Countdown to COLA

accrual. However, this means it is included in your “leave” service computation date (SCD) that is reported on your Leave & Earnings Statement and on your SF 50 Notification of Personnel Action statements.

The rules for crediting service toward leave are sometimes different from the rules for service credit under CSRS and FERS retirement. If you have performed civilian service that was not covered by FERS retirement deductions prior to January 1, 1989, you may elect to make a service credit deposit for this time so that it will be credited for both eligibility and computation of your retirement.

RETIREMENT CONTRIBUTIONS

QI currently have more than 42 years of service and my retirement coverage is CSRS. I understand that I have reached the maximum CSRS annuity benefit and I am wondering when will my withholding for CSRS retirement deductions stop from my biweekly salary payments?

AAs long as you continue to work, your agency is required to continue to withhold CSRS retirement contributions. Normally, total service of 41 years 11 months (excluding unused sick leave credit) produces the maximum annuity under CSRS. There is no maximum annuity under FERS.

This is determined once your retirement is finalized at the OPM. OPM will apply excess contributions to any deposit due for civilian service that was not subject to retirement deductions such as temporary service or seasonal employment and/or to any redeposit that may be due for refunded retirement contributions from service that ended on or after October 1, 1990. OPM will then refund the amount of excess deductions and interest.

At that time, you will be advised that you can return the amount to purchase additional retirement annuity. The additional annuity is computed in the same way as an employee who has made voluntary contributions under CSRS.

More information may be found in the CSRS and FERS Handbook, Chapter 50, Computation of the Annuity Under the General Formula: https://www.opm. gov/retirement-services/ publications-forms/csrsfershandbook/c050.pdf.

QI am preparing to retire and have requested a retirement estimate. I noticed that the estimate didn’t include all my service in the calculation of my retirement benefit. The retirement specialist in my agency’s human resources office has told me that some of my service is not “creditable.” I’ve worked for 30 years and now learn that four of my years do not count. What can I do? A Usually, retirement eligibility is based on service that was covered by FERS or CSRS retirement deductions. Under CSRS, the rules allow credit for service performed prior to 10/1/82, where no deductions were withheld.

The rules for FERS are different. If you have “nondeduction” service under FERS, this time is not creditable for retirement eligibility or computation of your FERS basic annuity benefit. This service will be included for leave accrual. However, this means it is included in your “leave” service computation date (SCD) that is reported on your Leave & Earnings Statement and on your SF 50 Notification of Personnel Action statements.

The rules for crediting service toward leave are sometimes different from the rules for service credit under CSRS and FERS retirement. If you have performed civilian service that was not covered by FERS retirement deductions prior to January 1, 1989, you

MONTH CPI-W Monthly % Change

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPIW) increased 1.57 percent in June 2022. To calculate the 2023 cost-of-living adjustment (COLA), the 2022 third- % Change quarter indices will from 253.412 be averaged and OCTOBER 2021 271.552 0.92 1.17 compared with the NOVEMBER 273.042 0.55 1.72 2021 third-quarter average of 268.421. DECEMBER 273.925 0.32 2.05 The percentage JANUARY 2022 276.296 0.87 2.93 increase determines FEBRUARY 278.943 0.96 3.92 the COLA. June’s index, MARCH 283.176 1.52 5.50 292.542, is up 8.99 APRIL 284.575 0.49 6.02 percent from the base. MAY 288.022 1.21 7.30 The CPI represents purchases of food and JUNE 292.542 1.57 8.99 beverages, housing, apparel, JULY 292.219 -0.11 8.87 transportation, medical AUGUST care, recreation, education and communication, and SEPTEMBER other goods and services. For FECA COLA updates, visit narfe.org and search for FECA.

may elect to make a service credit deposit for this time so that it will be credited for both eligibility and computation of your retirement.

Unfortunately, most civilian service performed after December 31, 1988, that was not subject to FERS retirement deductions is not creditable and there is no option available at this time to make a service credit deposit. One exception is for Peace Corps, AmeriCorps or Vista volunteer service that is creditable with a deposit. Also, all honorable, active military service is also creditable with a military service credit deposit.

You can find the recorded version of the recent webinar on deposits and redeposits at the NARFE Federal Benefits Institute. https://www. narfe.org/federal-benefitsinstitute/narfe-webinars/ webinar-archive/.

NARFE believes all federal work should be credited toward retirement calculations. Ask your Representative to cosponsor the Federal Retirement Fairness Act, H.R. 4268, introduced in 2021, which would allow federal employees to credit their temporary service performed after 1988 into their retirement calculations.

