The CSRS .
Explanation of Phased Retirement
PHASED RETIREMENT DEFINITION:
Phased Retirement is a human resources tool that allows employees to continue working on a part-time basis while receiving a part-time retirement annuity. Participants receive additional service credit towards their full retirement. Participants also begin receiving their retirement annuity payments consistent with the payments they would otherwise be entitled to prior to becoming a part of the phased retirement program. Prorated service credits will be calculated for the additional time worked during phased retirement.
PHASED RETIREMENT PARTICIPATION:
Individuals must collaborate and consult with their agency managers to determine eligibility for Phased Retirement and assigned duties and responsibilities. Years of service and the retirement system you belong in also determine eligibility and participation.
Speaking to your agency management and human resources will let you know what your options are. Completion of an application processed by OPM is necessary.
PHASED RETIREMENT BENEFITS:
Employees participating in Phased Retirement get their same benefits under the Federal Employees Health Benefits Plan (FEHB) and the Federal Employees‘ Group Life Insurance (FEGLI) program. The shared contributions from the participant and the government will remain the same. As for pay and leave, Phased Retirement participants are treated as part-time employees.
PHASED RETIREMENT TIME CONSTRAINTS:
There is no particular time limit for participating in the Phased Retirement program. The decision as to how long you will participate in the Phased Retirement program will be a decision made by you and your agency.
Persons contemplating participating in Phased Retirement should consider every aspect of the program to gain a detailed understanding. Discuss the program with your agency representative or human resources and your family so that you can make the best decision for your retirement future.
P. S. Always Remember to Share What You Know.
For Additional Phased Retirement Related Information Click HERE
The Phased Retirement Annuity
One of the incentives offered to gain employee participation in the Phased Retirement program is the more generous annuity at full retirement. Federal annuities are calculated based on years of creditable service and the high-three average salary. Therefore, the longer you work the better things might look in the end for you.
Employees participating in the phased retirement program will have a larger federal annuity than had they retired prior to transitioning into the phased retirement program. A simple equation – additional time means a more handsome annuity. However, if the employee had continued working full-time, then the annuity would be even more generous.
Individuals participating in the phased retirement program must meet similar retirement eligibility criteria as employees fully retiring. Participants in the phased retirement program receive half pay and half their annuity. It should also be noted that the phased retirement participants continue to benefit from their Federal Employees Health Benefits Plan (FEHB) with no changes incurred due to their part-time status. The cost for FEHB remains the same as it was as a full-time employee.
NARFE (The National Active and Retired Federal Employees) are supportive of the final ruling. NARFE believes the phased retirement program will help to streamline the surge of federal employees leaving the service over the next few years. NARFE has expressed a concern about the enforcement of the mentoring portion of phased retirement via individual agencies. The whole premise of phased retirement is to pair very knowledgeable, long-tenured personnel with less seasoned employees. Therefore, if mentoring is not heralded by the agencies and the program itself – then the entire purpose of the program is forfeited. Protecting and harnessing institutional knowledge cannot possibly happen without a commitment from all concerned to understand, support and promote the idea of mentoring.
P. S. Always Remember to Share What You Know.
OTHER PHASED RETIREMENT RELATED ARTICLES
Explanation of Phased Retirement
Phased Retirement – Bring On The Confetti
OPM Director Katherine Archuleta has given agencies permission to send their applications in for Phased Retirement as early as November 6, 2014. Employees who are eligible to participate in Phased Retirement must receive permission from their agencies. The employees who participate continue to work part-time in order to increase and preserve institutional knowledge.
The participating employees will receive a Phased Retirement partial annuity and continue accruing additional service credit toward their final annuity. The employees or phased annuitants will render 20 percent of their time towards mentoring employees to acquire critical information needed to do the work of the agency. Agencies will have the latitude and flexibility to fashion their mentoring programs to suit the needs of individual agencies.
It will be interesting to get a report of the number of applications received after November 6, 2014. The employees, however must have worked a minimum of 3 years before retirement and have accumulated enough time in order to qualify for retirement. Individuals who take voluntary early retirement do not qualify to participate in phased retirement. There must also be a written agreement between the agency and the employee outlining the duties and responsibilities to be achieved during phased retirement. The term of the agreement depends solely upon the parties involved as to how long the assignment will last.
Although OPM processes the applications for phased retirement, those persons desiring to participate must talk to their managers and supervisors to determine what opportunities might exist for them within their own agencies. Each agency will have the responsibility to decide which positions will actually be a part of phased retirement.
It took two years for OPM to issue a final ruling although Congress approved the law in 2012. This is a new program where agencies will have, it seems, a tremendous amount of latitude to define and set parameters for their programs. Although the final ruling has been issued agencies still have a lot of work on their hands to develop programs that will support the goals and objectives of OPM‘s Phased Retirement.
