Questions & Answers

Q&A

EMPLOYMENT

THRIFT SAVINGS PLAN ONLINE ACCESS

QWhat do I do if I forget my Thrift Savings Plan (TSP) account number or user ID for online access to my account?

AIf you have forgotten your account number, you can use the following weblink to ask the TSP to send it to you: https://secure.tsp.gov/ tsp/forgottenAccount.html. For security reasons, the TSP cannot give you this number via email or over the telephone.

If you have forgotten your user ID but still have access to your account number, you can use your account number to access your account and then create another user ID. You can use your account number and user ID interchangeably to log in to your TSP account online.

THRIFT SAVINGS PLAN LOAN

QI’m thinking about separating from federal service later this year. Can I continue to repay my TSP loan after I separate? A When you leave federal service, you must repay your loan in full within 90 days after your agency reports your separation to the TSP. Your repayment must include any accrued interest on the outstanding principal balance. You will receive a notice from the TSP with repayment details after your agency notifies the TSP of your separation.

If you do not repay your outstanding loan balance in full, a distribution of the remaining balance amount of your loan will be declared as taxable income. You can roll the amount of the distribution into a traditional IRA or eligible employer plan within 60 days of it being declared to avoid taxes and penalties in accordance with Internal Revenue Code regulations.

You will not be able to make a post-separation withdrawal from your TSP account until your loan is closed by either payment in full or taxable distribution. For more details about the taxable distribution of an unpaid loan, refer to the tax notice, Important Tax Information About Payments From Your TSP Account: www. tsp.gov/publications/tsp-536.pdf.

THE FOLLOWING QUESTIONS

& ANSWERS were compiled by NARFE’s Federal Benefits Institute experts. NARFE does not provide legal, financial planning or tax advice or assistance.

FERS MRA + 10 RETIREMENT

QSomeone told me that if I reach my Federal Employees Retirement System (FERS) minimum retirement age (MRA), I could immediately retire from federal service with as little as 10 years of creditable federal service. Can you briefly explain that?

AOne of the immediate, voluntary retirement options under FERS includes an MRA + 10 option that allows you to apply for an immediate but reduced retirement if you have at least 10 years of creditable federal service and have reached your minimum

retirement age (MRA, ages 55–57, depending on your year of birth). The reduction equals 5 percent per year (one-twelfth of 5 percent for each month) that you are younger than age 62. To be eligible for an unreduced FERS retirement, you need to have at least 30 years of service at your MRA; 20 years of service at age 60; or at least five years at age 62.

Example: Age 57 with 15 years of service would provide a FERS retirement benefit that would be computed as follows: 15 years of service x 1 percent (FERS computation factor) x $80,000 (high-3 average salary) = $12,000/year FERS annuity, which would be reduced by 25 percent or $3,000 to $9,000/ year, which is a permanent reduction (five years under age 62 times 5 percent per year reduction) if the application for an immediate retirement was submitted at separation.

To avoid the age reduction for the MRA + 10 retirement, you can resign from federal service once you’ve met the MRA and have completed at least 10 years of creditable service and postpone applying for retirement. Around 60 days prior to your desired start date, you may write to the Office of Personnel Management (OPM) or file form RI 92-19 - “Application for Deferred or Postponed Retirement.” If you separated from federal service with at least 20 years but less than 30 years, you should apply for your unreduced, postponed FERS annuity about 60 days prior to reaching age 60. If you wish to avoid the age reduction but you had less than 20 years of service when you separated, then you must wait until age 62 to file for your benefit to completely avoid the age reduction. It is important to remember to file prior to the time when you wish for the benefit to begin to avoid missing out on receiving valuable benefits. There is no incentive for waiting to file for a deferred/postponed retirement past age 62. Of course, you could also avoid the reduction by continuing to stay employed longer and retire with an immediate, unreduced retirement.

