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Thank you for signing up to receive the Retire Federal newsletter! This issue has you covered at mid-career planning; pre-retirement as well as something for those living out their life after retirement. Retire Federal exists to help prepare federal employees for retirement, provide assistance when applying for benefits, and guidance to those who need direction when navigating the maze of all the parts of your retirement benefits that fit together for financial independence.
Recent Question:
Question: I am a 54-year-old federal worker who is looking forward to retirement. I have been employed since September 2010. Prior to that, I was employed as a federal contractor at my current agency for four years. At the time of my conversion from contractor to federal, we were not informed that our contract time could count towards our retirement. Now, it seems to be standard practice in my office. I was wondering if you had any information about how I can go about having my contract time count towards my retirement.
Answer: I don't know of any exceptions that would allow time as a government contractor to become creditable service for retirement. This period of employment would not meet the test of creditable civilian service (see reference below). It is possible that this service could be used for "leave" credit allowing a new employee to start at the 6 or 8 hour leave accrual category based on past experience. Remember that the "leave" SCD is not the same as the "retirement" SCD. Your "retirement" SCD is computed when you are planning your retirement and is used for eligibility and computation of your CSRS or FERS retirement benefit. Check with your HR retirement specialist for questions regarding your SCD for retirement.
Here are some references for you:
https://www.opm.gov/retirement-center/publications-forms/csrsfers-handbook/c020.pdf (see pages 3 - 6 and 54-55)
https://www.opm.gov/policy-data-oversight/data-analysis-documentation/personnel-documentation/servicecreditleave/
1-2. Service Computation Date
A Service Computation Date (SCD) is a date, either actual or constructed, that is used to determine benefits and is generally based on how long the person has been in the Federal Service. The SCD-Leave is used to determine the rate at which an employee accrues annual leave - 4, 6, or 8 hours per pay period - depending on the amount of service creditable for leave accrual purposes; however, it is not used to determine the accrual rate for employees occupying positions which are subject to sections 5376 or 5383 of title 5, United States Code, or a pay system equivalent to either of the sections referenced as determined by OPM. Such employees accrue 8 hours of annual leave per pay period pursuant to section 6303(f), title 5, United States Code. (See http://www.opm.gov/oca/leave/html/sesannu al.asp). Agencies must establish an SCD Leave for each employee at appointment, whether or not the employee is eligible to earn leave. To establish the SCD, the agency must identify the employee’s prior Federal service, verify such service, determine how much, if any, of the service is creditable for leave accrual purposes, and then compute the SCD.
1-7.h. Prior non-Federal Service or Active Duty Uniformed Service that otherwise would not be creditable.
Section 6303(e) of title 5, United States Code, as amended by section 202(a) of the Federal Workforce Flexibility Act of 2004 (Pub. Law 108-411 dated October 30, 2004), permits a newly appointed or reappointed employee to receive credit for prior non-Federal service or active duty uniformed service that otherwise would not be creditable. Credit granted under this provision can only be applied upon appointment or reappointment (following a break in service of at least 90 calendar days from the last period of Federal civilian employment) to a position on or after April 28, 2005.
Pre-Retirement To-Do List
You've decided that you are financially prepared and mentally ready to set the date and begin your life after retirement. The responsibility for a smooth transition from employee to becoming a FERS (or CSRS) annuitant is shared between you, your human resources retirement specialist, your agency payroll provider, and the Office of Personnel Management. Here are the top ten things that you can do to make sure you get off to a good start:
Review your electronic Official Personnel Folder (eOPF) to ensure it contains all documentation of your federal civilian and military service. There should be evidence of your beginning and ending dates of federal employment, changes in retirement coverage, as well as any work schedule changes such as periods of LWOP, part-time or intermittent. Contact your HR or Shared Service Office if anything is missing. Keep personal copies of these documents in case you need them to prove your federal service dates.