This is a wait and see game. How many employees will participate? What metrics will be used to determine and capture the effectiveness of the program? How many years will it take to collect and analyzing data sufficient to report real outcomes? What are the factors that will determine the continuity of the program? Are there circumstances or factors that will render the program ineffective and pull the plug on it? These questions might have already been asked during the public comment period, but might be worth revisiting for those still trying to get their arms around Phased Retirement.
P. S. Always Remember to Share What You Know.
OTHER PHASED RETIREMENT RELATED ARTICLES
Explanation of Phased Retirement
Phased Retirement – Closing the Knowledge Gap
Phased Retirement – Participation
Phased Retirement’s Debut
The Office of Personnel Management (OPM) issued the final regulations on Phased Retirement on August 7, 2014. Phased Retirement will allow full-time employees the opportunity to work part-time while drawing retirement benefits. Phased-retirement debuted as a mentoring tool to preserve the government’s institutional knowledge. As I stated previously, it is a start to something because institutional knowledge certainly needs to be preserved. Creating another method of harnessing that knowledge with an additional price tag may not be the answer. I have no idea what the cost of implementing Phase Retirement will be. As a matter of fact, perhaps the cost with will be nominal to none.
Phased Retirement is yet another example of not catching the red bird before it flies away. In other words, every agency within the Federal Service knows that employees come into the system and then eventually leave. Knowing that and the tremendous wealth of knowledge employees have who have labored in the Federal workforce for an average tenure of 30 years; why is it that the harnessing of such knowledge is not an ongoing part of operations, strategic planning, succession planning?
How is it that such an important aspect of -knowledge transition- would escape the wonderful minds inside of the Federal service? There was absolutely no need to engage in phased-retirement. For what? It seems par-for-the-course that information should be passed on simply as a normal course of business. Is that not part of the definition of supervision – mentoring, championing, directing, pairing more experienced workers with less experienced workers. It is no secret that seasons exist in the entire continuum of life. Somehow, that very notion slipped through the cracks. Although corporate conglomerates like Coke, Pepsi and KFC have trade secrets that are the underpinnings of their success; competitors don’t know the inside secrets, but the insiders know what it takes to keep the vats churning. It is a passing on, as a matter of course, the necessary information to keep the business going.
The dynamic should be no different for the continuity of the Federal Government than it is for Coke, Pepsi and KFC. Information must be passed on from the largest part of the entity to the smallest unit. There is no enterprise capable of continuing without a strategy to pass on necessary and critical information. To allow the red bird to fly away with all the information in his head, needed to build the most intricate and sophisticated nest possible, and then try to get him back after he has flown away is almost suicidal. The institutional knowledge the Federal Government is now trying to harness via Phased Retirement has always been there. The problem is that the entire Federal Government failed to develop a strategy that would preserve the necessary knowledge needed to keep the agencies of the Federal Government going in the same manner as the Chief Executive Officer of the United States, the Office of the President. The transition from President to President from the days of George Washington to Barack Obama has always been seamless. The same transition of knowledge is possible for the entire Federal Government through Phased Retirement.
P. S. Always Remember to Share What You Know.
OTHER PHASED RETIREMENT RELATED ARTICLES
Explanation of Phased Retirement
Phased Retirement – Closing the Knowledge Gap
Determining If A Trust Is Right For You
It seems to be the general concensus that a Last Will and Testament is an essential part of a good estate plan but Living Trusts are not as widely used nor understood. Although many may think that probate is a negative of the Last Will and Testament, a great many individuals remain comfortable with it. There are a number of ways to pass your wealth onto family members. But whatever method or tool you choose, taking action is pivotal. Don’t spend so much time thinking about what to do that you simply do nothing.
Planning a strategy to pass on your wealth to family members, charities or friends must be a highly personal and individual decision. It is good to consult with individuals skilled in a number of arenas concerning making plans to secure the integrity of your estate. In the final analysis, you must make the decision as to how your assets will be handled. This requires researching and educating yourself so that you can participate intelligently in the conversation and oftentimes requires working with a knowledgeable financial professional.
It is never a good idea to be in a position to listen and listen without the benefit of having some knowledge under your belt. You don’t have to be an expert, but you surely need to have enough information so you can determine which direction you want to take. Summarily, you don’t want anyone making critically important decisions for you. You want to make those decisions yourself.
More and more individuals are turning to Trusts in managing the transfer of their wealth to their loved-ones. As the grantor or the trustor of the trust, you may make changes, additions or transfer assets. You may even terminate the trust altogether. A trust can be changed and so can a will. Both instruments require being informed. By comparing Wills and Trusts side-by-side and of course having a decision with someone you trust will help you decide if a Trust is right for you.
