How to ensure your federal retirement benefit is correct

Over 33,000 retirement claims were processed at the Office of Personnel Management's Retirement Operations Center in January and February this year, according to the agency. The digital claims that were processed in February were finished in 34 days, and paper claims were processed in 95 days. This processing time begins when OPM receives your application from your agency. About one-half of February’s 31,240 new retirement claims were digital and the remaining 15,746 were paper. To learn more about how your retirement is processed, visit the following pages of OPM's website:

• OPM Retirement Quick Guide
• Retirement Processing Times
• How OPM is Preparing for the Surge in Retirements FAQ
• Retirement Processing Status Statistics
• Check Your Interim Pay Status
  Also on Services Online you can find your annuity statements, 1099-Rs, adjust your tax withholdings, make direct deposit changes, update your contact information and verify your life insurance (FEGLI).

It pays to know how much your gross and net annuity amounts should be before you retire! Your FERS retirement benefit is computed using a deceptively, simple formula:

One percent of your “high-three” average salary, times your years and months of creditable service, including credit for your balance of unused sick leave.

If you retire at age 62 or older with a minimum of 20 years of service (which may include a combination of actual creditable service and your balance of unused sick leave), the factor for the computation is 1.1% instead of 1.0%, resulting in a 10% higher basic benefit.

After computing the unreduced benefit, then there may be reductions applied in the following order and will result in a reduced “gross” amount of your benefit.

• Age reduction: Reduction for age when retiring under early deferred retirement or MRA + 10 provisions. There is no reduction for age for an employee who retires on a disability retirement or on an immediate annuity for employees retiring under early retirement provisions for VERA (Voluntary Early Retirement Authority), DSR (Discontinued Service Retirement) or special groups such as law enforcement officers, firefighters, etc.
• Reduction:
  • Reduction to provide a survivor annuity to a person with an insurable interest.
  • Reduction to provide a survivor annuity to a spouse and/or former spouse(s); and/or
• Alternative annuity reduction (AFA): The only employees who may now elect the AFA are those who are eligible for a non-disability annuity and who have a life-threatening affliction or other critical medical condition.

Once your gross annuity is determined, then federal tax, state tax, court ordered apportionments and insurance premiums for FEHB, FEGLI, FEDVIP and FLTCIP may be withheld.

• Learn more about court ordered benefit payments
• To establish/change withholdings and allotments, visit Services Online or call the Retirement Information Office at 1-888-767-6738.
• For more information on taxes, visit tax information for annuitants.
• For more information on life insurance in retirement, visit life insurance coverage.
• OPM publishes biweekly and monthly FEHB premiums and PSHB premiums.

You are not expected to know all of the rules for crediting your service for eligibility and computation of your CSRS or FERS retirement, but if you are not sure about whether your service is creditable or whether you must pay a deposit or a redeposit to receive credit, it is very important to find out BEFORE you separate from your federal career. Ask questions and educate yourself about the creditability of your federal service. These rules are very technical and can be complicated if you are not familiar with them.

• Military service: Service that is included in your “leave” Service Computation Date that is published on your Notification of Personnel Action statements (form SF 50) is not always creditable for retirement. Here are the rules for crediting military service to your retirement:
• Creditable military service: Chapter 22, CSRS and FERS Handbook
• Service credit payments for post-56 military service: Chapter 23, CSRS and FERS Handbook
• Benefits Administration Letter 23-105, Subject: Military service deposit eligibility notification requirement
• Benefits Administration Letter 21-101, Subject: Payment of interest on post-56 military deposit or Peace Corp or VISTA service deposit with an administrative error
• Benefits Administration Letter 17-101, Additional guidance on military deposits
• Civilian service credit: In general, all federal and District of Columbia employment is considered creditable under the Civil Service Retirement System (CSRS). The FERS Act provides that, with certain exceptions, service creditable under CSRS is potentially creditable under FERS. However, there are some important conceptual differences. These differences are discussed in the following chapters of the CSRS and FERS Handbook and in the Benefit Administration Letters that were issued after these chapters were published in 1998 (28 years ago!). Beware that when you see the word “general” or “generally” that means that there are exceptions!
• Creditable civilian service: Chapter 20, CSRS and FERS Handbook
• Service credit payments for civilian service: Chapter 21, CSRS and FERS Handbook
• Benefits Administration Letters dating back to 1995 

Here are some additional ways to find the answers to your questions:

• Be careful when relying on secondhand information from well-meaning friends, family and coworkers! Do additional research before applying undocumented information to your situation.
• If you are working with a financial advisor, be sure that they routinely work with federal employees like yourself so they may spot areas of concern when helping you plan your financial future.
• If you attend a pre-retirement planning workshop, be sure to look for a reference to a resource or the law or regulation that backs up the information. Feel free to ask the presenter for references to the information presented when it may impact an important decision that you will make for your own retirement.
• Organizations such as the National Active and Retired Federal Employees Association have federal retirement specialists available to help members understand the value of their benefits through monthly live webinars, as well as an archived library of recent presentations, a monthly magazine and an email address to answer individual questions.
• Retirees with a Civil Service Active (CSA) number can contact the Office of Personnel Management by submitting a “help request” or writing or calling Customer Service team: contact OPM.
• Visit OPM's Federal Retirement Support Center.