webcast retirement-basics october2014(v3) · retirement basics objectives participants will be able...
TRANSCRIPT
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Bureau of Indian EducationHuman Resources Office
2014
Retirement Basics
Objectives
Participants will be able to:
Describe the 3 retirement systems
Explain factors considered for retirement eligibility versus computation
Describe steps for retirement planning
Identify sources of information available for research
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Retirement Systems
Which retirement system are you in?
FICA – CSRS ‐ FERS
And what does it mean?
Retirement Systems
CSRS
1920
Social Security
1935
CSRS Interim
1984‐1986
FERS
1987
FERS‐RAE
2013
FERS‐FRAE
2014
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How can I tell what system I am covered by?
SF50B –Notification of Personnel Action
Leave & Earnings Statement
Retirement Systems
CSRS FERS7% to CSRS Fund .80% to FERS Fund
(3.1% for FERS‐RAE)(4.4% for FERS‐FRAE)
Social Security – 0%(unless CSRS Offset)
Social Security 6.2%
Medicare 1.45%
TSP – employee share (deferral limit $17,500 for 2014)
TSP – Gov’t share is 0 TSP‐Gov’t shareAgency Automatic 1%Match up to first 5%
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CSRS: Retirement Income
Retirement Income
CSRS Annuity
Thrift Savings
*CSRS Offset employees may have Social Security benefit
FERS: Retirement Income
Retirement Income
FERS Annuity
Thrift Savings
Social Security
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Types of Retirement
Optional or immediate voluntary
Disability – 2X paperwork
“Early Out” (OPM authority)
Discontinued Service – reduced age/service requirements
Deferred – no benefits, frozen Hi‐3
Retirement Eligibility
Contributing to retirement fund (being in “covered” position)
Years of Creditable Service (retirement Service Computation Date)
Age at Retirement
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CSRS: Age & Service Requirements
Must have at least 5 years of Federal Civilian service
1 of last 2 years under CSRS
Age & Service requirements
◦ 62 years of age & 5 years of service◦ 60 years of age & 20 years of service◦ 55 years of age & 30 years of service
FERS: Age & Service Requirements
Must have at least 5 years of civilian service
Age & Service requirements◦ 62 years of age & 5 years of service◦ 60 years of age & 20 years of service◦ Minimum Retirement Age (MRA)
& 30 years of service◦ MRA & 10 years of service(* reduction for being under age 62 – 5% per year)
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FERS: Minimum Retirement AgeIf you were born Your MRA is
Before 1948 55
In 1948 55 and 2 months
In 1949 55 and 4 months
In 1950 55 and 6 months
In 1951 55 and 8 months
In 1952 55 and 10 months
In 1953‐1964 56
In 1965 56 and 2 months
In 1966 56 and 4 months
In 1967 56 and 6 months
In 1968 56 and 8 months
In 1969 56 and 10 months
In 1970 and after 57
Data Scrub: Time Intensive Process
Service History◦ Review of Official Personnel Folder for creditable service
◦ Track down other periods of service (other OPFs)
◦ Check for part‐time or intermittent periods
◦ Check for correct coverage◦ Math…calculate service computation date (SCD)
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Data Scrub: Time Intensive Process
Benefits & other Factors◦ Current benefits and how long have had them
◦ Check with Office of Personnel Management (for deposit or redeposit time)
◦ Math…calculate salary
Creditable Service: What is it?
Periods of service ‐ viewed for
what makes you eligible to retire
Periods of service – consideredfor use in calculation of annuity
Retirement SCD
◦ Easily confused with Leave SCD
◦ Posted on Employee Benefits Statement (through Employee Express)
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Creditable Service: What is it?