RETIREMENT

DEFERRED VS POSTPONED RETIREMENT

QI get confused with the difference between postponed and deferred annuity. Can you provide any insight?

AIt does get confusing, as the terms “postponed” and “deferred” are sometimes used interchangeably. First, let’s look at the rules for a deferred retirement. • CSRS: An employee who separates from service or transfers to a position that is not covered by the retirement system is entitled to a deferred annuity commencing at age 62 if they are not eligible for an immediate annuity within one month of separation and they meet the minimum civilian service requirement of five years of creditable civilian federal service. An “immediate” annuity is payable when you separate at age 55 with at least 30 years of creditable service, 60 with at least 20 years or at age 62 or later with a minimum of five years of service. CSRS employees must also meet the

“1-out-of-2” requirement of having service covered by CSRS retirement deductions one of the last two years preceding their separation. • FERS: You are eligible to receive a deferred retirement annuity if you are not eligible for an immediate annuity within one month of separation and you meet the minimum civilian service requirement of five years of service. The minimum requirement to apply for a deferred FERS retirement benefit is at age 62 with at least five years of creditable service or the Minimum Retirement Age (MRA) with at least 10 years’ creditable service. There is no

“1-out-of-2” requirement under

FERS. If the former employee has at least five years of civilian service, but less than 10 years of total creditable service, the deferred annuity commences on the first day of the month after the individual reaches age 62.

When a former employee with 10 or more years of service applies for a deferred annuity, they must designate a commencing date of annuity. The designated commencing date may be the first day of the month after the former employee attains the

MRA, or a date (must be first day of a month) within 90 days after the application is filed, but not later than the second day before the employee’s 62nd birthday.

An election of a commencing date becomes irrevocable on the day OPM authorizes the first regular annuity payment.

Under both CSRS and FERS, to be eligible for retirement, you must have a minimum of five years of creditable civilian service. If you took a refund of retirement deductions after separating from service (or transferring to a noncovered position), you would forfeit the deferred annuity benefit.

A “postponed” retirement is only available under FERS. The purpose of postponing your retirement is to avoid some or all of the age reduction that applies for employees under age 60 who wish to begin retirement with 10 to 29 years of service. The unreduced annuity is reduced by five-twelfths of 1 percent for each full month your annuity commencing date precedes your 62nd birthday. The reduction is 5 percent for each year you are under age 62. The reduction is permanent and does not stop when you reach age 62. A former employee who has not begun receiving MRA + 10 benefits may elect to have a postponed annuity begin on any date later than the first day of any month following separation from federal service, subject to the following conditions: • An election of a commencing date should be filed approximately 60 days before the designated commencing date, and must be elected on form RI 92-19 (Application for

Deferred or Postponed Annuity).

OPM will accept an informal written election that designates a specific commencing date, but the election must be ratified on form RI 92-19.

• The former employee may not elect a postponed commencing date that is earlier than the 31st day after the date the election is filed. • A postponed annuity cannot begin later than the second day before the employee’s 62nd birthday. • An election of a commencing date becomes irrevocable on the day OPM authorizes the first regular annuity payment.

If you are eligible for an MRA + 10 annuity upon separation, but decide to postpone the commencing date of annuity, then FEHB and FEGLI coverage terminates; you may elect to convert to individual insurance policies, and you also may elect temporary continuation of FEHB. When your postponed annuity begins, your FEGLI may be reinstated based on the coverage you had at separation and was eligible to continue into retirement. You may elect reduced FEGLI coverage during the adjudication of the annuity application. You may reenroll in the FEHB program if you met the usual requirements for continuing coverage into retirement at separation, and you may enroll in any FEHB plan or option you would be otherwise eligible.

Application for Deferred or Postponed Retirement under FERS, for RI 92-19, https://www.opm.gov/forms/ pdf_fill/ri92-19.pdf and FERS pamphlet https://www.opm. gov/retirement-services/ publications-forms/pamphlets/ ri92-19a.pdf.

CSRS employees eligible for a deferred retirement use OPM Form 1496a, Application for Deferred Retirement (CSRS): https://www.opm.gov/forms/ pdf_fill/opm1496a.pdf and may refer to the CSRS Pamphlet on deferred retirement: https:// www.opm.gov/retirementservices/publications-forms/ pamphlets/ri83-13.pdf.

NARFE’s Federal Benefits Institute has webinars members can watch to help prepare to apply for regular or a deferred retirement. To view them visit: https://www. narfe.org/federal-benefitsinstitute/narfe-webinars/ webinar-archive/.

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; or submit it by email to fedbenefits@narfe.org.

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