Denis Rhoden
ASS’T TO DIRECTOR OF RETIREES
Outlook November / December 2017
C.S.R.S.
Who is eligible for deferred retirement?
Any separated employee who is age 62 and has completed at least 5 years of civilian service providing the employee left retirement contributions in the Civil Service Retirement Fund.

When does this deferred annuity begin?
It begins on the separated employee’s 62nd birthday.

How do I apply for my deferred CSRS annuity?
60 days prior to your 62nd birthday-write or call the Office of Personnel Management (OPM), Retirement Operations Center, Boyers, PA 16017 (888) 767- 6738. OPM will send the application for deferred annuity.

Is an employee eligible for deferred annuity regardless of the reason for separation?
Yes. Providing he/she leaves the retirement contributions in the Civil Service Retirement Fund and is not convicted of certain National Security offenses.

If I die before attaining age 62, or after age 62 but before applying for annuity/ will my survivor(s) receive survivor benefits?
The only benefit payable will be your lump-sum credit in the retirement fund; monthly survivor annuity will not be payable.

How is the amount of employee’s basic annuity determined?
The amount depends primarily upon an employee’s length of service and the high-3 average salary.

How is an employee’s length of service computed?
All periods of creditable service are added together plus credit for unused sick leave. The odd days under 30 in the total are dropped, and the time (years and months) remaining is the length of service used in the annuity computation formula.

How is an employee’s “high-3” average age pay computed?
The “high-3” average salary is the highest salary obtainable by averaging the rates of basic pay in effect during any 3 consecutive years of service. (Does not have to be from January 1 to December 31.)

What is the general formula for obtaining the basic annuity?
- Take: 1½% of the high-average salary and multiply the result by 5 years of service;
- Take: 1¾% of the same high-3 average salary and multiply by years of service between 5 and 10;
- Take 2% of the same high-3 average salary and multiply by all service over 10 years;
- Add: The results of these three figures are the retiree’s basic annuity per year.

Is the general formula for computing the basic annuity used in all kinds of retirement?
It is used in computing the basic annuity in age, optional, 20 year and 25-year discontinued service annuities, and deferred retirements. It is used in disability retirements only if it produces a greater basic annuity than the guaranteed minimum.

Outlook September / October 2017
Survivor Benefit - Annuitant Dies
With regards to survivor benefits, what are the possible annuity elections?
(1) An annuity with a survivor benefit to a spouse; (2) An annuitant with a survivor benefit to a “named person having an insurable interest; (3) An annuity without a survivor benefit; and (4) An annuity to provide a former spouse or combination current/former spouse survivor benefit.

Can an employee choose which type of annuity he/she wants?
Yes. However, a married employee is automatically granted the annuity with a spousal survivor benefit, unless the spouse waives his/her right to the survivor benefit.

How much is the reduction in the retired employee’s annuity if he or she elects an annuity with a survivor benefit for his or her spouse?
Ten (10) percent of unreduced annuity for full survivor benefit and 5 percent for 25 percent survivor benefit.

How much does a surviving spouse of a deceased FERS annuitant receive in FERS survivor benefits?
For the spouse of a deceased non-disability annuitant, the full FERS survivor annuity is 50 percent of the annuitant’s annuity before it is reduced by the cost of the survivor benefit. The survivor annuity may be 25 percent of the annuitant’s unreduced annuity if the spouse agreed to that election.

For the spouse of a deceased disability annuitant, the benefit is the same as above if the disability annuitant, the benefit is the same as above if the disability annuitant died after reaching age 62. If death occurs before age 62, the amount of the survivor annuity is 50 percent (or 25 percent, if the annuitant and spouse jointly elected a partial survivor benefit) of an earned annuity computation with the time base increased by the amount of time between retirement and the annuitant’s 62nd birthday, and the average salary increased by COLAs the annuitant received.

In addition, if the surviving spouse is ineligible to receive Social Security survivor benefits he or she may be eligible to receive a special supplemental annuity until the age of 60. The amount of the supplement is the lesser of:

• The portion of the Social Security survivor benefit payable to the surviving spouse at age 60 that is attributable to FERS service; or
• The difference between the survivor annuity payable by CSRS (55% of the deceased retiree’s annuity) and the regular survivor annuity payable by FERS.

What is an annuity with a survivor benefit to a named person having an insurable interest?
In this type of annuity, the retiring employee takes a reduction in his or her annuity and names a person who has an insurable interest in his or her life to receive a survivor annuity.

Who may elect an annuity with a survivor benefit to a named person having an insurable interest?
Any employee who is in good health and not retiring for disability.

What happens when the civil service annuitant’s spouse predeceases the annuitant?
The annuitant can have his/her annuity restored to full-life rate. If there are no dependent children, health benefits coverage can be changed to a self only plan. The beneficiaries for life insurance may need to be changed. Another change which the annuitant may make is a change in federal income tax withholding. The annuitant must notify the U.S. Office of Personnel Management, Retirement Operations Center, Boyers, Pennsylvania 1017, and furnish them with his/her CSA (claim) number, Social Security number, date of birth, and a copy of the death certificate.

