What You Should Do One Year from Federal Retirement

This column is the second in a series discussing how federal employees should be planning for their retirement if they plan to retire within the next five to 10 years. The first column presented strategic planning for retirement in five years.

This column presents what federal employees who intend to retire within one year should be doing to prepare for their retirement.

SEE ALSO:

• What You Should Do Five Years from Federal Retirement
• 10 Biggest Mistakes Federal Employees Make When Planning for Retirement (and How to Avoid Them)

Plans to Retire Within One Year

A federal employee who plans to retire within one year should:

1. Confirm when (that is, as of what year, month and day) he or she will be eligible to retire.

2. Decide on what date (year, month, day) he or she intends to tentatively retire from federal service.

3. Obtain information about all the retirement benefits to which he or she may be eligible to receive in retirement. These retirement benefits include the Thrift Savings Plan (TSP), Social Security, Foreign Service pension and a retirement from private industry (for example, a 401(k)-retirement plan), and Individual Retirement Accounts (IRAs). The employee should ideally have a fairly comprehensive picture of all sources of his or her retirement income and when each is payable.

4. Tell the employee’s supervisor about the proposed retirement date. This is done as a professional courtesy to allow for planning purposes to replace the retiring employee, and

5. Attend a pre-retirement counseling seminar or webinar.

Check Documentation in the Employee’s Official Personnel Folder

There are certain tasks the retiring employee is advised to perform during the year leading up to his or her retirement date. One task is checking to make sure that the following information is in the retiring employee’s Official Personnel Folder (OPF):

1. The beginning and ending dates for each period of federal employment which will be used in the CSRS or FERS annuity computation.

2. The effective dates for each promotion or within-grade increase during the period that will be needed in order to compute the high-three average salary.

3. The dates of pay changes or earnings and the pay rate during employment period when retirement deductions were not withheld from the employee’s salary.

4. The tour-of-duty (from the beginning date to the ending date) during any part-time employment and the total hours worked as a part-time employee.

5. A record of time actually worked during intermittent or “when actually employed” (WAE) service; and

6. Documentation of the dates of military service. If any service is not verified or any of the required information is missing, the employee should obtain assistance from his or her personnel or human resources officer.

Check Additional Employee Records

A retiring employee should review his or her designation of beneficiary for the lump-sum payment of retirement contributions, which is important when no one is eligible to receive a monthly survivor annuity benefit (CSRS or FERS). This designation is made on Standard Form 2808 (Designation of Beneficiary CSRS) for CSRS and CSRS Offset employees, and Standard Form 3102 (Designation of Beneficiary FERS) for FERS employees. If a copy is not available to review, then a new designation of beneficiary form should be filled out and submitted. It is also important to make sure that the designated beneficiary(s) is still living and has the same address as is stated on the originally filed beneficiary form.

If there is no designation of beneficiary, benefits will be paid in the following order: (1) Widow/widower; (2) Children in equal shares; (3) Parents in equal shares; (4) Appointed executor or administrator of one’s estate; and (5) Next of kin under the laws of the state the annuitant dies in at the time of death.

Check FEHB Health Benefits Records

An employee’s Personnel Folder should contain a record of all of an employee’s health benefits and registration changes. It is important that the records show a complete history of Federal Employee Health Benefits (FEHB) program insurance enrollment for the last five years of federal service. The last five years of service ending on the day the employee retires is especially important because the last five years of continuous FEHB enrolment will determine if the employee can retain FEHB program benefits throughout retirement.

Checking Life Insurance Records

Employees should check their OPF for their federal life insurance coverage (FEGLI). They may do so by checking Standard Form 2817 (Life Insurance Election). They should check their FEGLI designation of beneficiary form, Standard Form 2823 (Designation of Beneficiary FEGLI). It there is no designation of beneficiary, FEGLI life insurance benefits will be paid in the following order: (1) widow/widower; (2) children in equal shares; (3) parents in equal shares; (4) appointed executor or administrator of one’s estate; and (5) next of kin under the laws of the state the annuitant dies in at the time of death.