P. S. Always Remember to Share What You Know.
Recommended Articles
For Postal Employees – LiteBlue and the TSP
Federal Retirement Benefit Analysis
Is The Pension Survivor Benefit Best For You? by Todd Carmack
A Little-Known Opportunity Can Increase Your Retirement Income. by Mark Sprague
Phased Retirement Implementation
The Office of Personnel Management (OPM) is pushing hard to implement the new Phased Retirement program. Information has not yet been released concerning the number of employees who have expressed an interest in participating in the Phased Retirement program. OPM is trying desperately to bring younger workers to the service. By retaining some of the older more experienced workers, training of the new employees and getting them up to speed might help with retention through Phased Retirement is both rational and a good potential solution.
It will be very interesting to find out if the phased retirement program offers enough of an incentive to make older workers stay in the Federal service a while longer. For those of us who are Federal watchers the buzz has not been much of a buzz. The Federal workforce does not seem to be too excited about the impending new venture to keep the Federal Government relevant and attractive to a new generation of workers.
The Office of Personnel Management perhaps has not kept up with the changes in the world of work. I can recall when I got my first real job, HR offices were called personnel offices tasked with pushing papers, processing papers without much interaction with people. You went to personnel and filled out your paper work and some woman would ask you about your eye color and your hair color. If she did agree with your eye color she would say something like – who told you your eyes were such and such a color. As personnel evolved, the lady in charge of eye and hair color faded into the woodwork.
After personnel took a back seat, then human resources surfaced. Human resources housed specialists (Classification and Compensation Specialists, Employee Relations Specialists, etc). Then the field found that specialists needed to broaden their base back to be being generalists. The new title became Personnel Management Specialists meaning at least two fields of human resources should be apparent for each management specialist. Human Resources was slowly becoming more involved with people and not just paper behind a glass partition.
After a number of years, personnel evolved into Human Capital Management certainly suggesting a greater involvement with people. Human capital was to hold equal status to financial capital. Given titles and responsibilities have changed, it might be time for the Office of Personnel Management to put on an entirely new face if they expect to attract the millenniums. Perhaps OPM could start by changing its name to the Office of Human Capital Management (OHCM). We stopped using the word Personnel about 10 stop lights back.
I don’t know if phased retirement will do a whole lot for leveraging OPM’s goal of protecting institutional knowledge and passing it on to a new generation. I do know that young people are driven and called to automation almost to the extreme. If we want their knowledge, skills and commitment to public service then leadership had better learn how to drive an Aston Martin wearing skinny jeans and a Mickey Mouse sweat shirt.
P.S. Always Remember to Share What You Know,
OTHER PHASED RETIREMENT RELATED ARTICLES
Explanation of Phased Retirement
The Senate Salutes Federal Employees
Well, not the entire Senate, yet. Ben Cardin (D-MD) and Brian Schatz (D-HI) recently introduced a bill called the Federal Adjustment of Income Rates (FAIR) which would give federal employees a 3.3 percent pay raise in 2015. The proposed pay raise is welcomed news for Federal employees. Federal employees have endured a lot over the past years. They have gone without pay increases, endured pay freezes and furloughs and even lived through the sequester.
A report from Commerce’s Bureau of Economic Analysis stated that the federal civilian workforce was the only entity that experienced a decrease rather than an increase in earnings in 2013. Many unions are standing strong behind the FAIR Act clearly a move that leverages their membership. Federal workers have not been exempt from the economic down-slide faced by the entire nation. Federal workers have had to reevaluate spending and planning for their family’s future. Federal employees were very shaken over the sequester. Although, many knew they would be made whole, expenses and bills that are due now have no relationship with what will happen in the future.
The gap that has always separated public employees from private employees certainly widened as a result of the slow-down and the eventual shut-down of the Federal Government. Salaries and benefits must be competitive in order to bring the highest caliber of talent to the Federal service. It is good to know that Federal employees, often under-appreciated, have found two champions in Senators Cardin and Schatz. The senators appreciate the hard work and dedication of public servants and want them to be rewarded for their hard work and long years of service.
The people of Maryland and Hawaii know that their Senators are not only fighting for Federal employees in their individual states, but Federal employees all over the United States. Because the FAIR Act will benefit all Federal employees, I am certain the Senators will have no problem convincing their 48 colleagues that implementing the FAIR Act is the right thing to do.
P. S. Always Remember to Share What You Know.
Recommended Articles
For Postal Employees – LiteBlue and the TSP
Federal Retirement Benefit Analysis
Is The Pension Survivor Benefit Best For You? by Todd Carmack
A Little-Known Opportunity Can Increase Your Retirement Income. by Mark Sprague
FEGLI …. If What You Thought To Be True. by Marty Duggan
What Is A TransFERS
TransFERS
There was a FERS open season held back in 1987-88 and 1998, allowing employees with at least five years of Civil Service Retirement System (CSRS) service to voluntarily transfer to FERS during one of the two open seasons. When these individuals, called TransFERS retire, they receive both a CSRS annuity and a FERS annuity. These individuals also are guided by FERS retirement eligibility policies, although they receive a CSRS annuity.