Outlook July / August 2017
Disability Retirement FAQ
(This article is a continuation from the May - June 2017 Issue)
I currently have unused sick leave. If my disability retirement is approved, what will happen to my sick leave balance?
CSRS employees will be given the opportunity to either use their SL or it will be added to your years of service. It is normally in the best interest of FERS employees to use their sick leave unless you have been in a LWOP status for an extended period of time. Use of sick leave after a long period of LWOP will affect your last of pay this is reported to OPM which will affect the starting date of your annuity. Example #1: You have been in a LWOP status for 6 months and have a sick leave balance of 20 hours. In this example, it would not be advisable for you to use your sick leave. Your disability annuity will be retroactive back 6 months to the last day you received pay from USPS. If you use your 20 hours of sick leave, you would lose that 6 months of back pay from your disability annuity. Example # 2: You have continued working while waiting for OPM to make a decision on your disability case and you have 1000 hours of sick leave. In this example, you would definitely want to use your sick leave. Your disability retirement annuity would begin the day after your sick leave runs out.
How long does the process take?
The application process can take up to 60 days depending on how quickly HRSSC receives SF 3112B, medical documentation, and Application for Immediate Retirement. In addition, the review/decision process takes from 4- 12 months at the Office of Personnel Management. It normally takes this long due to the large number of employees who are serviced by OPM (all Federal Employees in the country).
I have run out of sick leave and annual leave and I cannot work. Can you expedite my disability application?
No. The only cases that qualify for priority review/decision by OPM are for employees with a terminal illness and/or shortened life expectancy of one year or less. If you meet this criteria, you should submit your SF 3112!, Application for Immediate Retirement, and a statement from your doctor regarding your terminal illness/shortened life expectancy. HRSSC will then expedite your case to OPM and they will review and render a decision very quickly.
How do I start the process of a disability retirement application?
Complete the SF 3112A (Applicant’s Statement of Disability Retirement) and mail to the HR Shared Service Center
• Sign the SF 3112C (Physician’s Statement) and give that form to each doctor who will be providing medical records in support of your disability application. The doctor will need to mail the SF 3112C and the medical documentation to HRSSC as soon as possible. If your doctor does not provide the medical documentation timely, that may result in a delay in mailing your case to the Office of Personnel Management (OPM) for review and decision.
• If you are a FERS employee, you must also apply for disability benefits through Social Security.
Will my supervisor be notified that I have applied for disability retirement and who takes care of getting my supervisor statement completed?
Once you have submitted the 3112A to the HRSSC, we will notify your supervisor that you have applied and we will request completion of the SF 3112B, Supervisor Statement.
How will I know if my medical documentation arrived from my doctors?
How will I know if my medical documentation arrived from my doctors?
The best way to answer this question is for you to contact your doctor for confirmation that they have mailed the medical documentation to HRSSC.
How can 1 check on the status of my disability retirement claim?
HR Shared Service Center will monitor your disability case for receipt of the supervisor statement, medical documentation and the required forms found in your blue book (2nd mailing). We then submit the case to the Postal Service Accounting Service Center, who will add additional payroll/retirement records and forward to the Office of Personnel Management (OPM) for review and decision. After the case has been sent to OPM, we must wait for them to issue a decision letter. We will not receive any information or updates from OPM prior to receipt of the Decision Letter, and will not be able to provide you with a status update. The only information we can provide is that the case is currently under review by OPM. You will already have that information because we will notify you by mail when the case is sent to OPM.
A list of retirement and insurance booklets you may find useful is available online at www.opm.gov/retire/pubs/pami3hlets/list.asp.
Outlook May / June 2017
Am I eligible to apply for disability retirement?
FERS Employee: Yes, as long as you have worked for at least 18 months.
CSRS Employee: Yes, as long as you have worked at least 5 years.
I am eligible to retire optionally. Is there an advantage to applying for disability instead of optional retirement?
If optionally eligible CSRS employee: There is no benefit to applying for disability retirement versus optional retirement.

If optionally eligible FERS employee: FERS employees are eligible to retire when they have reached their minimum retirement age (MRA) and have worked the minimum number of years of service. The minimum retirement age (MRA) is determined by the year in which you were born. Once you have reached your MRA and have 10 years of creditable service, you are optionally eligible to retire. However, if you are less than 62 years old, your annuity will be reduced by 5% for each year that you are under age 62. MRA has no bearing on disability retirement; therefore, there would be no reduction. The chart below will help you determine your MRA.

If you were born in: Your MRA is: If you were born in: Your MRA is:
Before 1948 55 years 1965 56 years, 2 months
1948 55 years, 2 months 1966 56 years, 4months
1949 55 years, 4 months 1967 56 years, 6 months
1950 55 years, 6 months 1968 56 years, 8 months
1951 55 years, 8 months 1969 56 years, 10 months
1952 55 years, 10 months After 1969 57 years
1953 to 1964 56 years
I am currently receiving compensation from OWCP. Can I/Should I apply for disability retirement?
Yes. If your disability application is approved, OPM will give you the option to remain on OWCP or to accept compensation from OPM. If you choose to remain on OWCP but your benefits are later terminated, you can notify OPM and begin drawing your disability annuity at that time.
How much money will I receive per month?
The disability annuity estimate you received provides the best “estimate” of the monthly benefit you can expect to receive if your disability is approved.
What happens to my health and life insurance?
If you have carried life and/or health insurance through the Postal Service for the past five years of your employment, you will be able to carry it into retirement. However, if you have carried life and or health insurance for less than five years you will not be able to take this benefit into retirement. If your health insurance benefits have been terminated due to 365 days in a LWOP status, you can make a written appeal to OPM asking that they reinstate your health insurance. In most disability cases, OPM will honor your request.
Outlook March / April 2017
C.S.R.S. and F.E.R.S.
C.S.R.S.
How many types of annuities are there?
Four. (1) Annuity with survivor benefit to widow and widower; (2) Annuity without survivor benefit; (3) Annuity with survivor benefit to named person having an insurable interest; or (4) Annuity to provide a former spouse or combination current/former spouse survivor annuity.

