DODDSEurope FERS Retirement Briefing

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DODDS-EuropeFERSRetirement Briefing

• Federal Employee
• Retirement System (FERS)

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WHO IS COVERED BY FERS?

• EMPLOYEES WHO
• Were hired on or after 1 January 1984
• Were hired after a break in service of over 1
  year (365 days) with less than 5 years of prior
  creditable CSRS service at date of last
  separation
• Elected FERS coverage during transfer
  opportunities
• Are excluded from CSRS by law and regulation
• Were rehired in a covered position after a
  separation from a FERS position

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Types of Retirement Under FERS

• Voluntary/Optional Retirement
• MRA 10
• Voluntary Early Retirement
• Discontinued Service Retirement
• Deferred Retirement
• Disability Retirement

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GENERAL REQUIREMENTS

• Minimum 5 years civilian service with the federal
  government (except 18 months for disability)
• Employed in FERS position on last day of service
  being used to establish retirement eligibility

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FERSAGE AND SERVICE REQUIREMENTS FOR ANNUITIES

• RETIREMENT TYPES AGE YEARS OF SERVICE
• 1. VOLUNTARY MRA 30
• IMMEDIATE 60 20
• NO AGE REDUCTION 62 5
• 2. MRA 10 MRA 10-29
• 3. INVOLUNTARY 50 20
• VOLUNTARY (EARLY OUT) ANY 25
• 4. DEFERRED 62 5
• MRA 10
• 5. DISABILITY ANY 18 MONTHS
• RECEIPT OF ANNUITY MAY BE POSTPONED TO ANY
  SPECIFIED DATE THROUGH 62ND BIRTHDAY TO ELIMINATE
  (OR DECREASE) THE REDUCTION FOR AGE
• REDUCTION IS 5 FOR EACH YEAR THE EMPLOYEE IS
  UNDER AGE 62

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MINIMUM RETIREMENT AGE SCHEDULEFOR VOLUNTARY
RETIREMENTS OTHER THAN EARLY OUT

• If you were born
• Before 1948.......................................
  ......................
• In 1948
• 1949
• 1950
• 1951
• 1952
• 1953 to 1964
• 1965
• 1966
• 1967
• 1968
• 1969
• After 1969

• Your MRA is
• 55 Years
• 55 yrs, 2 mths
• 4
• 6
• 8
• 10
• 56 Years
• 56 yrs, 2 mths
• 4
• 6
• 8
• 10
• 57 Years

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CREDITABLE SERVICE FOR RETIREMENT PURPOSES

• FERS Credit all civilian service
• Exceptions Non deduction service performed
  on/after 01 Jan 1989
• Credit all active duty military service only
  after post-56 deposit has been made
• Exception Retired Military

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FERSYour Choices Concerning Deposit

• Before 1-1-89 Not paying deposit The deposit
  service cannot be used to determine your
  eligibility for retirement nor
• On or After No choices can it be used in
  determining
• 1-1-89 the length of service for
  annuity computation purposes
• Before 1-1-89 Paying the deposit You will receive
  an annuity based on all of your
  creditable civilian service

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FERS - UNUSED SICK LEAVE

• 1. For individual mandatorily covered by FERS
• No credit for any unused sick leave.
• 2. For an employee who has transferred to FERS
  with a civil service component, the amount of
  sick leave credited is the Lesser of
• (a) sick leave balance on date of transfer or
• (b) sick leave balance on date of retirement

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General Formulas for Calculating FERS Annuity

• If you are 62 with 20 or more Years of Service
  use the following formula
• 1.1 x average salary (Hi-3) x Years of Service
• If you are under or over 62 with less than 20
  Years of Service use the following formula
• 1 x average salary (Hi-3) x Years of Service
• Plus Annuity Supplement, where applicable

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• FERS Computation (Example)
• Age 55
• Average High-3 50,000
• Total of service 20 years
• FERS Formula
• 1 x 50,000 x 20 10,000
• Annual annuity
• 10,000-3,500 6,500 Annual reduced annuity

62-557 years 7 x 5 reduction 35
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Survivor ElectionsFERS

• Maximum Survivor Benefits
• 50 of Full Annuity
• Partial Survivor Annuity 25 of Full Annuity
• Need consent of spouse
• No Survivor Benefit
• Need consent of spouse

Assume your basic annuity is 6,000 10 x 6,000
600 Your annuity after reduction 6,000
600 5,400 Survivors Annuity 50 x
6,000 3,000
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Survivor BenefitsWill your spouse need continued
FEHB coverage in the event of your death?
No Survivor Benefit No Health InsuranceEven
the Minimum Survivor Benefit Election will permit
the current spouse to continue FEHB coverage.
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WHEN DOES MY ANNUITY BEGIN?