According to a number of federal employees, they did not fully understand the move from CSRS to FERS. Is there an advantage to move from CSRS to FERS? That is a hard question and it is also a highly individual question. The best way to answer the question is to line up the two benefits side-by-side and list what each offers. For instance, is the annuity payment higher for CSRS than FERS? Can you participate in TSP for both systems? What about agency contributions to the TSP? These are just a few questions one could use to evaluate each system.
I have always found it more useful for the questioner to evaluate two things and determine which one is better, rather than me saying what you should and should not do. Often times when I am asked a question and I see that the the person asking the question is really missing the bull’s eye on something that is critically important to their well-being, then I will offer a series of questions and or scenarios to get them to review the situation again.
I find that people appreciate a resolution much better when they can see how they got to the resolution. It is just like solving a problem for a kid and he gets an A on the homework without ever knowing what steps were taken to solve the problem.
P. S. Always Remember to Share What You Know.
Recommended Articles
For Postal Employees – LiteBlue and the TSP
Federal Retirement Benefit Analysis
Is The Pension Survivor Benefit Best For You? by Todd Carmack
A Little-Known Opportunity Can Increase Your Retirement Income. by Mark Sprague
Phased Retirement
On one hand OPM Director Archuleta talks about pumping new blood into the Federal Government and then there is the potential roll-out of phased retirement. Phased retirement will keep older workers in the workforce to train younger workers to take over their positions. A strategy as I previously stated that should be an ongoing part of the Government’s strategic operations. It is not forward preparation to allow one or two employees to own all of the information and know-how to perform a task exclusively. That kind of information and how-to strategy must be shared across the division or section.
Team building really does mean that information is shared, analyzed, adjusted and supported by all the stakeholders. When one individual leaves the team, the leaving should have absolutely nothing to do with continuity of services. Life does not work that way and neither does work, but is intended to keep going. The idea of the golden boy or girl is a recipe for failure. There is nothing wrong with celebrating the acumen of individuals at whatever level they happen to be at. But to simply have only one person you can call on to perform a task is ridiculous. You may call on one person to teach so that others can learn and know how to perform the tasks, but it must never be only one person who knows how to do anything. Mercy on us if that person suddenly becomes unavailable and we can only respond by saying – We cannot do it because ABC is no longer available to us.
I see some merit in phased-retirement in terms of keeping people who desire to work working. The part about needing to stay or come back to Federal service to train others to do your job is completely beyond my realm of comprehension. That part of the job should have already been fulfilled. I am now going to pay you to do something I should have had you do as part of the normal course of business. The primary duty and responsibility of a supervisor is to train. We see that duty being abrogated virtually over the entire Government because the culture has been and remains, I am not going to teach anybody anything.
Now I am not going to simply pass that sentiment off as irrational. The workforce did use a strategy for many years that called for more seasoned personnel to train new hired personnel and after the training was done, the new hire was made the supervisor over the more experienced worker. That should not have happened and is perhaps why so many workers are reluctant to pass on information. Even though things might not have been handled correctly in prior years, training and passing on information really is what needs to happen to promote the continuity of work and elevate excellence.
While phased-retirement may not be a costly venture for the government and we won’t know that until the program starts and sufficient data is collected to draw a conclusion. What we do know is that if the appropriate protocol of sharing information and truly creating effective teams were used, the cost would have only been the salaries already there and the benefit would have far outweighed the cost by leaps and bounds. It is never too late to start something that will benefit the nation ad infinitum.
P. S. Always Remember to Share What You Know.
OTHER PHASED RETIREMENT RELATED ARTICLES
Explanation of Phased Retirement
Phased Retirement – Closing the Knowledge Gap
Phased Retirement – Participation
Retirement Planning: Prepare Financially, Physically, Emotionally
Federal Retirement brings a major change in the life of not only the retiree, but also their family. It is a shift from a structured way of life to an unstructured one, which can be unnerving and overwhelming, especially if you are not prepared.
This article will help people prepare themselves financially, physically and emotionally for the next phase of life:
Being Prepared Financially
– Start Saving – Saving, whether for retirement or any other goal, is a rewarding habit. If you are already doing it, great; if not, you should get started. Start saving from a small amount, and gradually develop a habit of keeping aside a specific amount of money every month. Retirement savings programs like the Thrifts Savings Plan can help you plan for the future.
o Federal Employees receive a match to every dollar they invest into their TSP Account – up to the first 5% of their income. It’s like giving yourself a raise by simply putting the money in the account.