What is an annuity without survivor benefit?
It is the annuity which is payable to the retiring employee for his/her lifetime only.

When is the survivor annuity to the widow or widower effective?
It is effective the day after the employee or retiree dies and continues until the end of the month before the one in which the widow or widower remarries before age 55 or dies. Remarriage after age 55 does not affect the survivor annuity. For remarriages occurring after January 1, 1995, the widow/widower remarries before age 55, and was married at least 30 years to the individual on whose service the survivor annuity is based, the survivor annuity will not be terminated.

How much survivor annuity would the widow or widower receive?
The widow or widower of a retired employee will generally receive 55% of the retiree’s basic annuity. (The annuitant can provide a percentage of less than 55% if agreed upon by the spouse at time of retirement).

How much is the reduction in the retired employee’s annuity if he/she accepts the annuity with survivor benefit to his/her widow or widower?
The reduction is 2 % % of the first $3,600, and 10 % of any amount over $3,600 used as a base for the survivor benefit.

F.E.R.S.
With regards to the survivor benefits, what are the possible annuity elections?
(1) An annuity with a survivor benefit to a spouse; (2) An annuitant with a survivor benefit to a “named person having an insurable interest”; (3) An annuity without a survivor benefit; and (4) An annuity to provide a former spouse or combination current/former spouse survivor benefit.

Can an employee choose which type of annuity he/she wants?
Yes. However, a married employee is automatically granted the annuity with a spousal survivor benefit, unless the spouse waives his/her right to the survivor benefit.

How much is the reduction in the retired employee’s annuity if he/she elects an annuity with a survivor benefit for his or her spouse?
Ten (10) percent of unreduced annuity for full survivor benefit and 5 percent for a 25 percent survivor benefit.

How much does a surviving spouse of a deceased FERS annuitant receive in FERS survivor benefits?
For the spouse of a deceased non-disability annuitant, the full FERS survivor annuity is 50 percent of the annuitant’s annuity before it is reduced by the cost of the survivor benefit. The survivor annuity may be 25 percent of the annuitant’s unreduced annuity if the spouse agreed to that election.

For the spouse of a deceased disability annuitant, the benefit is the same as above if the disability annuitant died after reaching age 62. If death occurs before age 62, the amount of the survivor annuitant is 50 percent (or 25 percent, if the annuitant and spouse jointly elected a partial survivor benefit) of an earned annuity computation with the time base increased by the amount of time between retirement and the annuitant’s 62nd birthday, and the average salary increased by the COLAs the annuitant received.

Outlook January / February 2017
Thrift Savings Plan (TSP)
If I retire, are there any special TSP advantages, penalties or rules?
You will have the same withdrawal choices and tax consequences as any other separated or retired employee with the same separation or retirement date and age.

If I retire can I continue to contribute to TSP?
No. Following retirement, you are not eligible to make additional contributions to or borrow money from your TSP account. You may continue to reallocate money among the TSP funds.

If I retire, can I withdraw funds from my TSP?
Yes. If you retire, you will receive extensive information regarding your TSP withdrawal options and also whether you may leave your money in TSP.

How long will it take me to get my money from TSP?
Withdrawal of funds may take at least two months following separation and after, the receipt of properly completed forms by TSP. If you have an outstanding TSP loan, this would delay any TSP withdrawal because you cannot withdraw funds from your TSP account until you have repaid your loan in full or until your loan has been declared a taxable distribution.

If I withdraw from my TSP account, will I have to pay taxes?
Yes. All persons will have to pay Federal Income Taxes on any amounts withdrawn from TSP. Those taxes are due on both withdrawn TSP contributions and TSP earnings. After all, TSP is a tax-deferred savings plan, which means you didn’t pay taxes when you contributed to your TSP account or on any earnings in the account.

Also, if you retire before the year that you reach age 55, then any amount that you withdraw from your TSP account before you reach age 59 ½ is subject to an early withdrawal penalty tax often percent. However, this penalty tax does not apply to amounts received under certain withdrawal options, such as an annuity or rollover to an Individual Retirement Arrangement (IRA).

Will I forfeit my agency automatic 1% contribution or earnings on those contributions as a FERS covered employee, or am I vested?
You will forfeit these amounts only if you have not completed a time-in-service requirement of three years or FERS employees. Once you’ve completed the three years, you are vested. All Postal Service and Federal Civilian Service counts towards vesting, not just service while you are a TSP participant.

Will I forfeit my employee contributions, or agency matching contributions, or earnings on those contributions, as a FERS covered employee, or am I vested?
As a FERS employee, you will never forfeit these amounts. You are immediately vested in your own contributions and in any earnings that accrue. You are also immediately vested in Agency Matching Contributions and any earnings that accrue.

I only have a small amount in my TSP account. Do I have any options concerning these monies?
If your vested account balance is less than $200 when you retire; the TSP will automatically send you a check for the amount in your account The check will be mailed to the address in your TSP account record. You cannot leave this money in the TSP or make any other withdrawal election.