There are exceptions to the age reduction for those who retire under special provisions for law enforcement officers, firefighters, air traffic controllers or certain other groups of employees, and for those who separate under disability retirement, Voluntary Early Retirement Authority (VERA) or a Discontinued Service Retirement (DSR). MRA + 10 is only available under FERS; there is no equivalent provision for the Civil Service Retirement System (CSRS). Q I am age 50 and I have 20 years of service. Would I be eligible to file for early retirement?

AOne of the immediate, voluntary retirement options under FERS includes an MRA + 10 option that allows you to apply for an immediate but reduced retirement if you have at least 10 years of creditable federal service and have reached your minimum. Although there is a type of early retirement, VERA, the only time you are eligible for this type of retirement is if your agency has authority to offer it and has specifically targeted your position as eligible. VERA is also referred to as “early out” retirement. VERA temporarily lowers the age and service requirements to increase the number of employees who are eligible for retirement during periods of substantial

COUNTDOWN TO COLA

MONTH CPI-W Monthly % Change

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPIW) increased 1.52 percent in March 2022. To calculate the 2023 cost-of-living adjustment (COLA), the 2022 thirdquarter indices will % Change be averaged and from 268.421 compared with the OCTOBER 2021 271.552 0.92 1.17 2021 third-quarter NOVEMBER 273.042 0.55 1.72 average of 268.421. DECEMBER 273.925 0.32 2.05 The percentage increase determines the JANUARY 2022 276.296 0.87 2.93 COLA. March’s index, FEBRUARY 278.943 0.96 3.92 283.176, is up 5.50 MARCH 283.176 1.52 5.50 percent from the base. APRIL The CPI represents MAY purchases of food and beverages, housing, apparel, JUNE transportation, medical care, JULY recreation, education and communication, and other AUGUST goods and services. SEPTEMBER

restructuring, reshaping, downsizing or reorganization. Sometimes, a VERA will include a Voluntary Separation Incentive Payment (VSIP), also known as a buyout. VSIP allows agencies that are downsizing or restructuring to offer employees lump-sum payments up to $25,000 (or the employee’s severance pay amount, whichever is less) as an incentive to voluntarily retire or resign. Some agencies have their own VSIP authorities and may have higher caps. It’s also important to note that except in limited circumstances, an individual who takes a VSIP must repay the entire amount if he or she returns to federal employment within five years of receiving the payment. To learn more about your retirement options, visit www.opm.gov/ retirement-services/.

RETIREMENT

CSRS SURVIVOR BENEFIT AND SOCIAL SECURITY

QI’m a retired CSRS employee whose spouse earned a Social Security retirement benefit based on her own work record. When I retired, I elected the maximum survivor benefit for her. If I predecease my spouse, will her Social Security benefit be reduced when she begins to receive her CSRS spousal survivor benefit?

AThe Social Security benefit that your spouse earned based on her own work record will not be affected by the survivor benefit that she might receive based on your CSRS retirement. However, if your wife predeceases you, your entitlement to widows benefits based on her Social Security benefit will be offset by two-thirds of your CSRS retirement due to the Government Pension Offset (GPO). The GPO impacts an individual who receives a retirement or disability pension from a federal, state or local government based on your own work for which you didn’t pay Social Security taxes. The two-thirds offset often eliminates the spousal or widows benefit entitlement from Social Security.

CHANGE OF ADDRESS WITH SOCIAL SECURITY

QHow can I change my address with Social Security?

AIf you receive Social Security benefits (retirement, survivors or disability) or are enrolled in Medicare, you can change your address online using your “my Social Security” account. First log in at www.ssa.gov/myaccount/, then go to the “My Profile” tab and update your information. This service is not currently available to people who receive Supplemental Security Income (SSI) or who do not have a U.S. mailing address. However, if you are receiving SSI, you can still check the address Social Security has on record via the My Profile tab. You may also call Social Security at 1-800-772-1213 (TTY 1-800-325-0778), Monday through Friday, from 7 a.m. to 7 p.m., or contact your local Social Security office.

