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Your Federal Employee Benefits

Your Federal Employee Benefits. Civil Service Retirement System Benefits. Federal Benefits Specialist. Instructor: Mark Smith 3619 Atrium Peak San Antonio, Texas 78261 Tel: (210) 497-0900 Fax: (210) 497-2148 Cell: (210) 394-1489 marksmith@sammonsrep.com

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Your Federal Employee Benefits

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  1. Your Federal Employee Benefits Federal Benefits Specialist

  2. Civil Service Retirement System Benefits Federal Benefits Specialist

  3. Federal Benefits Specialist Instructor: Mark Smith 3619 Atrium Peak San Antonio, Texas 78261 Tel: (210) 497-0900 Fax: (210) 497-2148 Cell: (210) 394-1489 marksmith@sammonsrep.com www.federalbenefitsspecialist.com Federal Benefits Specialist

  4. Licensed registered representative in the state of Texas. • Mark Smith offers securities through Sammons Securities Co.®, LLC, member FINRA/SIPC. • This is not intended to be a sales seminar. The purpose of this seminar is to educate and provide you with general information on Federal Benefits. • There is no obligation to schedule an appointment or purchase a product. Federal Benefits Specialist

  5. Federal Retirement Presentation Disclaimer • The following seminar is presented using a generic approach • Without individual knowledge of each participant, I am unable to individualize this presentation • Please accept the information in a general context and apply what you feel fits your particular needs • Thank you for your understanding Federal Benefits Specialist

  6. FEGLI FEHB DEPOSIT REDEPOSIT POST-56 MILITARY SERVICE RETIREMENT CSRS, & CSRS OFFSET TSP RETIREMENT DECISIONS FEHB Federal Benefits Specialist

  7. CSRS Annuity A Lifetime Annuity Benefit Defined Benefit Pension If you retire at a certain age with a certain number of years of creditable service, you will receive a % of your Hi-3 for the rest of your life. Federal Benefits Specialist

  8. Length of Service High 3 Determine Your Basic Retirement Benefit 1-10 Formula Retirement Benefit (CSRS, CSRS Offset, FERS) Federal Benefits Specialist

  9. Civil Service Retirement SystemCSRS • Deductions: • 7.00% Regular Employees • 7.50% Employees under Special Provisions (LEO,ATC & FF) CSRS Offset: • Covered by both Social Security & CSRS • Contribution is the difference between: • Full CSRS & Social Security Tax (Social Security 6.2%, CSRS .80%) Federal Benefits Specialist

  10. RETIREMENT REQUIREMENTS Type? EARLY AGE Optional Federal Benefits Specialist

  11. CSRS Eligibility • Two Minimum Requirements: • Five years of civilian services required • One year out of the last two years under CSRS If for disability, one out of two years requirement is waived Federal Benefits Specialist

  12. Retire Eligibility CSRS • Regular No Age Reduction: • Age 55 with 30 Years • Age 60 with 20 Years • Age 62 with 5 Years • Optional Early Out: • Any Age with 25 Years • Age 50 with 20 Years • Reduction of 1/6 of 1% for each full month (2% per year) Employee Under 55 Federal Benefits Specialist

  13. Creditable Civilian ServiceCSRS • Time between appointment & separation where contributions were made to the retirement system • Leave without pay (Up to 6 months calendar year) • Worker’s Compensation (Returns to work) • Part Time Service: • Prior 4/7/86 • Full Credit for Eligibility & Annuity Calculation • On/After 4/7/86 • Full Credit for Eligibility • Prorated Credit for Annuity Computation • Breaks up to 3 days • Military/Deposits/Redeposits Federal Benefits Specialist

  14. What creditable service does not count in the computation process? • Civilian service performed on or after 10/1/1982 for which deposits were not made into the CSRS. • Civilian service ending on or after 03/01/1991 for which deposits were withdrawn and not repaid. Note:this service is eligible for credit (RSCD) but not in the computation process Federal Benefits Specialist

  15. Is there creditable service that counts, but not at full value? • Non-deposit civilian service performed before 10/1/1982. The annuity will be “discounted” by 10% per year of whatever is owed (principal and interest) • Deposit civilian service which ended before 03/01/1991, for which retirement dollars were withdrawn and not repaid will be “discounted” on an actuarial basis Federal Benefits Specialist

  16. Interest? • Deposits covering employment on or after October 1, 1982, and refunds applied for on or after that date, are subject to an interest rate of 3% per year through December 31, 1984. Thereafter, annual interest rate is variable. Federal Benefits Specialist

  17. 1985: 13% 1986: 11.125% 1987: 9% 1988: 8.375% 1989: 9.125% 1990: 8.75% 1991: 8.625% 1992: 8.125% 1993: 7.125% 1994: 6.25% 1995: 7% 1996: 6.875% 1997: 6.875% 1998: 6.75% 1999: 5.75% 2000: 5.875% 2001: 6.375% 2002: 5.5% 2003: 5% 2004: 3.875% 2005: 4.375% 2006: 4.125% 2007: 4.875% 2008: 4.75% 2009: 3.875% 2010: Variable interest rates?Interest is compounded annually Federal Benefits Specialist

