VERA

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Q. I will have 30 years in service on Aug. 8, 2018. I will apply for retirement under the Voluntary Early Retirement Authority (VERA) at that time and see where the dart hits the dartboard. I will be 49 years old (plus a few days) — young enough to perhaps move onto something else. Is there anything I should know?

A. You can’t apply for a VERA. You can only agree to retire if your agency is authorized to offer a VERA and your position is included in that offer.

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

12 Comments

  1. I’m retiring under VERA in Jan, just three months short of my MRA. Things I’ve learned that you may want to consider:
    – The VERA offers that I have seen have specified a minimum age of 50.
    – If you’re FERS, you won’t get your Special Retirement Supplement until you reach you MRA, not matter when you retire.
    – You can’t withdraw from your TSP without penalty until you’re 55.

  2. Odd they would specify a minimum retirement age of 50.

    OPM states that to be eligible to retire under VERA one must have either:

    Minimum 20 years credible Federal Civilian Service (including military buy back) and be at least 50 years old or;

    Minimum 25 years credible Federal Civilian Service (including military buy back) at any age (can be under 50 as long as you have 25 years).

    https://www.opm.gov/retirement-services/fers-information/types-of-retirement/#url=Eligibility2

    • I’ll hit 30 years myself (counting military buyback) in 2 1/2 years when I will be 49 as well. But my agency is NOT offering a VERA and not foreseeing any RIF’s, so I’ll have to wait till my MRA in 9+ years when I will have 37+ years should I choose to go.

      Unless your agency is offering a VERA or you are facing a RIF or are serving in law enforcement, firefighting or air traffic control you won’t be able to retire till you hit your MRA even though you have over 30 years.

      With the incoming Trump administration we all may see many more agencies offering VERAs/buyouts and facing RIFs due to promised cuts.

      A couple of things to keep in mind if you accept an early retirement offer. You won’t be able to begin IRS penalty free withdrawals from your TSP till you hit age 55. You also won’t be able to directly contribute to it if you get a job in the private sector. You can still manage your TSP and move funds around within the TSP however.

      You’ll have to set up a 401k account with your new employer or set up an independent IRA account. You can roll that 401k or IRA into your TSP when you leave that job or also roll your TSP into your 401k if you choose. Applicable transfer/roll fees may apply.

      Second thing to keep in mind if you are offered and accept early retirement, if you plan on also applying for the FERS Special Retirement Supplement (SRS) you will have to wait till you reach your MRA before you are eligible to receive it.

      Eligibility for the FERS SRS expires when you reach 62, regardless of whether you apply for early Social Security or not.

      There is also an earnings test/limit to the SRS similar to early social security. If you plan on working while receiving both FERS and the FERS SRS, if you make over $15K/year in wages from employment (either self employed or working for somebody) your SRS will be reduced by $1 for every $2 you are over the $15K limit. If you make over $45K/year in wages your SRS could reduced to zero. There is no earnings limit/Test for your regular FERS annuity or your TSP withdraws when you are old enough.

      • Murphy’s Law being what it is, I’m not betting on there being a VERA any time soon. I’m also betting there [will] be a RIF before there is talk of a VERA. As long as one of them happens [before] I turn 57, I’ll be happy.

        • Darren – yes you are covered for early retirement either way (VERA or RIF) due to your having over 25 years of service. If your position is being RIF’d/eliminated and your agency does NOT have another job they can offer you that is within two pay levels of your current your pay grade, is within your commuting area AND THAT YOU ARE QUALIFIED FOR, then you can take early retirement.

          If you agency DOES have another job they can offer you that meets the above 3 conditions and you refuse the offer, you will not be eligible for early retirement and your separation will be considered a resignation. However if there are RIF’s in your area, more likely than not your agency will NOT have another job to offer you.

          Usually if RIF’s are coming, the agency will also seek at least a targeted VERA to cover only those areas where RIF’s or facility/base closings are going to occur to hopefully entice enough of those eligible for early retirement/regular retirement to retire and limit the numbers of workers they have to process for termination of employment!

          • David, thank you for your reply.

            I understand the RIF process. If my position is on the list and there’s nowhere for me to move laterally, then it’s “Pack your stuff!” with no questions asked.

            It’s the VERA that confounds me; and I’ve addressed this with Reg also.

            Using my SCD (Service Computation Date) I will have 30 years Federal service @ age 49, on 8AUG2018.
            [Somewhere] I read that in the absence of a RIF, the earliest I could voluntarily retire [at that point] would be [31DEC2018].

            Somewhere else, I read that in the absence of a RIF or my ineligibility for a VERA; which you addressed on 17DEC16; the earliest age I could [voluntarily] retire was 57 (My MRA). That’s 10 years away and I have other family that are [also] getting on in age; waiting for me to retire, so we can change locale before age becomes a hindrance (No so much [for me] but [for them]). There are also personal concerns/considerations that are factors in my/our wanting to know the earliest/how I can move on.

      • Another important thing to keep in mind if you are a FERS retiree who is under 62 – you will NOT receive ANY annual Cost of Living increases for your FERS retirement until you reach 62 years of age. It doesn’t matter if you took an early retirement or retired regularly between your MRA and age 62.

        Example, you take early retirement at age 50 with 30 years of service. Your high 3 is $50K/year, so your gross FERS retirement annuity would be $15K/year (before taxes, FEHB premium deductions, etc).

        That same $15K/year amount will remain unchanged till age 62, all the while your taxes and your FEHB premiums will still increase year over year. Your take home FERS annuity amount will shrink considerably over the next 12 years till you start getting annual cost of living increases when you hit 62.

        • I already know that whenever, or however I can leave Federal service, I will not be able to do nothing. I’ll have to get another job after I leave; maybe [two]. (Sigh) /:-\ since my high 3 is considerably less than $50K/yr. and the resulting figures would also be considerably less.

  3. The bad thing is the FER’s retirement system was billed by Ronald Reagan as a way workers could take their retirement benefit with them. Sadly this is only partially true. If you take a deferment your “banked” sick leave does not count, you lose it in its entirety, the health care option is null and void and you cannot carry over the life insurance election either. You will also forgoe the small yearly increase retirees get. Those are pretty stiff penalties for just deferring your retirement with 30 years vested. The benefit of possibly working on a second career outweigh any further increases in the pathetic FERS system though but make sure you know what your getting into.

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