Does my spouse have any rights concerning how I withdraw my TSP funds?
Your spouse does have certain rights as explained in TSP materials you will receive.

What happens if I have a TSP loan and I retire?
Your loan must be closed in one of the following ways within approximately 90 days of the Postal Service reporting your separation to TSP:
• You prepay your loan in full; or
• You partially prepay your loan, and you receive a taxable distribution on the reduced outstanding balance; or
• You receive a taxable distribution of the entire outstanding loan balance.
Note: TSP cannot process a withdrawal from your TSP account until your loan has been closed.

The Postal Service will report to TSP that you have ended your Postal Service employment. Then, TSP will mail you a notice with instructions. If TSP does not receive payment in full from you for your loan by the required date shown on the notice, TSP will declare a taxable distribution of your loan (this is reported to the IRS).

Outlook November / December 2016
Letter Carrier Dies
Step-by-step instructions for survivors to ensure the continuation of benefits.

The NALC Retirement Department provides advice and assistance about retirement issues to active and retired letter carriers. But this support does not end when the letter carrier dies. NALC understands that dealing with matters after someone dies is a necessary task, but often one which is hard for the bereaved to cope with. The Retirement Department stands ready to help spouses and other survivors through the steps they must take to obtain survivor benefits.

This article details the agencies and institutions that must be notified in order for survivors to receive retirement benefits.
1) Notify the U.S. Office of Personal Management (OPM):
- By writing to OPM, Retirement Operations Center, Boyers PA 16017
- Or by phoning OPM toll-free at 888-767-6738
Or, for quicker action, by providing the required information to NALC’s Retirement Department:
- By writing the NALC Director of Retired Members, 100 Indiana Ave., NW, Washington, DC 200001-2144
- Or by phoning 202-393-4695 during business hours
- Or by calling toll-free 800-424-5186 only on Monday, Wednesday, or Thursday, 10-noon and 2-4 p.m. (Eastern time).
NALC will alert OPM so that survivor benefits will commence as quickly as possible, and will send you the application for death benefits under the Federal Employees’ Group Life Insurance Program.
2) Return any uncashed annuity checks to the address on the accompanying Treasury Department envelope. If payments are being deposited through Electronic Funds Transfer directly to a bank or other financial institution, contact them with the retiree’s date of death and advise them to return any future payments to the Treasury Department.
3) Obtain enough death certificates for your needs from the mortuary (they may suggest how many).
4) Notify the retired carrier’s NALC branch.
5) If the retiree was a veteran, notify the Veterans’ Administration local office and/or the commanding officer of the local military installation.
6) Notify the retiree’s bank or other financial institutions.
7) Call the local office of the Social Security Administration or toll-free 800-772-1213. Notify insurance companies (life, health, home, automobile, etc.).
8) If the retiree had a policy with NALC’s Mutual Benefit Association, write to 100 Indiana Ave. NW, Room 510, Washington, DC 20001-2144 or call 202-638-4318. If the retiree belonged to the NALC Health Benefit Plan write 20547 Waverly Court, Ashburn, VA 20149 or call 888-636-6252.
(Note: Health benefit coverage for a surviving spouse and dependent children continues automatically if retiree had family coverage at time of death and if a monthly survivor annuity is payable).
9) To start, stop or change monthly federal or state income tax withholding or request a duplicate 1099R, call 1-888-767-6738. You will need the retiree’s CSA number and the last four digits of the Social Security number.
10) If the retiree participated in the Thrift Savings Plan, contact for Death Benefits Claims, (only) - Fax number: (703) 592-0170, Mailing address: TSP Death Benefits Processing Unit Fairfax Post Office DEDIS - P.O. Box 4450, Fairfax, VA 22038-9998. Or call the ThriftLine: 1-877-968-3778.

Outlook September / October 2016
CSRS Avoiding Delays
Your annuity claim may be delayed if the Postal Service encounters problems when reviewing your OPF or processing your application, or if OPM has problems verifying your service. It is essential, therefore, that you initiate your retirement process at least 6 weeks before your planned retirement date. Check your OPF several months before your retirement date to ensure that all your pertinent papers are ready for processing. By taking these precautions, you can avoid a delay of weeks, or even months, in receiving your annuity.
Mailing Instructions: Final Pay and Terminal Leave Payment
The Eagan ASC sends your final pay and terminal leave payment to your employing office. Therefore, make sure your employing office knows where to forward your last payroll check.
Annuity Payments
If your address changes after you submit your retirement application, check with your local personnel office staff to see if they forwarded the change to OPM. If they have not, notify OPM of your change of address in writing.
Retirement Operations Center
Office of Personnel Management
PO Box 440
Boyers, PA 16017-0440
Ensuring Receipt of Annuity Payments
If you change banks, do not close out your old bank account until you begin receiving direct deposit annuity payments at the new account. This will prevent a break in your receipt of annuity payments.
Information Assistance: Documenting CSA Number
After OPM assigns you a CSA claim number, keep a record of it in several places and tell your spouse, or at least one other person, where to find it.

Note: Since this CSA number identifies you and must be included on all correspondence with OPM, make sure your designee knows how to access it in case of emergency.

