Q: What interest rate is applied to excess retirement contributions under the Civil Service Retirement System when the principal is refunded in July 2010? A: Interest rates for excess contributions are applied annually. For excess contributions made during 2010, the interest rate is 3.125 percent.
Monthly Archives: July, 2010
Q: I am in the Air Force Reserve. I am in a dual position and am a master sergeant. I have been in for over 32 years, 26 of them as a civilian. I will reach my high-year tenure (HYT) of 33 years in the military in April 2011. I understand I should be automatically extended until I reach my minimum retirement age (MRA) of 56 years old in November 2011. I would like to confirm that in November 2011, I will be able to retire in the Federal Employees Retirement System due to my mandatory separation from my military…
One of the more innovative features of the Federal Employees Retirement System is a FERS employee’s right to retire on an immediate annuity when he or she reaches minimum retirement age and has at least 10 years of creditable service. This early retirement option is called the MRA+10 provision. Minimum retirement age ranges from 55 for those born before 1948 to 57 for those born in 1970 or later. The 10 years of creditable service must include at least five years of civilian service. While that service may have been under either FERS or the Civil Service Retirement System, you…
Q: Are the Federal Employees Retirement System and special retirement supplement annuities subject to federal income tax? If they are, and your FERS annuity is greater than $15,000, will the special retirement supplement be reduced? A: The special retirement supplement is subject to federal (and, where applicable, state) taxes. However, your special retirement supplement would only be reduced if you had earnings from wages or self-employment. The Social Security earnings test doesn’t count other sources of income, such as annuities.
Q: In previous responses, you indicated that when a lump-sum base closure and realignment payment is made, federal and state income taxes, as well as Medicare deductions, will come out of the payment. You also indicated Social Security deductions can be taken out. As a Civil Service Retirement System employee, I do not pay into Social Security. 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…
Q: I served in the Air Force from 1971 to 1977. In 1977, I joined the Air National Guard. I retired from the ANG in 1991 with 20 years of service, including the six active-duty years. In 1977, I also got a job with the federal government as a civilian employee under the Civil Service Retirement System. In 1986, I payed back my six years of active-duty military time to receive credit for them under CSRS. I am planning to retire in 2011 from the federal government with 40 years of creditable service in CSRS, including the six years bought…
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 benefits and received them beginning 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 I can fight or protest this situation? A: Apparently you are subject to the windfall elimination provision, which applies to the Social Security…
Q: When does the leave without pay affect the service computation date? A: A total of six months in a nonpay status in any calendar year is considered to be creditable service and would be treated the same for retirement purposes as if you were still on the job. Any time spent on LWOP outside that window during a calendar year would not be creditable service and, therefore, not included when determining your service computation date. For more information about how LWOP affects other benefits, go to http://opm.gov/oca/leave/html/lwop_eff.htm.
Q: I plan on retiring Dec. 3. I am a Civil Service Retirement System employee. Can I delay my lump-sum payment for unused annual leave until January 2011? A: In most cases, lump-sum payments are made at the same time that an agency closes out an employee’s file and authorizes a final check covering his last days on the payroll. You’ll have to check with your payroll office to learn when they expect that to happen.
Q: I am a Civil Service Retirement System employee, with 35 years of service and meet the age requirement to retire. My agency is offering a buyout of $25,000 if we leave by Sept. 30. I am considering this offer as I was planning on leaving Dec. 31, but because Sept. 30 is in the middle of a pay period, should I leave at the end of the pay period which would be Sept. 25 in order to get all leave I would be entitled to and when would my first pension check be for. A: Yes, it’s true that…