– Know Your Retirement Needs – if you wish to maintain the same standard of living after retirement that you currently have you should absolutely perform a Retirement Cost Analysis and a Retirement Benefit Analysis. There are rules of thumb when it comes to retirement planning but as a federal employee your benefits can be very complex. It is always best to operate with as much knowledge as possible. PSRetirement.com offers readers a free retirement Benefit Analysis.
– Know What You Are Eligible For Through Your Employer’s Pension Plan – Through your High-3 calculations and depending on whether you are covered by FERS or CSRS your Federal Annuity can be significantly different than your friends or colleagues. Don’t rely upon their figures to determine what you think you might be eligible for. Work with your HR Department and you may even want to talk with a knowledgeable financial planner who can help you determine how your Annuity should impact what other investments you may need to make before retirement to give you the income you need.
– Know Where Your Money Is Invested – The type of investments you make play a significant role in how much you will have saved at retirement. Keep a track of where your savings and TSP money is being invested. Diversifying investments can minimize risk and depending on your age certain investments may be more appropriate than others.
– Learn About Social Security Benefits – If you are a CSRS employee you may not be eligible to receive Social Security. For FERS employees there are also impacts to your Social Security payments depending on when you claim it and how much you earn in the way of your Federal Annuity. Because of the complexity of the different systems and how they impact one another – it is incredibly important to talk with an expert about what your benefits will be.
Being Prepared Physically
– Stop Smoking – Smoking causes life-degrading and life-shortening diseases.
– Control Blood Pressure – after quitting smoking, the next most important thing that Americans should do is to control their blood pressure by eating healthy and having an active lifestyle.
– Eat Healthy – The expression ‘you are what you eat’ proves to be right when people start having health problems after retirement because of their preceding unhealthy lifestyle. They should eat healthy both before and after retirement to avoid common health issues like blood pressure, hypertension, ulcers and others.
– Stay Active – Many people have an active workout regime while they are employed, but once they retire, they give it up. Having an active lifestyle after retirement is equally important to stay fit.
– Control Blood Pressure – High cholesterol means blocked blood vessels. The best way to lower cholesterol is to keep a check on your weight and exercise regularly.
– Get a Regular Checkup – Even if you feel fit, getting an annual medical checkup is important as some health problems like diabetes, cholesterol and others might not have any obvious symptoms until they get worse.
Being Prepared Emotionally
– Set Lifestyle Goals – Make a list of things that you would like to do or places you would want to visit after retirement, for which you were too busy while employed. You can also plan your financial savings accordingly. Occupying yourself with interesting activities will offset feelings of uselessness after retirement.
– Build a Network – It is important to have a good support system and social circle after retirement to mingle with people who are going through the same transition as you are.
– Consider Your Spouse’s Feelings – Retirement is as much of a life-changing event for you as it is for your spouse, especially if they are still employed. Discuss their expectations, your feelings and sharing of responsibilities to make the transition easy for both of you.
Whether you are nearing the end of your service or are thinking to plan ahead, PSRetirement is your complete source of for all retirement-related solutions!
DOMA: Survivor Annuities and the Defense of Marriage Act
DOMA and Survivor Annuities
With changes in policies regarding Survivor Annutities following the Supreme Court’s finding that Section 3 under the Defense of Marriage Act (DOMA) was unconstitutional, many benefits and other provisions impacting federal and postal workers must now be revisited. Measures have been extended to provide benefits to legally married same-sex spouses that had been previously denied.
Married couples have a number of benefits both under the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS). The same benefits under each retirement system are now available to legally married same-sex spouses. While all benefits are important and understanding those benefits is equally important, emphasis should be placed on Survivor Annuities.
Much of this information will be new and undoubtedly somewhat confusing for same-sex couples because they have not had the headache nor the privilege of having to deal with this before. Albeit, I would venture to say that it is a very welcome burden to bear. I have been teaching retirement classes for a while now and this subject is always a bit demanding initially. In a previous post, I stated that getting ready for retirement at any juncture of one’s career requires some work.
In order to have a complete understanding of Survivor Annuity under both CSRS and FERS requires not only ingesting all of the relevant information, but having a frank discuss with your family members as to what decision is best for your family. Benefits specialists and other planners may be able to make suggestions to you based on certain data, but the best information will come from you and your family. You have everything that is needed to make a good decision including the emotional profile of the why, the what, the when, the how and the what if.
Making such life-impacting decisions can sometimes be a real challenge. It is also an opportunity to have a conversation about some rather critical issues we spend too much time trying to avoid. Here is the rub, the Supreme Court has done some of the work, as a matter of fact, the stage has been set, now it is time to perform a duty for yourself and your family by safeguarding your future. Visit the Office of Personnel Management’s (OPM) website for information on Survivor Annuities. We will also dedicate some future posts to Survivor Annuities under both retirement systems.