Requesting Information
After retirement, all requests for information must be addressed to OPM.
Address correspondence about retirement to:
Retirement Operations Center
Office of Personnel Management
PO Box 45
Boyers, PA 16017-0045
Outlook July / August 2016
Survivor Annuity
How many types of annuities are there?

Four: (1) Annuity with survivor benefit to widow and widower; (2) Annuity without survivor benefit; (3) Annuity with survivor benefit to named person having an insurable interest; or (4) Annuity to provide a former spouse or combination current/former spouse survivor annuity.

Can an employee choose which type of annuity he/she wants?

Yes. A married employee is automatically granted the annuity with survivor benefit to widow or widower, unless the spouse waives his/her right to the survivor benefit.

If an employee elects an annuity with survivor benefit to named person having an insurable interest, how much is the reduction in annuity?

This depends on the difference in ages between the retiring employee and the person named as survivor annuitant. See the table below:

NOTE: In order for your surviving spouse (and or other family members) to be entitled to continue enrollment in a health benefit plan following your death; a survivor annuity (even if you elect less than the maximum) must be established. Health benefit premiums for survivors are withheld from survivor annuities. If an annuity would be insufficient, OPM establishes an alternative direct-pay method to collect premiums.
Outlook May / June 2016
Amount of the Special Retirement Supplement
The special retirement supplement is an approximation of the portion of a full career Social Security benefit earned while employed under FERS.

A full Social Security benefit is estimated by OPM based upon 40 years of service. The supplement paid by OPM is a fraction of this estimated benefit equal to the total full calendar years of civilian service creditable under FERS, divided by 40. The 2006 annuity supplemental equaled approximately $30 to $35 per month per year of service.

Example:
Helen retired at age 60 with 20 years of FERS service and was eligible for the special retirement supplement.
The supplement = approximately $30 to $35 per month per year of service.
-20 years x $30 per year = $600 per month -20 years x $35 per year = $700 per month.

Federal Employees Health Benefits (FEHB)
What will happen to my health benefits?

Your current health benefits coverage will transfer into retirement provided you meet the eligibility requirements of:

(1) Retiring on an immediate annuity, and
(2) Continuous coverage in the FEHB program for the five (5) years of service immediately preceding retirement or since your first opportunity to enroll (if less than five years).

Will my health benefits costs increase if they transfer into retirement?
Your premium payment will increase to the level paid by all other federal annuitants (and federal employees) rather than receiving the more favorable Postal Service employer health benefits contribution. This means the same health plan may be noticeably more costly for an annuitant than for a Postal Service employee.

As an annuitant, you would pay for health coverage through monthly withholding from your annuity, instead of paying through biweekly withholding from your paycheck (12 payments annually instead of 26 payments annually). Of course, each payment is higher when you pay on a monthly basis.

Tax regulations do not permit you to receive the tax break as an annuitant that you receive as an employee under the pretax payment of health insurance premiums provided by the Postal Service.

What happens if I cancel my health benefits enrollment when I retire?
If you cancel your FEHB enrollment as an annuitant, you will NEVER be able to reenroll, unless you become reemployed in a position that conveys coverage, or you canceled your FEHB to enroll in a Medicare-sponsored health plan, Medicaid or TRICARE, and that coverage ends.
Outlook March / April 2016
Thrift Savings Plan (TSP)
If I retire, are there any special TSP advantages, penalties or rules?
You will have the same withdrawal choices and tax consequences as any other separated or retired employee with the same separation or retirement date and age.

If I retire, can I continue to contribute to TSP?
No. Following retirement, you are not eligible to make additional contributions to or borrow money from your TSP account. You may continue to reallocate money among the TSP funds.

If I retire, can I withdraw funds from my TSP?
Yes. If you retire you will receive extensive information regarding your TSP withdrawal options and also whether you may leave your money in TSP.

How long will it take me to get my money from TSP?
Withdrawal of funds may take at least two (2) months following separation and after the receipt of properly completed funds by TSP.

If you have an outstanding TSP loan, this would delay any TSP withdrawal because you cannot withdraw funds from your TSP account until you have repaid your loan in full or until your loan has been declared a taxable distribution.

If I withdraw money from my TSP account, will I have to pay taxes?
Yes. All persons, including those who retire, will have to pay federal income taxes on any amounts withdrawn from TSP. Those taxes are due on both withdrawn TSP contributions and TSP earnings. After all, TSP is a tax-deferred savings plan, which means you didn’t pay taxes when you contributed to your TSP account or on any earnings in the account.

Also, if you retire before the year that you reach age 55, then any amount that you withdraw from your TSP account before you reach age 59 ½ is subject to an early withdrawal penalty tax often percent (10%). However, this penalty tax does not apply to amounts received under certain withdrawal options, such as an annuity or rollover to an Individual Retirement Arrangement (IRA).

Will I forfeit my employee contributions or earnings on those contributions as a CSRS covered employee, or am I vested?
As a CSRS employee, you will never forfeit these amounts. You are immediately vested in your own contributions and in any earnings that accrue.

How does an employee apply to withdraw his or her savings from the TSP?
Upon separation, the Postal Service (or other federal agency) is required to furnish the employee a TSP Withdrawal Package with the required forms.

Outlook January / February 2016
FERS and CSRS
F.E.R.S.
Does work under CSRS count toward credit for Social Security?
Generally, no. However, employees with less than 5 years of service under CSRS who voluntarily transferred to FERS in 1987 or who are transferred to FERS (because they separated from federal service for more than a year) will be given Social Security credit for their years under CSRS. This is the case because the CSRS service of such employees is converted into FERS service at the time of the transfer.