Confirm your Service Computation Date - Retirement, with your HR Office. This is the date used to determine your FERS or CSRS retirement eligibility and will be used to compute your length of service. This could be a different date from the SCD (leave) that is published on your Notification of Personnel Action Statements, form SF 50. You may find that a payment is required to receive credit for a period of service that wasn't covered by retirement deductions or that you have a period of service that wasn't properly documented.
Ensure you receive all the service credit you are entitled. You will want to read Tammy's recent article if you have active duty military service or prior civilian service. It is worth repeating the first bullet: Review your electronic Official Personnel Folder (eOPF) to ensure it has all your civilian and military service documented and contact your HR or Share Service Office if anything is missing. This could make a difference of when you are eligible to retire, the amount of your future retirement income, and even if you are in the correct retirement system.
Do you need to make a deposit for active duty military service? The deposit must be completed before you leave the agency. This can take time to process and the payment can be made over time through payroll deductions or paid in a lump sum payment.
Do you owe a deposit for FERS or CSRS civilian service that was not covered by retirement deductions or where the deductions were previously refunded? Do you know how much you owe and what the impact is on your retirement if you don't pay it? Deposits are optional and can affect the computation of your retirement and leaving them unpaid may also affect your retirement eligibility. It is important to know if you owe money to the retirement system and if you do, be sure to discuss your options with a retirement specialist. Although this payment can be made directly to OPM during the processing of your retirement, remember the interest continues to accrue up to your date of separation and this will be one more reason for a delay in the processing of your annuity. If possible take care of your deposits so that you have a $0 balance when you separate. These are not a high priority request at OPM (deaths, disabilities, and retirements come first) when submitted prior to retirement, allow up to a year from submitting the Application to Make a Service Credit Deposit (SF 2803 - CSRS or SF 3108 - FERS) to receiving the $0 balance receipt from OPM. Keep copies of EVERYTHING!
Complete the Application for Immediate Retirement (SF 2801 - CSRS or SF 3107 - FERS) using the fillable version of the form available at www.opm.gov/forms. Read carefully and be sure to attach any documentation necessary and only submit the Sections that are applicable to your situation. Schedules A, B, and C are only necessary if you performed active duty military service, are receiving military retired pay, or have or had a worker's compensation claim. Your HR office will complete the Certified Summary of Federal Service for you (you should review the completed form and sign prior to your retirement). The Spouse's Consent to Survivor Election form is only needed if you are providing your current spouse with less than the maximum spousal survivor benefit. If you have FEGLI, be sure to also complete the SF 2818, Continuation of Life Insurance form as well.
Be sure to request a final retirement estimate from your HR specialist for the date of your retirement. Check for accuracy on any applicable reductions to your FERS or CSRS retirement including survivor benefit election, part-time service pro-ration factor, CSRS Offset computation, and age reduction. If you're entitled to the FERS Special Retirement Supplement, be sure it is shown on the estimate.
Check the final annuity estimate for the amount of withholdings for insurance and taxes. The estimate will not show state tax withholding and the federal tax may be underestimated. Does it show the withholdings for FEHB, FEGLI, FEDVIP and FLTCIP (insurance coverage that you are continuing into retirement)? Try to figure out your "net" monthly annuity - that's the amount you can spend!
You'll want to have a cash reserve to cover your living expenses during the processing of your retirement benefit. This can take up to three months if all goes well and six to eight months for problem cases. Save your annual leave during your last year on the job to increase the lump sum payout which can help to bridge the gap for the time between your last paycheck and your full retirement benefit. If you spend your cash reserve, plan to replenish it. Retirees have emergencies just like everyone else!