P. S. Always Remember to Share What You Know.
LEO – Annuity Component Computations
We are continuing our discussion on the annuity computation focused specifically on LEO (Law Enforcement Officers). We never want to present too much information at once as it is our objective to provide as much clarity as humanly possible. Federal Retirement Systems for LEOs can be complex so assisting the federal workforce in planning for retirement is easier by the inch than the mile.
Many employees in the Federal Government transferred to the Federal Employees Retirement System (FERS) and may be part of a system comprised of two components – FERS and CSRS.
One of the provisions at the time of transfer required at a minimum of 5 years of creditable civilian service covered by CSRS and Social Security. With that caveat,the formula represents 1 percent of the high-3 average salary for each year of service for employees under age 62 upon retirement or age 62 with fewer than 20 years of service.
The percentage rises to 1.1 percent of the high-3 average salary for every year of service for individuals at age 62 or older at separation with 20 plus years of service-representing the calculation of the Federal Employees Retirement System (FERS) component.
Conversely, for LEOs, the Civil Service Retirement Service (CSRS) component employs what I describe as a graduated calculation. During the first 5 years of CSRS the percentage is 1.5 of the high-3 average for every year of service. 1.75% of the high-3 average salary for each year of service for the second 5 years. For all years of service over 10 years, the percentage rises to 2% of the high -3 average salary for each year of service.
Under this scenario, Law Enforcement Officers’ computation is 2.5% of time of CSRS including the years and months of service up to 20 years multiplied by the high-3 average salary added to 2% of the same beyond 20 years of service.
The explanation of computation of LEO FERS annuity benefits underscores the need to take a very serious look at integrating the retirement system to address any and all categories of individuals involved in law enforcement.
P. S. Always Remember to Share What You Know.
Related LEO Articles
Explanation of FERS Component for LEOs
LEO (Law Enforcement Officer) FERS Supplement
BEDB: Basic Employee Death Benefit
Basic Employee Death Benefit (BEDB)
Federal employees’ spouses may be entitled to a Basic Employee Death Benefit (BEDB) upon the death of the employee if the following conditions are met:
• You were married to the deceased employee for at least nine months. If the death occurred as a result of an accident, then the 9 month requirement does not apply.
• You were the parent of a child born out of the marriage even if the child was born after the death of the employee or retiree. You are also entitled if the child was born out of wedlock and you and the deceased federal employee later married.
Under these provisions as the spouse you may be eligible for the BEDB that is equal to 50% of the employee’s final salary or the employee’s average salary if it is higher than the final salary plus $15,000.
The $15,000 is increased by the Civil Service Retirement System’s cost-of-living adjustments.
The same benefit may be paid to a former spouse in whole or partially if there is a court order on file at the Office of Personnel Management (OPM) qualifying the ex-spouse to receive the benefit. The former spouse must have been married to the deceased federal employee for at least nine months and did not remarry prior to reaching age 55.
It is important to know the facts so that important aspects of your federal retirement benefits and provisions can become part of your planning process to retire well. If there are details about your benefits that you need more clarity on, visit your human resources office if you are an active federal employee. If you are retired use your CSA number to contact the Office of Personnel Management so that you will know everything needed to live and retire in comfort and security.
P. S. Always Remember to Share What You Know.
You May also wish to look into Federal Employees Group Life Insurance (FEGLI) benefits
For more information on benefits of CSRS employees click HERE
For more information on benefit of FERS employees click HERE
Information for Postal employees will be found at www.LiteBlue.usps.gov
Phased Retirement Plan – Other Provisions
Phased Retirement Plan
Currently both CSRS and FERS employees may use unused sick leave to add to their years of service, but not towards eligibility for their Phased Retirement plan.
Unused sick leave cannot be used in computing the Phased Retirement annuity. Upon full retirement, however, unused sick leave will be considered and its value will be the same as individuals retiring from full-time employment in the federal service.
Employees who opt to participate in Phased Retirement plan may return to full-time employment upon agency approval. When returning to full-time employment, the Phased Retirement plan annuity will cease.
When the individual retires, the retirement will be calculated under the current law in effect at the time and the phased period of retirement will be treated as part-time. Individuals returning to full-time employment may not re-enter the Phased Retirement Program.
P. S. Always Remember to Share What You Know.
OTHER PHASED RETIREMENT RELATED ARTICLES
Phased Retirement – Who Can Participate
Who can Participate in Phased Retirement?
Phased retirement is a voluntary program where both employee and employer must mutually agree to be a part of the program. There are some conditions that exist both for CSRS and FERS employees. Each group must have had full-time work status for three years prior to participation.
