I spend a lot of time answering individual readers’ questions about the windfall elimination provision. I’ll attempt to answer many of the basic questions for a broader audience here. The windfall elimination provision primarily affects you if you earned an annuity in any job where you did not pay Social Security taxes — such as a job under the Civil Service Retirement System — and you also worked in other jobs long enough to qualify for a Social Security benefit. To qualify for a Social Security benefit, you need a minimum of 40 credits, which are earned at a rate of…
Monthly Archives: July, 2010
Q: I’m a 45-year-old disabled retiree with 25 years of service. If I am getting $2,800 a month on Social Security disability and $1,695.00 on Federal Employees Retirement System disability after my first year, how much will I get when both are combined? I understand the Office of Personnel Management makes some calculations on this, but I can’t figure them out. Based on the information above, can you give me an estimate total of both after reduction. A: I’ll give you the formulas; then you can do the arithmetic. For the first 12 months on FERS disability retirement, a retiree…
Q: I began my civil service career in August 1972 and resigned in August 1980. When I left, I was covered under the Civil Service Retirement System. I returned to work in December 1984 and was a CSRS Offset employee. At that time, I could find no one who could explain to me what “Offset” meant. Then the push for employees to move to the Federal Employees Retirement System began, and since no one seemed able to explain to me what “Offset” meant, and I had to make a decision by a certain date, I made the uninformed decision to…
Q: Can a Federal Employees Retirement System retiree get another FERS position after retirement? Will one’s retirement pension time be recalculated? Are there other considerations? A: Yes. Unless you are hired into a position that allows you to receive both your full annuity and the full salary of your new position — for which you would get no additional retirement credit — your salary would be reduced by the amount of your annuity. If you worked for at least one year, you’d be eligible for a supplemental annuity. If you worked for five years or more, you’d be eligible for…
Q: Why are Federal Employees Retirement System retirees penalized for wanting to work? Why does a rule apply to our retirement when the money does not come from Supplemental Security Income? I have worked for over 30 years and I should receive my retirement check without any penalties or limits. A: Since your FERS annuity cannot be reduced if you continue to work, you must be talking about the special retirement supplement. The SRS approximates the Social Security benefit you earned while employed under FERS, As such, it follows the same rules that apply to a Social Security benefit. If…
Q: I received a federal disability pension in 1991. I retrained and was able to work until 2004 when the same condition worsened. I applied for Social Security disability compensation and eceived it in 2008. I just received a notice that the federal civil service disability pension is considered a windfall. A calculation will be made with the windfall rule to reduce my Social Security disability. Is this discrimination against the disabled? Is there a way that I can fight or protest this situation? A: Apparently, you are subject to the windfall elimination provision, which applies to the Social Security…
Q: I served in the Air Force from 1971 to 1977. In 1977, I joined the Air National Guard. I retired from the Air National Guard in 1991 with 20 years of military service. In 1977, I also got a job with the federal government as a civilian employee under the Civil Service Retirement System. In 1986, I paid back my six years of active-duty time I spent in the Air Force into CSRS. I am planning to retire in 2011 from the federal government with 40 years creditable service in CSRS (this includes the six years of military time…
Q: In previous responses, you indicated that when a lump-sum payment is made, federal and state income taxes and Medicare will come out of the payment. You also indicate Social Security can be taken out. As a Civil Service Retirement System employee, I do not pay into Social Security, so does that mean that no CSRS retirement payments will be taken out? Also, the lump sum will be close to $80,000 and should be paid in my last paycheck; are there any limitations on payouts? A: Social Security deductions would only be made for those who are covered by Social…
Q: I am an air traffic controller (ATC) with the Defense Department. I’m 53 years old and have met eligibility for the optional retirement. I have been deemed permanently medically disqualified to perform ATC duties due to prescribed medication for a stress-related disorder. A lot of what I’m reading tells me I am facing involuntary separation, which qualifies me for discontinued service retirement if my local human resources agency cannot find a alternate position due to my limited qualifications and my grade (I’m a GS-12 with less than a bachelor’s degree and I’m only experienced in ATC, live-fire range operations…
Q: I am trying to figure out how Federal Employees Retirement System contributions deducted from my pay work. Are they included in retirement pay? I know about the high-3, the 1 percent or the 1.1 percent, and the total years of service and months used for computing retirement annuity. I just don’t understand the FERS subtraction and how it fits, or if it does, into the retirement annuity equation process. A: The retirement contributions that are deducted from your pay have no direct bearing on what you will receive in your annuity. It will be based on a formula that…