS or CSRS Offset COLA... 77 Survivor Annuities Spouse, Former Spouse, Insurable Interest... 78 Survivor Annuities Children... 78 Miscellaneous Provisions for CSRS Annuitants... 78 FERS... 78 Proration of First FERS COLA... 79 Transfer Employees with a CSRS Component... 79 Survivor Annuities Spouse, Former Spouse and Insurable Interest... 80 FERS Disability Annuitants... 80 Re-employed FERS Annuitants... 80 Chapter 9 The Thrift Savings Plan After Retirement... 81 General Withdrawal Rights and Procedures... 81 Withdrawal Options... 81 Monthly Annuity Amounts... 83 Spousal Rights... 83 Withdrawal Requests... 85 Transferring Your TSP Account... 85 Taxation of Withdrawals... 86 Reporting Changes in Personal Information... 88 Leaving Your Money in the TSP... 89 TSP, Beneficiaries and Death Benefits... 90 Required Minimum Distributions... 91 What Happens During Your First Distribution Calendar Year... 93 What Happens During Your Second Distribution Calendar Year... 94 What Happens During Third and Subsequent Years... 95 TSP Materials and Contacts... 96 vi
CONTENTS Chapter 10 Federal Annuitants and Social Security... 100 Coverage of Federal Employees... 101 Earning Social Security Credits... 102 Paying Taxes and Reporting Earnings... 103 Monthly Benefit Payments... 103 Computation of Social Security Benefits... 104 Pros and Cons of Taking Social Security Retirement Benefits Earlier Than One s FRA... 106 Benefit Estimates... 108 Social Security Survivor Benefits... 109 Dependent Benefits... 111 The Earnings Test... 112 Windfall Reduction Benefit Computation... 113 Government Pension Offset (GPO) for Spousal Benefit... 117 One-Time Death Benefit Payment... 118 Applying for Social Security Retirement Benefits... 118 When Benefit Payments Start... 118 Contacting Social Security... 119 Chapter 11 Federal Annuitants and Medicare... 121 Health Insurance Benefit Changes After Retirement... 121 Medicare... 121 Medicare Enrollment Issues... 125 Medigap Enrollment Issues... 126 Which Pays First?... 126 FEHB Enrollment Issues... 127 Medicare Managed Care Plan Issues... 127 Chapter 12 - Re-employment of Annuitants... 129 General Rules Governing the Re-employment of Annuitants...129 Effect of Re-employment on a CSRS Annuity...129 Effect on FERS Annuity...131 vii
FEDERAL EMPLOYEES RETIREMENT GUIDE Re-employment Under Broad Based Authorities...131 Agency-Based Exceptions...134 Other Exceptions...135 Leave Accrual...136 Supplemental and Redetermined Annuities...136 Special Considerations...137 Disability Retirees...138 Health Insurance...138 Life Insurance...139 Long-Term Care Insurance...140 Dental and Vision Insurance...140 Flexible Spending Accounts...141 Thrift Savings Plan...141 Buyouts...141 Employment in the Private Sector...142 Appendix... 143 Checklist for Employees Preparing to Retire... 143 One Year or More Before Retirement... 143 The 10 Smartest Things Things You Can Do As You Approach Retirement... 147 Address for General Inquiries... 148 Addresses for Specialized Retirement Functions... 148 CSRS and CSRS Offset Employees: Annuity Estimates You May Need... 150 FERS Employees: Annuity Estimates You May Need... 151 Information About Federal and State Income Tax Withholdings... 152 viii