Turn in your application at least 30 days (small agency) or 60 - 90 days (or more) for a larger organization to allow time for the next step in the process. Your HR specialist can let you know how much time they will need to put together the "package" of documents that will be submitted to the Office of Personnel Management in the weeks following your retirement. Providing ample notice will allow your application to be on top of the queue. This package is submitted to OPM in a FedEx envelope and the goal is for this to be mailed to OPM shortly after your last day on the job! Your payroll office will send your final Individual Retirement Record (SF 2806 - CSRS or SF 3100 - FERS) to OPM after you have been separated from the agency payroll - generally within 30 days of your separation. You should be notified when your "Register of Separation" was sent to OPM. OPM will notify you when they have received your claim and they will assign you a CSA (Civil Service Active) number along with instructions to access OPM Retirement Services Online when they have determined you have title (eligibility) for a retirement annuity.
Applying for Survivor Benefits
If there is a death of an annuitant or spouse, it is important to notify OPM, SSA and TSP. Below is a summary of contact information:
Office of Personnel Management
1-888-767-6738
Thrift Savings Plan
Social Security Administration
The funeral home or hospital typically will report deaths to SSA, but it is important to contact SSA to be sure.
1-800-772-1213, TTY 800-325-0778
BENEFEDS
If the survivor had the Federal Dental or Vision Insurance
1-877-888-3337, TTY 877-889-5680
1-800-582-3337, TTY 800-843-3557, Int'l 571-730-5938
NARFE members have excellent booklets you may find helpful:
Be Prepared for Life's Events, What your Survivors Should Know to help organize your personal, assets, civilian and/or military retirement, Social Security, TSP, insurance, etc.
Mark Your Calendars
Valuable training opportunities are available in the coming months! Sign up to learn more to help you plan for your retirement:
May 17: Mid-Career Reality Check: Golden Handcuffs or a Move to the Private Sector? 2 p.m. ET - Register here
May 18: Three Most Common Mistakes Federal Employees Make 12 noon ET Register here
June 1: The Final Countdown to Retirement: Smoothing the Transition 2 p.m. ET Register here
June 28: How to Use Your TSP in Retirement 12 noon ET Registration at PYFR coming soon
July 19: Debunking Common Retirement Myths 2 pm ET NARFE Federal Benefits Institute
August 10: Q & A from the Plan Your Federal Retirement Summer Series ET Registration at PYFR coming soon
August 31: TSP: Should I Stay or Should I Go? 2 pm ET NARFE Federal Benefits Institute
Additional Learning Opportunities
Many engaging and informative broadcasts are archived at the NARFE Federal Benefits Institute, including:
How to Prepare for Long-Term Care: Aging Gracefully While Financially Secure. Tammy Flanagan and Mark Keen, CFP, guide you through how to plan and prepare – emotionally and financially – for the prospect of future long-term care costs.
Podcast archive at Plan Your Federal Retirement and Retire Federal with Tammy Flanagan and Micah Shilanski, CFP. These broadcasts provide fun, fast and informative retirement planning guidance.
Retirement Planning is the name of Tammy's weekly column appearing on www.govexec.com. It covers what you need to know for a successful transition to retirement. Get the latest stories and updates sent to your inbox every Friday.
For Your Benefit airs live on Federal News Network. Find the live broadcast on Mondays at 10am Eastern and the archived shows are available as a podcast wherever you normally get your podcasts. Past attractions worth listening to include:
Kim Weaver from the TSP (For Your Benefit)
Tom Temin An Update on TSP's website (The Federal Drive with Tom Temin)
Marybeth Franklin on Social Security (For Your Benefit)
The Thrift Savings Plan also has online training opportunities. Be sure to register as they fill up fast.
The Social Security Administration has informative videos and websites:
Need Individualized Help?
As many of you know, Retire Federal exists to provide one-on-one consultations to help federal employees plan for retirement and federal retirees with post-retirement decisions regarding Medicare coordination; death benefits administration and issues / problems with OPM, SSA, and TSP. Contact us to schedule your next appointment with one of our experienced retirement benefits experts.
NARFE members enjoy a wealth of benefits that serve their information and financial needs. In addition, they have the satisfaction of having put their support behind a legislative powerhouse that is determined to defend the federal community. Benefits for federal employees and retirees are a popular target for legislators and administrations trying to find budget cuts.
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