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Advice on how to prepare for life after government.

In The E-Mailbag

This week I'm going to give you a peek into my e-mail inbox. The following questions are from federal employees from various agencies and with a variety of concerns. They are typical of those handled every day by the hard-working people in the human resources offices of every federal agency. Did you know that the number of federal retirements processed by these offices has increased at a rate of 10 percent per year for more than 10 years? And according to the Office of Personnel Management, the federal retirement "tsunami" is just beginning to be felt.

My husband works for the U.S. Postal Service and I work at the Equal Employment Opportunity Commission. Currently, my husband has a family policy with TN Blue Cross Blue Shield that covers both of us. If he passed away, would the policy continue under my name automatically? Would I be covered? If not, should we both take out single health insurance policies with our separate agencies? We do not have children.

If your husband dies before you, there are two ways you could continue the federal health insurance:

  • Have the premiums deducted from your spousal survivor annuity.
  • Choose to have coverage through your own government employer.
While you are employed, it would be best to continue coverage through your agency, since employees can pay their health insurance premiums with pre-tax dollars, unlike retirees or survivor annuitants.

My service computation date is 5/12/1978. If I have to retire to be with a terminally ill parent, what would be the ramifications? Or, how does the hardship transfer work? Where can I find out about it?

If your agency has an office in the city where your parent lives, a hardship transfer may be an option that you can discuss with the agency if there is an opening. Otherwise, you may use up to 12 weeks of unpaid leave under the 1993 Family and Medical Leave Act. Retiring is an option, but a very permanent one. If you started working in government in 1978, you do not have 30 years of service, so unless you are over age 60, you may be facing a deferred retirement or a greatly reduced retirement under the Federal Employees Retirement System MRA+10 provisions.

Under FERS, is time spent in a combat zone, or an area where you were awarded a campaign medal (for example, Korea) added to your years of service?

All honorable, active military service is potentially creditable under both the Civil Service Retirement System and FERS. There are some conditions, however. In most cases, if you are a military retiree, you will have to permanently waive your retired pay and pay a military service credit deposit if you want to credit any of your military service towards your FERS (or CSRS) retirement. OPM has a fact sheet that provides more information on the conditions for receiving credit under CSRS. (These rules mostly apply equally to FERS, except for the fact that paying a military deposit is required regardless of Social Security entitlement, and the deposit amount is equal to 3 percent of your military base pay rather than the 7 percent deposit for CSRS). Campaign and combat time does count toward your leave and pay service computation date, but the rules are different for crediting service toward your retirement.

A few of us at work are a little confused with Social Security versus government pensions. If a person has his or her 40 quarters of work under Social Security and will be collecting Social Security benefits plus a government pension, do they reduce the federal pension or the Social Security benefits? We have heard both ways. Also, how much do they reduce your pension if you are eligible to collect both?

It depends. (Great answer, right?) Here are the potential scenarios:

  • If you are retired under CSRS and have qualified for Social Security retirement benefits, you most likely will have your Social Security benefit computed under a modified formula that is less generous than the general formula used for computing such benefits. This is due to the Windfall Elimination Provision. (Here's a column about it.)
  • If you are retired under CSRS Offset, you will have your CSRS retirement benefit reduced when you qualify for Social Security retirement (normally at age 62, unless you retire later or do not have 40 credits of coverage).
  • If you are retired under CSRS and did not pay your post-1956 military service deposit, you will have your CSRS benefit recomputed at age 62 (or at retirement, if later) to eliminate the military service credit if you are qualified for Social Security retirement.
  • If you retire under FERS, there is no reduction to your FERS or your Social Security retirement benefits. (But if you transferred from CSRS to FERS with a CSRS component to your retirement, you may be affected by the Windfall Elimination Provision in the same way as other CSRS retirees.)
When I worked for the U.S. Senate from 1970 to 1973, I cashed in my retirement, which was between $3,000 and $4,000. Would it make much of a difference in my annuity check if I did not pay it back? Or would I be better off paying it back and approximately how much would I owe? How do I go about finding out the true amount that I cashed in?

Rules for redeposits are tricky. There isn't a one-size-fits-all answer to your question. In this situation, you could choose to pay the redeposit (with interest) and avoid any reduction to your retirement. If you choose not to pay the redeposit, the service is still creditable toward eligibility for retirement and computation of retirement benefits. However, the money owed to the retirement fund would result in a permanent reduction in your retirement benefits. To find out how much you owe, you should contact your HR office and ask for an estimate of your unpaid redeposit. If you are near retirement, you also should ask for a retirement estimate showing your retirement computed with and without payment of this money. After having the facts, the decision should be clearer.

I started out under CSRS in the early 1980s. Then I was put in the new FERS. I had a few temp years before the CSRS. Can I pay them back and be put back in CSRS? How many years do I need under CSRS? No one in my HR office knows.

Situations involving changes in retirement systems can be complicated. If no one in your HR office knows what to do, they need to find out. It is the agency's responsibility to assist employees who may have been placed in the wrong retirement plan. The 2000 Federal Erroneous Retirement Coverage Correction Act provides relief for employees, former employees, annuitants and their survivors for retirement coverage errors that existed for three years or more of service after Dec. 31, 1986. The employing agency is responsible for preparing and issuing packages on options, providing counseling and making the actual corrections. HR offices should refer to OPM's CSRS and FERS Handbook for Personnel and Payroll Offices for information about making retirement coverage determinations.

Your retirement course mentions voluntary retirement contributions and being able to put in up to 10 percent of one's civil service earnings. How can I find out what my earnings were?

Voluntary contributions may be made in multiples of $25, and total contributions may not exceed 10 percent of the total basic pay you received during your federal service. The 10 percent limit applies at each point of time that a deposit is made and is not based upon a projection of lifetime earnings. Believe it or not, you are responsible for computing this amount. OPM will compute the limitation when you retire or close out your account. If you are found to have exceeded the 10 percent limit, you will not receive interest on the excess contributions.

Under CSRS, how much can I place in my Thrift Savings Plan account? If I have not put the maximum in now, can I raise the deduction? I am already doing catch-up and am over 50.

Typically, employees are only supposed to make catch-up contributions if they are already contributing the maximum to their TSP account. All employees (both CSRS and FERS) may contribute up to the IRS tax deferral limit, which is $15,000 for this year and $15,500 for 2007. If you want to increase your regular TSP contribution allotment, you will need to fill out form TSP 1 or access your agency's electronic benefits system.

Tammy Flanagan is the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars. She has spent 25 years helping federal employees take charge of their retirement by understanding their benefits.


Tammy Flanagan has spent 30 years helping federal employees take charge of their retirement by understanding their benefits. She runs her own consulting business at and provides individual counseling as well as online training for the National Active and Retired Federal Employees Association, Plan Your Federal Retirement and the Federal Long Term Care insurance Program. She also serves as the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars.

For more retirement planning help, tune in to "For Your Benefit," presented by the National Institute of Transition Planning Inc. live on Federal News Radio on Mondays at 10 a.m. ET on WFED AM 1500 in the Washington-metro area. Archived shows are available on

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