FERS Open Season Guide

RETIREMENT

FERS Open Season Guide

During the last six months of 1998, about 1 million employees in the Civil Service Retirement System have a one-shot chance to transfer to the Federal Employees Retirement System. If you're one of them, you're probably wondering just what changes to make, how to go about making them and what effect your choice will have on your future.

There are many resources available to help you with your decision, so we at GovExec.com have compiled this special guide that provides the information you need for one-stop retirement open season planning.

THE FACTS

WHAT: Retirement Open Season

WHO: About 1 million federal employees covered under the Civil Service Retirement System

WHEN: July 1-December 31, 1998

HOW:You must complete an election form, SF 3109, Election of Coverage, and return it to your agency's personnel office. An election to transfer to FERS is effective at the beginning of the next pay period after your agency receives the completed form.

WHY: To secure your retirement.

THE BACKGROUND

In October 1997, a last-minute addition to the Treasury-Postal appropriations bill provided for an open season. After reviewing the bill, President Clinton used his line-item veto power to cancel the CSRS-FERS switch. Administration officials had estimated the proposal would cost agencies $854 million over five years. The National Treasury Employees Union filed suit, claiming both that the line-item veto law is unconstitutional and that Clinton exceeded his statutory authority in vetoing the retirement measure.

A federal judge later approved an agreement between NTEU and the Justice Department to rescind President Clinton's line-item veto. The administration then asked Congress to rescind the open season in its fiscal 1999 budget proposal, but Senators and Representatives showed no interest in undoing the legislation.

OPM GUIDANCE

OPM has created a Web site, www.opm.gov/fers_election, providing guidance for employees considering the CSRS-FERS switch.

The OPM guidance includes:

• An overview of FERS
• An overview of CSRS
• A description of CSRS Offset benefits
• The FERS Transfer Handbook
• Factors employees should consider
• A quick decision guide
• Comparisons of projected benefits
• Copies of the forms needed to complete the transfer

• Request a Personal Earnings and Benefits Statement (PEBES) from the Social Security Administration
• Information about the Thrift Savings Plan

EXPERT ADVICE

At a recent OPM satellite broadcast, a panel of experts answered questions about switching from CSRS to FERS.

Q&A with Mary Sugar, chief of OPM's Agency Services Division.

How does a person know if he or she would be better off under FERS?

What issues should an employee consider in making his or her decision?

How will the decision affect an employee's retirement age and benefits?

Q&A with OPM retirement benefits specialist Ed Chimelowski.

If a CSRS employee transfers to FERS, what happens to the benefits the employee was earning under CSRS?

It seems as though the benefit under FERS is a lot less than the benefit under CSRS, so why would someone transfer to FERS?

How will transferring to FERS affect CSRS Offset employees?

Q&A with Thrift Savings Plan liaison specialist Patty Muller.

Agency contributions to the TSP account are one of the main differences between CSRS and FERS. What can you tell us about those contributions?

What is the procedure after you transfer to FERS?

Is there a specified amount of time employees who transfer to FERS would have to work before those government contributions would become theirs?

Although the stock market fund actually had a loss last month, the rate of return in the C Fund has been very high over the last year. If someone changes to FERS, can they count on such high rates of return?

Are the TSP withdrawal options and tax consequences the same whether you remain in CSRS or FERS?

For more information, see GovExec.com's extensive coverage of the open season:

OPM Provides Retirement Open Season Info (May 29)
Legislators Urge Open Season (March 16)
Open Season Up in Air (Jan. 7)
Retirement Open Season On Way (Jan. 2)
Clinton Reverses on Retirement (Dec. 22)
Retirement Switch Idea Still Alive(Nov. 6)
Union Challenges Line-Item Veto (Oct. 17)
Retirement Window Shut (Oct. 16)