Does military service count towards Social Security eligibility?
Yes, provided it was performed after 1956.

By how much is a worker’s retirement benefit reduced if the worker retires before the Full Retirement Age (FRA)?
If benefits are started early, they are reduced five-ninths of one percent for each full month before the worker’s “full” retirement age. For example, if your full retirement age is 65 and you sign up for Social Security when you’re 64, you will receive 931/3 percent of your full benefit. At age 62, you would get 80 percent. (Note: the reduction will be greater in future years as the full retirement age increases.)

C.S.R.S.
Is extra credit allowed for unused sick leave?
Yes, where the employee retires on an immediate annuity or dies. The time represented by the unused sick leave is added to the employee’s actual service used in computing annuity.

Is deposit required to receive credit for unused sick leave?
No.

May an employee receive credit for service with the National Guard?
Only when the organization is activated in the U.S. Army or Air Force.

Who is eligible for deferred retirement?
Any separated employee who is age 62 and has completed at least 5 years of civilian service providing the employee left retirement contributions in the Civil Service Retirement Fund.

When does this deferred annuity begin?
It begins on the separated employee’s 62nd birthday.

How do I apply for my deferred CSRS annuity?
60 days prior to your 62nd birthday, write or call the Office of Personnel Management (OPM), Retirement Operations Center, Boyers, PA 16017 - tel: (888) 767-6738. OPM will send the application for deferred annuity.

If I die before attaining age 62, or after age 62 but before applying for annuity, will my survivor(s) receive survivor benefits?
The only benefit payable will be your lump-sum credit in the retirement fund; monthly survivor annuity will not be payable.

Outlook November / December 2015
FERS and CSRS
FERS
When can an employee begin receiving Social Security retirement benefits?
Employees with a sufficient number of credits under Social Security may retire as early as age 62 with permanently reduced benefits or between the ages of 65 and 67 depending on the year of their birth, with unreduced benefits. See the following table:
Social Security Retirement
Full Retirement Age For Retired Worker & Spouse Benefits
Year of Birth
65 Before 1938
65 and 2 months 1938
65 and 4 months 1939
65 and 6 months 1940
65 and 8 months 1941
65 and 10 months 1942
66 1943-1954
66 and 2 months 1955
66 and 4 months 1956
66 and 6 months 1957
66 and 8 months 1958
66 and 10 months 1959
67 1960 and after
Prior to 1983, all workers covered by Social Security could retire with unreduced benefits at age 65, but Congress mandated a gradual increase in the Full Retirement Age to age 67 in order to reduce the cost of Social Security benefits and in recognition of the increasing ability of older Americans to productively work past age 65.

Although the Full Retirement Age is greater for all workers born after 1937 than for those born in 1937 or earlier, such workers will still be able to retire with reduced benefits at age 62.

By how much is a worker’s retirement benefit reduced if the worker retires before the Full Retirement Age (FRA)?

If benefits are started early, they are reduced five-ninths of one percent for each full month before the worker’s “full” retirement age. For example, if your full retirement age is 65 and you sign up for Social Security when you’re 64, you will receive 93 1/3 percent of your full benefit.

At age 62, you would get 80 percent. (Note: the reduction will be greater in future years as the full retirement age increases.)

Does a worker lose retirement benefits by retiring early?

No. On average, the reduction in benefits suffered by workers who retire early is set so that over their life expectancy they receive the same amount of money they would have received if they had retired at their Full Retirement Age with unreduced benefits. Thus, the reduction in monthly benefits associated with early retirement will, on average, offset the increase in benefits associated with a longer period of retirement.

CSRS
What will happen to my health benefits?

Your current health benefits coverage will transfer into retirement provided you meet the eligibility requirements of:
(1) Retiring on an immediate annuity, and
(2) Continuous coverage in the FEHB program for the five (5) years of service immediately preceding retirement or since your first opportunity to enroll (if less than five years).

What will happen to my health benefits if I don’t meet the eligibility requirements described in the preceding question?

If you do not qualify under the eligibility requirements to transfer your health benefits into retirement as described in the preceding answer, OPM has the authority to grant waivers to employees who fail to satisfy the five-year or first opportunity requirement due to exceptional circumstances. If you request a waiver, you must provide OPM with evidence that:
• You had intended to have FEHB coverage as a retiree;
• The circumstances that prevented you from meeting the 5-year or first op-
portunity requirement were essentially outside your control; and
• You acted reasonably to protect your right to continue FEHB coverage into
retirement. (This includes reading and acting on information provided and
requesting information if none is given automatically.)

If OPM does not approve your waiver request, you have two options, as follows:
• Convert to a non-group contract (individual policy) with the carrier of the
plan you are enrolled in at the time of your separation.
• Elect 18 months of coverage under the Temporary Continuation of Coverage
(TCC) provisions of the FEHB Program.
The HR Shared Service Center will notify you that your group health insurance coverage will terminate and provide information about continuing your health insurance coverage beyond the 31-day temporary extension.

Will my health benefits costs increase if they transfer into retirement?

Your premium payment will increase to the level paid by all other federal annuitants (and federal employees) rather than receiving the more favorable Postal Service employer health benefits contribution. This means the same health plan may be noticeably more costly for an annuitant than for a Postal Service employee.

