More 2012 benefits changes explained


In my Jan. 9 column, I wrote about 2012 changes affecting employees’ pay, retirees’ cost-of-living adjustments and Social Security benefits. In this column, I’ll describe other changes.


At age 65, you’re eligible for Medicare Part A (hospital insurance), which is free because you have already paid for that benefit through payroll deductions. You’re also eligible for Medicare Part B (medical insurance), which isn’t free. If you decide to enroll in Medicare Part B, you have to pay the premiums.

If last year’s individual taxable income was $85,000 or less, your 2012 monthly premium is $99.90, an increase of $3.50 for those whose rates, along with COLAs, had not gone up for two years, and a decrease of $15.50 for those who were paying higher rates last year.

Following are Part B monthly premiums for those with higher individual taxable income last year (the dollar thresholds are double for those who filed joint tax returns):

• $139.90, up from $134.90 in 2011, if income was $85,001 to $107,000.

• $199.80, up from $192.70, if income was $107,001 to $160,000.

• $259.70, up from $250.50, if income was $160,001 to $213,000.

• $319.70, up from $308.20, if income was greater than $213,000.

Thrift Savings Plan

Employees’ 2012 elective deferral limit for TSP contributions is $17,000 of basic pay, up from $16,500 in 2011.

Unchanged, however, is the additional tax-deferred “catch-up” contribution of up to $5,500 you can make if you are age 50 or older.

If you are planning to take out a TSP loan in 2012, the interest rate is determined at the time your loan application is processed. As of Jan. 3, the interest rate is 1.5 percent.

Interest on TSP annuities varies monthly. If you purchased an annuity in January, the interest rate you’ll receive is 2.15 percent, down from 2.25 percent for annuities purchased in December. Current interest rates are posted on the Thrift Savings Plan website.

Survivor benefits

Death benefit rules differ under the Civil Service Retirement System and Federal Employees Retirement System.

Under CSRS, there is no specific death benefit; however, if you die while still employed, your widow or widower is entitled to a survivor annuity.

If you have been an employee covered under FERS for at least 18 months, your surviving spouse would receive a lump-sum payment of $30,792.98, up from $29,722.95 in 2011, plus a lump-sum payment equal to the greater of half of your annual basic pay or half of your highest three consecutive years of average salary (your high-3), plus any Social Security benefit to which he or she may be entitled.

If you had 10 or more years of service, your surviving spouse would also receive a survivor annuity equal to half of what your basic annuity would have been based on your years of service, but without any age-based reduction if you were under age 62 when you died.

There is also a special death benefit for public safety officers. In 2012, it is $323,035, up from $318,111 in 2011. This benefit is payable to the survivors of officers who died as the result of a personal, traumatic injury involving external force and sustained in the line of duty.

In 2012, the children’s survivor annuity rate when one parent is still alive is $487 per child, up from $469 in 2011, or $1,460 divided by the number of children, up from $1,409. If there is no surviving parent, the rates are $584 and $1,762, up from $563 and $1,619.

To be eligible for these benefits, a child must be unmarried and under age 18. The age limit is increased to 22 if the child is attending school full-time, and there is no age limit if the child is disabled under age 18, incapable of self support and unmarried.


About Author

Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to

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