  18. What is creditable military service? Honorable active duty • Army • Navy • Air Force • Marine Corps • Coast Guard • Public Health Service (after 06/30/60) • Commissioned officer of the National Oceanic & Atmospheric Administration (after 06/30/61) Federal Benefits Specialist

  19. CSRS & Military Service • There is no deposit required for military service performed before 1/1/1957. (If this service is used for CSRS, it might not be creditable for social security.) • If you first entered civilian federal service before 10/1/1982, military service performed on or after 1/1/1957 is creditable without a deposit into the CSRS subject to “Catch 62” conditions. Federal Benefits Specialist

  20. And if you first entered federal service on or after 10/1/1982 • If you first entered federal civilian service on or after 10/1/1982, no military service is creditable unless you make a deposit into the CSRS. Federal Benefits Specialist

  21. MILITARY DEPOSIT CSRS Federal Benefits Specialist

  22. Catch 62 • OPM will check and see if you are eligible for Social Security one time at age 62 if retiring prior to age 62. • If you retire after age 62 OPM will check if you are eligible for Social Security at retirement. Federal Benefits Specialist

  23. How do I find out what my military deposit amounts to? • Complete an RI 20-97 • Attach copy of DD 214 • And fax or mail to the appropriate branch • Active duty time while Reservists/National Guard need to contact the Service Verification Office (800) 525-0102 Federal Benefits Specialist

  24. How much will it cost me? • Prior to 1 January 1999, the deposit equals 7% of base pay. • During 1999, the deposit 7.25% • During 2000, the deposit 7.40% • After 31 December 2000, the deposit returns to 7% • Plus interest FERS-Upon entering federal service CSRS-10/01/1986 Federal Benefits Specialist

  25. Creditable Civilian Service CSRS Unused Sick Leave applies only to CSRS, CSRS offset & FERS Transferees employees Federal Benefits Specialist

  26. Other Creditable ServiceCSRS CSRS and CSRS Offset Unlimited unused sick leave Federal Benefits Specialist

  27. Federal Benefits Specialist

  28. High-3 Average Salary CSRS • Averaging over any period of three consecutive years of creditable service • Basic does not include: • Bonuses • Any Overtime Pay • Military Pay • Cash Awards • Holiday Pay - as a worked holiday • Travel Pay Outside Regular Tour of Duty • Does include locality pay in 48 contiguous states Federal Benefits Specialist

  29. Hi-3 Average Pay CSRS Basic Pay Includes: • Night differential pay for wage grade employees • Environmental differential pay for wage grade • Administrative Uncontrolled Overtime (AUO)(Law Enforcement) • Law Enforcement Availability Pay (LEAP) Federal Benefits Specialist

  30. Computation of Annuity CSRS • HI-3 average salary $47,654.94 • Years of Service 32 years 9 months • Regular Formula: • 1.50% x $47,654.94 = $714.82 x 5 years = $3,574.10 • 1.75% x $47,654.94 = $833.96 x 5 years = $4,169.80 • 2.00% x $47,654.94 = $953.10 x 22.75years=$21,683.03 • Basic Annuity = $29,426.93 • Monthly: $29,426.93 divided by 12 months = $2,452.24 rounded down to $2,452 Federal Benefits Specialist

  31. Is there a limit on the amount of annuity I may receive? • The maximum annuity is 80% of your “High 3” average pay • 80% represents 41 years and 11 months of creditable service. This 80% figure may be increased by the value of your unused sick leave • If you have more than 41 years and 11months of creditable service (excluding sick leave), the excess and unused deposits will be refunded to you, applied to re-deposits, or applied to a voluntary contribution to purchase additional annuity. $7.00 year for each $100 plus .20 cents for each year over the age of 55. Federal Benefits Specialist

  32. CSRS Offset CSRS rehired on or after 1/1/84 Federal Benefits Specialist

  33. CSRS Offset • Social Security Amendments of 1983: • All employees hired by government after 12/31/83 will be covered by Social Security • CSRS employees with a break in service of more than 365 days • Five years under CSRS prior to 1/1/84 • Rehired after 12/31/83 Federal Benefits Specialist

  34. CSRS Offset Contributions • 7.00% of pay divided between CSRS & Social Security • Regular CSRS • CSRS receives .80% • Social Security receives 6.2% • Special Provisions • 1.30% CSRS • 6.20% Social Security • Entitlement: • Same as other CSRS until Age 62 • Benefits reduced by Social Security Benefits (If eligible) • Not effected by the GPO Federal Benefits Specialist