As an annuitant, you would pay for health coverage through monthly withholding from your annuity, instead of paying through biweekly withholding from your paycheck (12 payments annually instead of 26 payments annually). Of course, each payment is higher when you pay on a monthly basis.

Tax regulations do not permit you to receive the tax break as an annuitant that you receive as an employee under the pretax payment of health insurance premiums provided by the Postal Service.

Will coverage I have under TRICARE/CHAMPUS count toward the FEHB five (5) year or first opportunity requirement?

Yes, as long as you are covered under an FEHB enrollment at the time of retirerfient. In addition, you must have enrolled in the FEHB program within 60 days after you lost coverage under TRICARE/CHAMPUS for it to be considered part of the continuous FEHB coverage. CHAMPUS is the former health care program established to provide health coverage for active duty family members and retirees and their family members. TRICARE replaced CHAMPUS in 1994. Benefits covered under CHAMPUS are now covered under TRICARE Standard.

What happens if I cancel my health benefits enrollment when I retire?

If you cancel your FEHB enrollment as an annuitant, you will never be able to reenroll, unless you become reemployed in a position that conveys coverage, or you cancelled your FEHB to enroll in a Medicare-sponsored health plan, Medicaid or TRICARE, and that coverage ends.

If I cancel my FEHB enrollment to be under my spouse’s FEHB enrollment, will be able to re¬enroll under my own coverage at a later date?

Yes. As long as you are continuously covered under an FEHB enrollment, you remain eligible to make any of the same enrollment elections/changes that an active employee would be eligible to make.

Outlook September / October 2015
CSRS and FERS
CSRS
If I die before attaining age 62, but before applying for annuity, will my survivor(s) receive survivor benefits?

The only benefit payable will be your lump-sum credit in the retirement fund; monthly survivor annuity will not be payable.

How many types of annuities are there?

Four. (1) Annuity with survivor benefit to widow or widower; (2) Annuity without survivor benefit; (3) Annuity with survivor benefit to named person having an insurable interest; or (4) Annuity to provide a former spouse or combination current/former spouse survivor annuity.

Can an employee choose which type of annuity he/she wants?

Yes. A married employee is automatically granted the annuity with survivor benefit to widow or widower, unless the spouse waives his/her right to the survivor benefit.

What is an annuity without survivor benefit?

It is annuity which is payable to the retiring employee for his/her lifetime only.

How much survivor annuity would the widow or widower receive?

The widow or widower of a retired employee will generally receive 55% of the retiree’s basic annuity. (The annuitant can provide a percentage less than 55% if agreed upon by the spouse at time of retirement).

How much is the reduction in the retired employee’s annuity if he/she accepts the annuity with survivor benefit to his/her widow or widower?

The reduction is 2 1/2 % of the first $3,600, and 10 % of any amount over $3,600 used as a base for the survivor benefit.

FERS
How is the PIA formula, adjusted for affected retirees who have fewer than 30 years of substantial earnings in Social Security employment, and who are therefore subject to the Windfall Elimination Provision rule?

The percentage used in the first tier of the PIA calculation will be reduced from 90 percent to between 85 percent and 40 percent depending on the number of years the retiree earned substantial wages in Social Security employment;

PIA Reduction Schedule
Years of Substantial Social Security Earnings
Percentage Used in 1st Tier of PIA
30 or more
90% (No reduction)
29
85%
28
80%
27
75%
26
70%
25
65%
24
60%
23
55%
22
50%
21
45%
20 or fewer
40%
What proof of eligibility does a person need to apply for Social Security retirement benefits?

The following materials may be required:
* The worker’s Social Security card;
* Proof of the worker’s age (e.g., certified copy of birth certificate);
* A marriage certificate if one is applying for spousal benefits; also, have
spouse’s SSN and date of birth;
* Children’s birth certificates if one is applying for dependent benefits;
* The worker’s most recent W-2 form, or tax return if self-employed; and
Military discharge papers if the worker had military service.

This is only a partial list to help the applicant get prepared. The applicant will be advised if other documents are needed.

What documentation does a person need to apply for Social Security survivor benefits?

* Proof of former worker’s death;
* Original or certified copy of marriage certificate if one is applying for widow’s
or widower’s benefits;
* Original or certified copy of birth certificates of the worker’s children if one
is applying for children’s survivor benefits; and
* Proof that children or dependent parents were receiving at least half their
support from the deceased worker.

Applicant will be advised of any other needed documentation.

Outlook July / August 2015
FERS and CSRS
FERS
How much is the reduction in the retired employee’s annuity if he or she elects an annuity with a survivor benefit for his or her spouse?

Ten (10) percent of unreduced annuity for full survivor benefit and 5 percent for a 25 percent survivor benefit.

How much does a surviving spouse of a deceased FERS annuitant receive in FERS survivor benefits?

For the spouse of a deceased non-disability annuitant, the full FERS survivor annuity is 50 percent of the annuitant’s annuity before it is reduced by the cost of the survivor benefit. The survivor annuity may be 25 percent of the annuitant’s unreduced annuity if the spouse agreed to that election.

For the spouse of a deceased disability annuitant, the benefit is the same as above if the disability annuitant died after reaching age 62. If death occurs before age 62, the amount of the survivor annuity is 50 percent (or 25 percent, if the annuitant and spouse jointly elected a partial survivor benefit) of an earned annuity computation with the time base increased by the amount of time between retirement and the annuitant’s 62nd birthday, and the average salary increased by the COLAs the annuitant received.