CSRS employees must be eligible for an immediate retirement annuity. The years of creditable service must be at a minimum of 30 years and an age of 55 or 20 years of service with an age of 60.
Under FERS similar conditions must exist. The individual must be eligible for an immediate annuity with 30 years of creditable service and a MRA of 55-57 based on the year of birth or 20 years of creditable service and 60 years of age.
As with any program or service impacting your retirement future, it is very important to clearly understand all provisions, rules and regulations. Further it is your responsibility to analyze each situation to see if it is a good fit for you and your family.
P. S. Always Remember to Share What You Know.
RELATED ARTICLES
Thrift Savings Plan: Why The TSP?
Why choose the Thrift Savings Plan?
The Thrift Savings Plan (TSP) is a retirement savings vehicle designed to help federal and postal employees increase their resources when planning for retirement. But why not take your earnings from the federal government and take your chances in the open market? Maybe you could do better and your money could grow faster or maybe not.
The TSP is an easy way to save with little or no strain and stress on the employee. TSP contributions are payroll deductible once you sign up to participate in the TSP. The TSP offers extremely low administrative fees which external investment firms cannot match. Vanguard which has probably the lowest expense ratios available to investors are still higher than the expense ratio for the Thrift Savings Plan.
Your TSP Account also provides a fund where you will never lose money, the TSP G Fund. The G Fund, Government secured allows participants to earn interest without any risk or loss of principal. There is also very low earnings in the G Fund with only very modest inflationary protection (speak to a TSP expert or licensed and trained financial professional).
So why the TSP, because it offers participants the best way to safely plan for their retirement future while still employed. If you know what the rule of 72 is and how it related to compounding interest; interest built on top of interest that helps your money grow faster. That is yet another advantage offered by the TSP is the fact that while your money is within it or rolled over into an IRA your TSP interest and earnings are tax-deferred.
With the TSP you get to choose the level of contribution you wish to make. Although, employees currently joining the federal service are automatically enrolled in the TSP at a contribution level of 3%, you have the option of disenrollment. But why would you want to? The TSP is hands down the best way for federal employees to start early managing their retirement future.
To access your TSP Account click here
Click here for TSP Roth information.
Have a TSP L Fund – want to know more
P. S. Always Remember to Share What You Know
Postal Retirement – Preparing the Workforce
Preparing for Postal Retirement
The Postal Service has several programs designed to secure upward mobility for its workforce. There is an Advanced Leadership Program, an Associate Supervision Program, a National Center for Employee Development and a Managerial Leadership Program and an online platform to access your benefit information and make certain elections, LiteBlue.usps.gov. All of these programs are designed to help the Postal Employees grow in their career and prepare for retirement.
Each program, from LiteBlue to the Thrift Savings Plan, is designed to help and to develop a workforce of excellence, equipped with the knowledge, skills and abilities to implement operations required by high-tech equipment and practices necessary to carry-out the complex work of the Postal Service and to retire comfortably.
In order to reach the Postal Service’s large and multi-jurisdictional workforce, the service uses a plethora of e-learning tools and other technology to train its employees. The Postal Service’s training profile is designed to recruit and train program leaders and managers up to the executive level of operations.
An unfortunate reality, however, is the fact that the USPS has chosen to remove most HR functions from local Post Office with the creation of the Shared Services. The need for direction, therefore, on HR and Retirement related questions often falls to potentially untrained individuals at your Station and word of mouth recommendations. The need for financial professionals has never been more important to the Postal employees and soon to be retirees because of the demographic shift and the aging of the workforce, along with the ever increasing complexity in TSP funds and recommendations, FEGLI comparisons and ways for these employees to protect their lifestyle and financial well-being in retirement.
If you’re a Postal employee and have questions on your benefits and postal retirement, PSRetirement.com can provide you with introductions to local FERS, CSRS, TSP and FEGLI experts and may be able to facilitate a free Benefit Analysis for you and members of your office or Local Union looking for direction or help. Regardless of where you turn, make sure that you are getting the information you rely upon from a competent expert in your complex benefit and retirement options.
Information on the unique benefits for Postal Employees is also important to understand
Other Postal Retirement and LiteBlue Related Pages
What Postal Employees Should Do On LiteBlue Before Retirement
Changing Your LiteBlue / PostalEase Password Through ssp.USPS.gov
eRetire for Postal Employees – Retirement Applications on LiteBlue
Use LiteBlue to Manage your FEHB
You can use LiteBlue and PostalEase to manage your Allotments
Requesting Duplicate Postal Employee W-2 Forms Using LiteBlue
Postal Retirement and Benefits – Postal Employees
Postal Retirement
There are some slight differences between the benefits of Postal employees and Federal employees. We would like to explain a few of them here and potentially give you reason to seek out additional informtion from a qualified benefit expert to help you with your own specific circumstance and questions about postal retirement. Employees in the federal service, not including the Senior Executive Services (SES), earn about 26 days of annual leave per year after 15 years. After the same period Postal Workers, earn a maximum of 20 days.