  35. CSRS Offset Computation of Annuity: • HI-3 Average Salary and Length of Service same as regular CSRS • If eligible for Social Security, annuity reduced by Social Security earned in federal service • If covered under Social Security in private sector, reduction will generally be less than Social Security Benefit Federal Benefits Specialist

  36. CSRS Offset • Computation of Annuity: • Offset reduction will be the lesser of: • The difference between the Soc. Sec. monthly benefit amount with and without CSRS-Offset service (service after 12/31/83) or • By dividing the total years of offset service by 40 x total social security benefit Federal Benefits Specialist

  37. Offset Example The following example shows how the offset would be computed for an employee with three years and eight months of Offset service. Federal Benefits Specialist

  38. Example: • First Computation: • Soc. Sec. mo. Benefit with federal months of Offset service =$600; • Soc. Sec. mo. Benefit without federal Offset service =$550; • The difference is $50. • Second Computation: • Soc. Sec. amount federal earnings =$600 X 4 (the years of offset service rounded whole year) =$2400 divided by 40 =$60. Federal Benefits Specialist

  39. Explanation of Offset • Since the offset is determined by taking the lesser amount of the two computations, the reduction in this case would be based on the first computation method or $50. Federal Benefits Specialist

  40. CSRS Survivor Benefits At retirement: • Former spouse with court order • Current spouse Federal Benefits Specialist

  41. Survivor Benefits CSRS If married at retirement: • Former Spouse with Divorce Decree or • Current Spouse: • Full survivor Annuity for Current Spouse • Less than full or no survivor with consent of Spouse • Combination Current/Former Spouse Annuity with consent of Current Spouse • Insurable Interest • If no Survivor Annuity is provided for Spouse at time of retirement and Annuitant pre-deceases Spouse, Spouse will not be allowed to continue Health Insurance Federal Benefits Specialist

  42. CSRS Survivor Benefits • Reduced Annuity Maximum Benefits: • Basic Annuity $24,000 • 2 1/2% X $3,600 = $90 • $24,000 - $3,600 = $20,400 X 10% = $2,040 • Reduction: $24,000 - $2,130 = $21,870 • Survivor Annuity: • 55% X $24,000 = $13,200 • Reduced Annuity Lesser Benefits: • $12,000 Base (50% of $24,000) • 2 1/2% X $3,600 = $90 • $12,000 - $3,600 = $8,400 X 10% = $840 • $24,000 - $930 = $23,070 • Survivor: • 55% X $12,000 = $6,600 Federal Benefits Specialist

  43. Insurable Interest CSRS Someone the day you retire who is substantially, financially dependent on you, other than minor children, closer then first cousin. Fiancé or common law marriage if your state recognizes common law marriage (You must be healthy) Age Reduction (age difference between you and the person you name) Older, Same Age, or 5 Years Younger 10% 5 Less Than 10 Years 15% 10 Less Than 15 Years 20% 15 Less Than 20 Years 25% 20 Less Than 25 Years 30% 25 Less Than 30 Years 35% 30 or More Years Younger 40% Federal Benefits Specialist

  44. Notice!! • 55% of basic annuity is the maximum benefit payable • Former spousal benefits take precedent over benefits payable to current spouse Example: Basic annuity = $24,000 per year 55% of basic annuity = $13,200 per year Former spouse awarded 50% of basic SSB equal to $12,000 Current spouse, therefore, is entitled to the difference of $1,200 per year Federal Benefits Specialist

  45. CSRSCost of Living Adjustments Consumer Price Index Federal Benefits Specialist

  46. CSRS COLA • Effective 12/1 Each Year • The Percentage Change in the Consumer Price Index • Retirees Receive 1/12 of the COLA for Each Month they are on the Annuity Payroll to 12/1 Federal Benefits Specialist

  47. The Best Day to Retire Best Day for CSRS Employees • Discontinued Service and Disability – annuity begins next day • Disability – better of date after separation or last day of pay • Deferred – annuity begins on 62nd birthday for CSRS; for FERS 1st day of month after 62nd birthday or MRA (with 10 yrs or more) Another option Federal Benefits Specialist

  48. OPM Contacts • General Telephone Inquiries: • 202-606-0551 • 888-767-6738 • 800-878-5707 TTD • US Office of Personnel Management Retirement Operations Center Boyers, PA. 16017 • 202-606-0500 • 888-767-6738 • www.opm.gov Federal Benefits Specialist

  49. Useful Websites • CSRS/FERS www.opm.gov • FEHB www.opm.gov/insure/health • FEDVIP www.opm.gov/insure/dentalvision • FEGLI www.opm.gov/insure/life • Social Security www.ssa.gov • Medicare www.medicare.gov • TSP www.tsp.gov • FLTCIP www.ltcfeds.com • FSA www.fsafeds.com • Tax Issues www.irs.gov Federal Benefits Specialist

  50. Questions & Answers Federal Benefits Specialist

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