Browsing: Thrift Savings Plan

Q. I was checking for a friend who quit about four years ago. He took out his FERS and Thrift Savings Plan money. Can he pay back his FERS so he can receive a pension? He had about 14 to 15 years in. A. He can only redeposit the refund of his FERS contributions if he returns to work in a position that confers FERS coverage.

Q. When do retirees receive the cumulative retirement amount reflected in block 19 of their leave and earnings statement, and in what increments? Isn’t this in addition to the annuity and Thrift Savings Plan amounts retirees will receive? A. The figure you see on your pay slip is the cumulative amount you have contributed to the retirement system. At retirement, a portion of that amount and the government’s contribution will be returned to you in your monthly annuity payment. To find out the proportions of each and how the federal tax code applies to them, go to www.irs.gov/pub/irs-pdf/p721.pdf. FYI, the…

Q. My service date is June 22, 1987, giving me 25 years of government service. I am under FERS; however, I am 43. If I take the early out my agency is offering, will my pension be penalized because I am under the age of retirement? Would my TSP lose value if I leave early? Would my monthly annuity be reduced under FERS? Would the IRS apply the 10 percent penalty tax because I have not reached the appropriate age to begin my withdrawals? Or does this not apply under the early out? A. The age penalty on a FERS…

Q. I have been contributing to the voluntary contributions program for many years. I understand that when I retire, I can move the interest earnings into my Thrift Savings Plan account and then the principal can be taken out as either a cash payment or an annuity. However, I was informed that the cash payment or annuity is an either/or option and that I can’t designate 50 percent for an annuity and 50 percent for a cash payment. Is this correct? A. Yes.

Q.  If  my position is eliminated, when am I eligible to receive any of my retirement benefits?  I’m almost 48 with a little over 24 years of federal service and I’m under FERS.  Also, what kind of penalties would I incur by withdrawing funds from my TSP accounts? A.  Because you would not meet the age and service requirements for early retirement, your only immediate benefit would be severance pay. If you left your contributions in the retirement fund, you would be eligible for a deferred annuity at age 60. If you are covered under the Federal Employees’ Group Life Insurance program, you…

Q: I read on Fed Weekly that some congressional discussions occurred on the subject of allowing federal workers to transfer all or part of their unused sick and annual leave into their Thrift Savings Plan accounts. Are there any discussions on this topic and if so, do you know the status and if and when this would be implemented? A: While there may have been discussions, none of them have resulted in a legislative proposal being introduced in either chamber of Congress.

Q: I will begin my first federal job soon under FERS. I turned 60 about one month ago. Must I work until age 65 to be eligible to receive Social Security or Thrift Savings Plan payments? I will have approximately four years and nine months of creditable service. A: To be eligible for a FERS annuity, you would need to have five years of creditable service and be at least age 62. To receive a Social Security benefit, you would need to have 40 credits, which equals 10 years of contributions to Social Security. Because you will have reached your full retirement age at…

Q: For those covered under the law enforcement provision of the Federal Employees Retirement System, is the Social Security earnings test applied toward funds received from their Thrift Savings Plan if those amounts exceed the earnings test for the special law enforcement officer/firefighter Social Security supplement after their minimum retirement age? A: No. The Social Security earnings test only applies to earnings from wages or self-employment.

Q: I understand that a military deposit has an effect on a person’s service computation date, Thrift Savings Plan funds and leave issues, but does it have any bearing on a new hire’s employment status? To clarify, will it change a person from “career conditional” to “career” if they have more than three years of military service? A: Making a deposit for active-duty service in the armed forces has no effect on a new hire’s employment status. As a rule, he must complete a probationary period and have three years of substantially continuous service to receive a career appointment.

1 2