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…
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: 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: 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.
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…
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…