In addition, if the surviving spouse is ineligible to receive Social Security survivor benefits he or she may be eligible to receive a special supplemental annuity until the age of 60. The amount of the supplement is the lesser of:
* The portion of the Social Security survivor benefit payable to the surviving spouse at age 60 that is attributable to FERS service; or
* The difference between the survivor annuity payable by CSRS (55% of the deceased retiree’s annuity) and the regular survivor annuity payable by FERS.

What is an annuity with a survivor benefit to a named person having an insurable interest?

In this type of annuity, the retiring employee takes a reduction in his or her annuity and names a person who has an insurable interest in his or her life to receive a survivor annuity.

Who may elect an annuity with a survivor benefit to a named person having an insurable interest?

Any employee who is in good health and not retiring for disability.

Can an employee choose which type of annuity he/she wants?

Yes. However, a married employee is automatically granted the annuity with a spousal survivor benefit, unless the spouse waives his/her right to the survivor benefit.

CSRS
How much money can I expect to receive in retirement on a monthly basis?

You will receive an annuity estimate that will provide you an estimated amount as of the date of your retirement. OPM will provide you the final annuity amount upon adjudication of your retirement.

When will my annuity start?

If you retire on the first three days or very last day of the month your annuity will begin on the following day. IF you retire from the fourth of the month or beyond your annuity will begin first day of the month after the effective date of retirement.

When do I get my first annuity payment?

In most cases, it takes about six weeks. You will receive a letter from OPM of the actual amount of what your interim payment will be until final adjudication.

What is an “interim” payment?

If your entitlement to annuity is clear, OPM authorizes interim annuity payments to provide you with an income until your claim is finalized. Interim annuity payments are usually about 85 percent of your estimated monthly payment and begin within 30 days after OPM receives your retirement package from Eagan ASC.

How can I get credit for time worked in a position for which no retirement contributions were deducted from my pay?

CSRS/CSRS Offset Covered Employees: If the service was performed before October 1, 1982, it is creditable in full toward retirement eligibility and in computing your annuity if you make a deposit. However, if you don’t make a deposit for this service, your annuity will be reduced by ten percent (10%) of the amount of the unpaid deposit, plus interest. If the service was performed on or after October 1, 1982, it will be used to determine retirement eligibility, but is not creditable for annuity computation purposed unless you make a deposit, with interest, for this service.

Will my Social Security benefit be reduced because I receive a CSRS annuity?

Your Social Security benefit may be reduced under the Windfall Elimination Provision (WEP). WEP lowers the percentages used to compute benefits for all workers who have less than 30 years of Social Security covered employment and who have earned an annuity from employment not covered by Social Security, such as a CSRS annuity. The Social Security Administration publishes information on this provision on its website: http://www.ssa.gov/gpo-wep/

Outlook May / June 2015
Things You Should Know: CSRS and FERS
Will my Social Security benefit be reduced because I receive CSRS annuity?

Your Social Security benefit may be reduced under the Windfall Elimination Provision (WEP). WEP lowers the percentages used to compute benefits for all workers who have less than 30 years of Social Security-covered employment and who have earned an annuity from employment not covered by Social Security such as a CSRS annuity. The Social Security Administration publishes information on this provision on its website: http://www.ssa.gov/gpo-wep/

What happens if I cancel my health benefits when I retire?

If you cancel your FEHB enrollment as an annuitant, you will NEVER be able to reenroll, unless you become reemployed in a position that conveys coverage, or you cancelled your FEHB to enroll in a Medicare-sponsored health plan, Medicaid or TRICARE, and that coverage ends.

If I retire from the Postal Service and have earned and unused annual leave will I be paid holiday leave for any holidays which occur after my separation date but before my annual leave would be exhausted?

Yes. Annual leave is spread over the appropriate number of days following your separation date and extended one day for each postal holiday which occurs during that time period. For example, if you have 160 hours of earned and unused annual leave and two holidays would occur in the four weeks (40 hours per week) after the date of your separation, you would receive terminal leave pay for 176 hours (160 hours of earned and unused annual leave plus 16 hours of holiday leave).

When should I make my Post 1956 military deposit?

Completed deposits plus applicable interest are required before retirement; however, you may initiate this payment while completing the retirement application package. The payment is acknowledged and full credit is allowed.

If you currently have a military deposit in progress through payroll deductions or periodic lump sum payments, contact the HRSSC at 1-877-477-3273, option 5, TDD/TTY 1-866-260-7507 to determine the remaining balance of your military deposit. For more information related to Post-1956 military deposits, access the Retirement Seminar Online at www.liteblue.usps.gov. My HR tab, and enter “Retirement” in the search MY HR box.

Can I cancel an application I submitted for disability retirement and retire optionally now as I meet the eligibility requirements?

Yes, an application for disability retirement may be withdrawn at any time prior to approval from OPM. Also, applications may be submitted for more than one retirement for which you qualify (discontinued service, MRA, etc.), and OPM will review each separately. However, if you file an application for an immediate retirement after filing for disability it will stop the disability retirement process, it is better to file the optional retirement paperwork first then submit the disability retirement afterwards. You have up to 365 days after separation to file for a disability retirement.




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