• A FERS annuity always starts the following month.
• Example If your retirement date is 1 June or
  15 June, your annuity will start 1 July.
• Disability Retirement begins, at the employees
  option, on the date after (1) separation from
  service or (2) pay ceases and the employee meets
  the requirements for a disability annuity.
• Unless otherwise requested, OPM will begin a
  Disability annuity under option 2 because, under
  most circumstances, it will be to the employees
  advantage to do so.

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FERS ANNUITY SUPPLEMENT

• PURPOSE To substitute for Social Security until
  age 62
• BASIS An estimate of the Social Security earned
  during FERS service.
• ELIGIBILITY At least one calendar year of FERS
  service.
• Annuity supplement paid immediately to voluntary
  retirements with
• 1. MRA and 30 years of service
• 2. Age 60 with 20 years of service

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FERS ANNUITY SUPPLEMENT (CONT)

• Annuity Supplement paid at MRA (age 55-57)
• 1. Early Out Retirements
• 2. Discontinued Service retirements
• Annuity supplement is payable only until the
  month prior to the one in which the retiree
  reaches age 62.
• The following retirees are not entitled to the
  Annuity Supplement
• Voluntary retirees subject to the 5 reduction in
  annuity for being under age 62 (MRA 10)
• Disability retirees
• Deferred retirees

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ANNUITY SUPPLEMENT (CONT)

• EARNINGS TEST
• 1. The Annuity Supplement is tested for earnings
  above the exempt amount (14,106.00 for 2009).
  It is reduced 1 for every 2 over the exempt
  amount.
• 2. Special Group employees are not tested until
  MRA (55-57)

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RETIREMENT FEHB
Continuation into Retirement

• Retires on an Immediate Annuity
• Insured on Date of Retirement
• Covered for the 5 years of Service
• Immediately Preceding Retirement
• OR since the first opportunity to Enroll

Coverage as a Family Member under FEHB or
CHAMPUS counts towards the 5 year requirement
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FEHB Changes Permitted After Retirement

• Cancellation
• Self Family To Self Only (Anytime)
• Open Season
• Self Only To Self Family (Event)
• Change In Plan/option

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FEHB Cost After Retirement
Blue Cross and Blue Shield - Standard
Option, Self Family Bi-Weekly
164.58 Monthly 356.59
164.58 x 26 4279.08 356.59 x 12
4279.08
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FEHB Medicare

• MEDICARE Part A Hospital Insurance
• Has been paid for from wages (1.45)
• Federal employees eligible since 1983
• MEDICARE Part B Medical Insurance
• 2009 rate 96.40 per month
• Rate increases 10 each year not elected

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FEHB Medicare

• EMPLOYEES CONTINUING TO WORK AFTER 65
• FEHB is the primary coverage and
  MEDICARE provides secondary coverage
• ANNUITANTS ELIGIBLE FOR MEDICARE
• MEDICARE is the primary coverage and
  FEHB provides secondary coverage

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Federal Employees Group Life Insurance (FEGLI)

• What FEGLI coverage do I currently have?
• Do I have or need other life insurance?
• Should I reduce my FEGLI options as I get older?
• Are my beneficiary forms up-to-date?
• Am I eligible to continue my FEGLI as an
  annuitant?

• Basic Life
• Option A Standard
• Option B - Additional
• Option C - Family

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Continuation of FEGLIinto Retirement

• Employee may continue Life Insurance into
  Retirement if you are
• Eligible to Retire on Immediate Annuity
• (Includes Retiring at MRA 10, even if
  postponing receipt of annuity)
• Insured on date of Retirement
• Covered for the 5 years of service immediately
  preceding annuity commencing date or since the
  first opportunity to enroll

• Employee may continue Option A, B and C into
  Retirement if you are
• Eligible to continue Basic
• Covered for the 5 years of service immediately
  preceding annuity commencing date or
• Since the first opportunity to enroll

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Basic InsurancePost-Retirement Coverage
Option Before Beginning
Age 65
Age 65
75 100 2 Per Month
Until Reduction
Reduction Reduces To 25 50
100 1 Per Month Until Reduction
Reduces To 50 No
100 100 Reduction
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Option A - 10,000 Post-Retirement Coverage