Paying a Deposit to Receive Retirement Credit for Military Service After 1956

An employee who had active-duty military service after 1956 can receive retirement credit for that active-duty military service if he or she makes a military deposit before the employee retires from federal service. A CSRS- or a FERS-covered employee must complete in full a military service deposit (including interest charges) before the employee stops working for the federal government.

An employee with prior active-duty military service should contact their Human Resources or Personnel Office to assist him or her in determining whether to make the deposit and how to make the deposit.

Paying a Deposit to Receive Retirement Credit for Temporary (Non-Deduction) Service

A CSRS employee or a FERS employee may be able to pay a deposit for temporary service in which no CSRS or FERS retirement contributions were deducted. In so doing, an employee will get credit for both eligibility to retire purposes and in the computation of the CSRS or FERS annuity. An employee who had such service should make a selection from the list of circumstances below which best describes his or her situation. The employee should then ask for assistance from their local Personnel Office because they have the employee’s employment records.

• Deposit services ending before October 1,1982 and covered by CSRS.

• Deposit service ending after September 30,1982 and covered by CSRS.

• Deposit service ending before January 1,1989 and covered by FERS, or

• Deposit service ending after December 31,1988 and covered by FERS.

Paying a Redeposit for Retirement Contributions that Were Refunded

A CSRS employee or a FERS employee who was initially in federal service and contributed to either CSRS or FERS retirement, then left federal service and withdrew their CSRS of FERS retirement contributions may be able to redeposit those retirement contributions. To do so, they must return to federal service. An employee who is eligible to make a redeposit should make a selection from the list of circumstances below which best describes their situation. The employee should then ask for assistance from their local Personnel Office because they have the employee’s employment records:

• Redeposit service at any time and covered by FERS.

• Redeposit service ending before March 1,1991 and covered by CSRS, or

• Redeposit service ending after February 28,1991 and covered by CSRS.

Making a Deposit or a Redeposit

Those employees who are covered by CSRS, including CSRS Offset employees, who want to make a deposit and/or a redeposit should do so by completing Standard Form 2803 (Application to Make Deposit or Redeposit). Those employees who are covered by FERS who want to make a deposit and/or a redeposit should do so by completing Standard Form 3108 (Application to Make Service Credit Payment). Employees who want to make a deposit/redeposit should submit their request no later than six months before the day they want to retire. All deposits and redeposits must be completed in full by the day the employee retires.

Verifying Retirement Eligibility and Choosing a Retirement Date

Employees who believe that they are eligible to retire from federal service within a year should confirm with their Personnel Office of Human Resources Office that they are eligible for immediate retirement. In particular, employees need to verify that they have the minimum amount of service and meet the minimum age requirement for retirement eligibility. A Personnel Office or Human Resources Office representative can also talk to the employee about the date a CSRS or FERS annuity can start based on the retirement date the employee chooses to retire.

Electing Survivor Benefit Options

A Personnel Office or Human Resources representative can assist a retiring employee in reviewing the survivor annuity benefit opportunity in order for the survivor annuitant receive a partial annuity after the death of a CSRS or FERS annuitant. A potential survivor annuitant includes a spouse, ex-spouse or another individual designated as having an insurable interest in the employee’s life. An insurable interest is defined as a relative closer in relationship than a first cousin. This includes a child, a sibling, or a parent.

It is important for married employees to note that in the event an employee chooses to not provide a survivor annuity benefit to his or her non-federal employee spouse, then upon the death of the annuitant, the surviving spouse will not be able to continue coverage under the Federal Employees Health Benefits (FEHB) program. Note that when making an election to provide a survivor annuity benefit after the death of the annuitant, a retiring employee must obtain the spouse’s written consent to provide less than maximum survivor annuity benefit allowed.