Q: There are several of us around the office who are close to retirement (i.e., the next three or four years), and we’ve heard rumors that lump-sum settlements will change starting in 2013 and that the calculation will result in reduced lump-sum payment amounts. Are there any changes coming in 2012 and beyond that will affect our lump-sum payments? When I go to my Fidelity website and look at my projected lump-sum payments in 2012, 2013 and 2014, I don’t see any reductions. I’m wondering whether it has something to do with taxes changing on the lump-sum amounts starting in…
Author Reg Jones
Reg Jones
Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to fedexperts@federaltimes.com.
Q: My husband is retiring with 40 years in the Civil Service Retirement System. We chose a survivor annuity. At age 62, I am eligible for a reduced Social Security benefit on my own earnings. If he dies, is my CSRS survivor annuity affected by my Social Security benefit, or vice versa? A: As long as you aren’t receiving an earned annuity from a retirement system where you didn’t pay Social Security taxes, neither your CSRS survivor annuity nor your earned Social Security benefit will be affected.
Q: I am helping with my sister’s income taxes. On her 1099-R, Box 2A, the taxable amount is unknown. I don’t know how to report whether her survival annuity is taxable or nontaxable. A: While most of her annuity will be taxable, a portion will not. To find out how much of it will be tax-free, download a copy of IRS Publication 721, Tax Guide to U.S. Civil Service Retirement Benefits.
Q: Can my time as a nonappropriated fund employee be used toward retirement now that I work in a GS position? I worked twice as a NAF employee with a break in service, and I have been trying to get credit for that time. I received an e-mail today saying that because there was a service break of more than three days, my time will not count. A: Your agency is correct. Your NAF time isn’t creditable if you had a break in service of more than three calendar days.
Q: My wife is a government employee who was reinstated from former government service (she resigned in 1993). She entered government service in 1980 and was under the old retirement service. She resigned to have a child in 1984 and withdrew her retirement. She was reinstated in 1986 and came under the new retirement system. She again resigned and was reinstated in 2009. She has more than 13 years of government service. Can she pay back the retirement she received plus contributions she would have made over the years to fall back into the old retirement system? A: She may…
Q: I understand the federal government is beginning to consider offering early outs. Can you confirm this? A: No.
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…
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…