• Premiums are withheld from annuity at the same
• rate as an active employee
• After age 65, premiums are not withheld
• Insurance is reduced 2 per month until the
• value is reduced to 25 or 2,500

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Options B and C Post-Retirement Coverage

• FULL REDUCTION ELECTION
• Before age 65 - Premiums are withheld from
• annuity at the same
  rate as
• active employees
• After age 65 - No cost. Insurance value
• begins to reduce
  2 per month
• until reduced 100

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Options B and C Post-Retirement Coverage

• NO REDUCTION ELECTION
• Premiums deducted from annuity at the same
• rate as active employees
• No reduction to coverage when annuitant
• reaches age 65
• Premiums continue after age 65

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Thrift Savings Plan (TSP)

• DEFINITION
• A defined contribution retirement savings
  andinvestment plan for Federal employees
• TSP ACCOUNT
• Employee contributions
• Earnings

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Options At Separation/Retirement

• Leave money in TSP account until age 70.5
• Receive TSP account in a single payment
• Receive TSP account in equal monthlyinstallment
  s
• Purchase a life annuity through TSP
• Transfer, or rollover, to IRA or other eligible
  retirement plan

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Order of Precedence

• Court Order
• Designated Beneficiary
• Widow or widower
• Children and/or descendants of any deceased
  children
• Parents
• Executor, Administrator of the Estate
• Next of kin

Update your Beneficiary forms due to

• Marriage
• Acquisition of a child
• Divorce
• Death
• Change of Address

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Flow of your Retirement Packet

• Employee submits a completed retirement
  application packet to your servicing District
  Human Resources Specialist.
• The DoDDS Europe Personnel Office reviews the
  application packet, making sure the paperwork is
  complete and filled out correctly. The
  application packet is then forwarded to the DoDEA
  Personnel Center.

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Flow of your Retirement Packet (Continued)

• The DoDEA Personnel Center will do the following
• Certified Summary of Federal Service
• Obtains verification of any undocumented
  service, if time permits
• Reviews your application packet for completeness
• Certifies Life Insurance coverage
• Transfers Health Benefits Enrollment to OPM
• Send your retirement SF-50 to your address on
  your application packet
• TSP withdrawal packet with all the forms and
  information you need regarding your TSP options
  will be sent to your address
• The DoDEA Personnel Center sends your retirement
  packet to DFAS

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Flow of your Retirement Packet (continued)

• DFAS will do the following
• Authorizes final paycheck
• Authorizes lump sum payment for any unused
  Annual Leave not for Educator Leave
• Prepares Individual Retirement Records
  (SF-2806/SF-3100) for transfer to OPM
• These records reflect your yearly retirement
  contributions and other information
• DFAS includes pay and leave records and forwards
  the packet to OPM

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Flow of your Retirement Packet (continued)

• When OPM receives your retirement packet they
  will
• Send you written notice which includes your CSA
  number
• Authorizes interim payments
• Obtains missing documentation
• Determines your eligibility for annuity and
  continued FEHB and FEGLI coverage
• Computes amount of your annuity and sends
  election letters
• Authorizes regular annuity payments
• It will be 6-8 weeks before you receive your
  annuity but be prepared to wait 12 weeks or
  longer
• Your first annuity payments may only be partial
  payments until OPM finishes processing your
  retirement
• When processing is complete, OPM will send you a
  lump sum to make up for the difference between
  the partial and full annuity
• Sends a personalized booklet, Your Federal
  Retirement Benefits, and other information

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Where to direct questions while your retirement
is being processed
Yes

• Have you received acknowledgement and a claim
  number from OPM yet?

• Direct questions to OPM. Always cite claim
  number when contacting OPM.

Yes
If Not

• Wait until you receive acknowledgement, then
  direct questions to OPM

• Ask DoDEA Personnel Office if your retirement
  packet has been sent to OPM.

Yes
If Not

• If your retirement packet has been sent to
  Payroll, the Personnel Office will contact DFAS
  on your behalf.

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STEPS IN PLANNING YOUR RETIREMENT

• 1. Determine whether you are eligible to retire.
• 2. Identify the factors that affect your annuity
  computation
• 3. Decide whether to make a deposit for civilian
  or military service
• 4. Make a decision about survivor election
• 5. Make decisions regarding health benefits and
  life insurance coverage
• 6. Identify the steps in the processing of your
  retirement application
• 7. Identify factors affecting your eligibility
  for Social Security benefits, the amount of those
  benefits, and how to apply for them
• 8. Decide how to receive your Thrift Savings
  Plan proceeds

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