Temporary time or FICA time◦ Work periods not covered by retirement contributions
◦ Referred to as “deposit time”
Military Service periods◦ Service covered under FICA◦ Research military earnings
◦ Regular service vs National Guard Refunded service◦ Withdrew retirement contributions and interest
Temporary Service
CSRS FERSPrior to 09/30/82 and no deposit
• Credit for eligibility• Credit for calculation• Reduction applies
Before 01/01/89, must make deposit to count for eligibility and calculation
After 10/01/82 and no deposit
• Credit for eligibility• NO credit for
calculation
After 12/31/88, no option to “buy back”
No credit for eligibilityNo credit for calculationCredit for Social Security benefits only
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Military Service (post‐1956)
CSRS FERSHonorable Discharge (member copy 4 of DD214)
If military retired pay, must be waived unless combat‐connecteddisability
7% Deposit Require 3% Deposit Required
Interest applies
Requires info from Defense Finance Accounting System (DFAS)
If hired before 10/01/82, no deposit required (re‐evaluate at age 62)If hired after 09/30/82, deposit required
No deposit, no credit
Refunded Service
CSRS FERSBefore 10/01/90 and no redeposit, credit for eligibility and apply actuarial reduction
Must be employed on or after 10/28/2009 to credit for eligibilityNo deposit required
After 09/30/90 and no redeposit, credit period for eligibility only
Credit for calculation when deposit made
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Unused Sick Leave
CAN NOT be used as part of hi‐3 period
CAN NOT add to years of service to meet eligibility
Used ONLY in calculation
What if I have prior service?
Please complete SF‐144 and submit to Servicing Human Resources Office
◦ Consolidate civilian records◦ Identify creditable service◦ Ensure correct retirement coverage
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Contract Year vs Calendar YearMore than 6 months of non‐pay periods in a calendar year is NOT creditable *
*Exceptions under OWCP or USERRA
May DecemberJanuary
Calendar Year 1
Calendar Year 2
August
January DecemberMay August
Annuity Calculation
Years of creditable service
Unused sick leave
Average 3 consecutive years of highest salary
◦ Normally last 3 years of service
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Annuity FormulaCSRS FERS
1.75% X hi‐3 salary X 5 years1.50% X hi‐3 salary X 5 years2.00% X hi‐3 salary X remainder years of service
1.00% X hi‐3 salary X years of service
Age 57 with 30years of service plus 2087 hours of unused sick leave. Her Hi‐3 salary is 30,000
1.75% X 30,000 X 5 =26251.50% X 30,000 X 5=22502.00% X 30,000 X 21=12,600Total = 17475Divide by 12 = 1456.25
1.00% X 30,000 X 31 = 9300
Total = 9300Divide by 12 = 775.00
Other Factors Can Affect Amount
Part‐time service
Federal Withholdings
Deposit time
Redeposit time
Survivor annuity ◦ How much to leave for spouse
◦ Election can affect FEHB coverage
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Other Factors Can Affect Amount Life insurance – have coverage in place 5 yrs. prior to retirement date (or earliest opportunity)
FEDVIP – Dental & Vision Insurance Program requires coordination for direct billing until annuity finalized/adjudicated
Health insurance – have coverage in place 5 yrs. prior to retirement date (or earliest opportunity)
Coordination of Medicare & FEHB coverage
FERS Special Supplement
For employees who retire with an immediate annuity before age 62. Calculated based on earnings and lasts only until age 62:
◦ MRA with 30 years of service
◦ Age 60 with 20 years of service
◦ “early out” or “involuntary” retirement
◦ Other special provisions for LEOs, FFs, ATCs
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Retirement Planning
What do I do?
Where do I start?
When should I start?
Retirement Planning
Understand your current benefits and ask questions
Gather information, read your statements:◦ Leave & Earnings◦ Social Security◦ Thrift Savings Plan
Understand the retirement requirements
Attend an in‐depth retirement training
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Retirement Planning
Submit a Request for Retirement Estimate◦ Available online www.bie.edu/hr
◦ Follow‐up with consultation session
Review your Official Personnel Folder◦ Check for all service periods
Recognize the life change Save money
Reorganize bills
Find hobby or other non‐Federal employment
Retirement Planning
Retirement Estimate Request◦ Takes about 4 hours to research/calculate◦ Schedule consultation (telephone or in‐person)
Consultation session◦ Review service history◦ Review estimate◦ Impact of Social Security and/or TSP◦ Timeline of process◦ Walk‐through of application (let us know to prepare an application – takes time too!)
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Online Research
Check out www.opm.gov/retire for more information on requirements
View Leave & Earnings statement and a Employee Benefits Summary statement
www.employeeexpress.gov
Review your electronic Official Personnel Folder (eOPF)
https://eopf.nbc.gov/doi/(must be on BIE network)
Online Research Request and view copy of Social Security statement
www.ssa.gov
Review or manage your TSP account
www.tsp.gov
1‐TSP‐YOU‐FRST (1‐877‐968‐3778)