The leave structure is 10 days per year up to 5 years of service for the Postal Service as compared to 13 days for the first 3 years of service as a regular federal employee. From 4-14 years of service, regular federal employees receive 19 days of annual leave while postal workers receive 15 days after 5 years.
Federal employees also earn 4 hours of sick leave per pay period, while postal employees earn 3 hours per pay period to safeguard against illness and accidents. Because of the structure and the mission of the Postal Service the compensation profile is different from the regular federal service.
Postal employees regularly get pay raises and are compensated for overtime, night shift differential and Sunday premium pay. There are also minor differences in how FEGLI is paid. Therefore, when postal employees work on their own financial plan and postal retirement future, it is valuable to understand the structure of the postal employees’ total compensation and benefits plan.
P. S. Always Remember to Share What You Know.
For Postal employees; learn about LiteBlue
Learn about your FEGLI benefits and how you are covered.
Social Security: More Information
It is important that we gather as much information as possible to ensure the best use of our resources in retirement and maximizing your Social Security benefits (SSB) is an absolute must if you want to get the most out of your working years. Consider the facts below as part of your plan to retire well:
• Income from pensions, annuities and investments are not impacted by the earnings test. Earnings only apply to wages from a job or net earnings from self-employment.
• Forty credits are needed over the lifetime of one’s work career to qualify for Social Security retirement benefits.
• No estimate can be given if you have not earned enough credits to qualify for Social Security benefits.
• The closer you get to retirement, the more accurate your SSB estimations will be because there are fewer fluctuations in earnings and changes in the law.
• Currently you earn one credit for every $1200 you earn in wages or self- employment income. Earnings of $4800 will give you the 4 credits needed for one year.
• Actual Social Security Benefits calculations cannot be provided until you apply for benefits.
• Earnings may increase or decrease in the future.
• Once you begin receiving your SSB they will be adjusted for cost-of-living increases.
• Estimated benefits are based on current law (Laws are subject to change).
• Social Security Benefits may also be impacted by military service or pensions earned via work where you did not pay Social Security taxes.
For Federal and Postal employees the challenges of understanding Social Security stems from the fact that your employment benefits are already incredibly complex to fully understand. When you ad in Social Security you now also have to recognitize that if you focus solely on claiming at 62, 66 or 70 (the basic dates most people mistakenly select) you will miss out on a HUGE potential opportunity. Educating yourself on the different Social Security claiming strategies is a must. Recognition that if you are eligible for Social Security Benefits, in many instances if you delay claiming Social Security, your benefits will grow at 8% per year. That is an 8% guaranteed return from the U.S. Government – not too bad, especially when CDs pay 3% or less. All of this leads us to a simple reasoning, we highly recommend that you talk with a financial professional who is an expert in your FERS, CSRS & FEGLI benefits as well as one who has a great deal of expertise in Social Security claiming strategies.
P. S. Always Remember to Share What You Know.
Read more about your Social Security benefits
Having a well defined Retirement Plan is more important now than ever before
Windfall Elimination Provision (WEP)
The Windfall Elimination Provision (WEP) only impacts individuals who earned a pension in any job and did not pay Social Security taxes, but worked long enough in other jobs to be eligible for Social Security Retirement or benefits due to disability. The Windfall Elimination Provision impacts Social Security benefits when any of an employee’s federal service after 1956 was covered under the old Civil Service Retirement Systems (CSRS). Social Security was not withheld from these employees’ checks because the Social Security System had not yet been formed.
The Windfall Elimination Provision (WEP) applies to federal workers if they reached age 62 after 1985 or became disabled after 1985. It also applies if you became eligible for the first time for a monthly pension based on work you performed where you did not pay Social Security taxes after 1985. The provision still applies even if you are still working.
Lower wage earners receive a higher return on their Social Security benefits than higher paid earners. While lower paid earners may receive as much as 55% of their income before retirement, high salary earners may only receive approximately 25% of their pre-retirement income. Social Security benefits were never designed to replace all of a worker’s pre-retirement earnings but only a percentage.
Prior to 1983 before Congress passed the Windfall Elimination Provision workers who had jobs not covered by Social Security, benefits were calculated as if they were low-wage workers. This allowed them to have the advantage of receiving a higher percentage of their pre-retirement earnings in addition to receiving a pension from employment where they paid no Social Security taxes.
To see the maximum amount your benefit could be reduced visit www.socialsecurity.gov/retire2/wep-chart.htm.
P. S. Always Remember to Share What You Know.
You may also want to read Government Pension Offset (GPO)