FEHB AND TRICARE

QI’m retired from federal civil service and my husband, who is retired from military service, is under my Federal Employees Health Benefits (FEHB) plan. He recently turned age 65 and is enrolled in Medicare Parts A and B along with TRICARE For Life (TFL) through his military service. He no longer needs coverage under my FEHB plan. How can I suspend his coverage under my FEHB plan?

ARetirees are not able to suspend the FEHB coverage on a spouse unless the coverage is suspended for the retiree as well. One option to avoid paying for FEHB coverage for your spouse would be to change to a Self Only enrollment under FEHB. This change can be made at any time and does not require a qualifying life event (QLE). Changing your enrollment from Self Only back to Self Plus One, however, does require that the change be made during the annual Open Season or be due to a QLE. Be aware that if you predecease your spouse and you were enrolled in a Self Only FEHB plan on your date of death, your husband would never be able to reenroll in FEHB as a surviving spouse. It might be a better option to wait until you are both enrolled in Medicare Parts A and B along with TFL and then suspend your enrollment in FEHB. You may suspend FEHB coverage to use TRICARE, TRICARE For Life, Medicare Advantage, Peace Corps or CHAMPVA. Use form RI 79-9 - “Health Benefits Suspension/ Cancellation Confirmation,” or form OPM 2809 - “Health Benefits Election Form.”

QI recently retired and have enrolled in Medicare Parts A and B along with maintaining my FEHB coverage. Which coverage will pay first for my health care expenses?

AOnce you have retired and are enrolled in Medicare Part A (hospital insurance) and Part B (doctors or outpatient insurance), Medicare will be the primary payer for both inpatient and outpatient services.

The insurance that pays first (primary payer) pays up to the limits of its coverage. The one that pays second (secondary payer) only pays if there are costs the first payer didn’t cover. The secondary payer (which could be Medicare) might not pay all the uncovered costs. You can find more information about who pays first at www. medicare.gov/supplementsother-insurance/how-medicareworks-with-other-insurance.

It is important that you communicate your retirement and Medicare coverage to the following places to be sure that there is no confusion when your bills for medical services are being coordinated: 1. Your medical providers need to know that they should now bill Medicare first and the claim will be coordinated with your secondary payer through Medicare. Let your providers know when you have retired and are covered by Medicare and any other health insurance, including

FEHB, military health care or another employer health plan. 2.Call the Medicare Benefits

Coordination and Recovery

Center (BCRC) to update your insurance coordination of benefits information.

BCRC customer service representatives are available to assist you Monday through

Friday, from 8 a.m. to 8 p.m.

ET, except holidays, at tollfree lines: 1-855-798-2627 (TTY/TDD: 1-855-797-2627 for the hearing and speech impaired). 3.You must tell your FEHB plan if you or a covered family member has Medicare coverage, and let your plan obtain information about services denied or paid under

Medicare if it asks. You must also tell your FEHB plan about other coverage you or your covered family members may have, as this coverage may affect the primary/secondary status of your FEHB plan and

Medicare.

To obtain an answer to a federal benefits question, NARFE members should call 800-456-8410 and select option 2 for the Federal Benefits Institute; send the question by postal mail to NARFE Headquarters, ATTN: Federal Benefits, 606 North Washington St., Alexandria VA 22314-1914; or submit it by email to fedbenefits@narfe.org.

Prepare for Retirement with NARFE

UPCOMING WEBINARS:

WEDNESDAY, JUNE 8, 2 P.M. ET

Understanding FERS Deferred/

Postponed Retirement Options

NEW!

—Presented by Tammy Flanagan

THURSDAY, JULY 7, 2 P.M. ET

Understanding Military and Civilian

Federal Service Credit

—Presented by Tammy Flanagan

Online Q&A sessions follow each webinar. For details and to register, visit NARFE.org/Institute.

NARFE FEDERAL BENEFITS INSTITUTE

Questions? Members can call 800-456-8410 x2 or email NARFE’s federal benefits specialists at fedbenefits@narfe.org. Not a member? Join NARFE today at NARFE.org/Join.