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Information on this page is provided by Roseanne Jefferson.
Roseanne is a retired USPS employee with an extensive background in USPS
retirement, disability retirement, OWCP, EEO, Labor Relations and HR.
She conducts individual and group counseling and is able to
comprehensively discuss the pros and cons of employees who are on OWCP,
disability retirement and regular retirement. Roseanne will be happy
to answer your postal retirement questions. Contact Roseanne at
roseanne.jefferson@yahoo.com. |
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Postal Retirement
Q&A August 2012 |
Good Day Postal Employees:
Yesterday on MSNBC news show,
"Morning Joe", the panel was
discussing the financial problems of
the US Postal Service and the "issue
of the day" was their inability to pay
5.5 billion to OPM tomorrow and 5.6
billion in September. The statement
made was that the money was "for
future postal employees health
benefits". In reality it is the Postal
Service's contribution for their
postal retirees health benefits... "10
years in advance". As an example, if
you have BCBS Family 105, your premium
(in 2012) as a retiree is $430.04 per
month. Sounds high, doesn't it? Not
really. The actual premium for BCBS
105 is $1,327.80 per month. The post
office's portion is $897.76 per month.
And so, the month after you retire,
the post office has to pay
$107,731.12!!! Why? Because the post
office is required to pay their
retirees health benefit premiums 10
years in advance. (897.76 x 12 months
x 10 years = $107,731.12).
They
addressed that President Lincoln's
first job was at the post office. They
went on to say that as an
organization, we are losing 25 million
dollars a day. They discussed that "in
the day" "the post office was the
center of cultural life"; "time and
technology seems to be passing the
post office by"; "the post office is
facing extinction"; "their employees
have outrageously high retirements and
health benefits"; "is the post office
worth saving?"; "FedEx came in and
used SOPHISTICATED TECHNOLOGY" that
changed how the phrase overnight is
interpreted. These are harsh and
disturbing statements, but seem to be
on target. One of the panel members
discussed should the post office be
viewed "for the public good" or
"social function" meaning societal.
NO ONE ON THE PANEL EVER DISCUSSED
THE FACT THAT WE WERE NOT ALWAYS LIKE
THIS!!! And by that I mean, the public
as a whole, really does not understand
that we are the only federal agency
that is REQUIRED to make a profit,
because we, although are a government
agency, we are not working with funds
from the public, via taxes. We are
funded by the products we sell and the
services we provide. What do you think
the percentage is of your average
American, not us, not postal
employees, just the everyday person
living in the US, knows that we are
the ONLY federal agency NOT funded by
tax dollars??? Hardly any!! They may
have heard it, but truly don't
understand it. They bitch and complain
when the stamp rate increases, but
don't understand that at the end of
the day, you are paying very "little"
to get a letter across town, across
the country, or across the ocean.
This will probably generate a lot
of "chatter", but you know, if WE are
worth saving, then perhaps
conversations could be started with
the Postal Service going back to what
they were before, which was the U.S.
Post Office...funded by tax dollars,
not required to make a profit, because
then we would be just like every other
federal agency, a social agency. When
we go to the airport, are we required
to pay TSA upfront before we fly, for
them to "feel us up"? Are we required
to pay the IRS to "figure out" what we
"owe" them? That is one idea.
The other idea, change how we operate
as an organization. Three shifts could
be reduced to one or two. The fact
that a great percent of our employees
work Tour 1, and when looking at the
accident rate and HOW MANY ARE ON THE
OWCP ROLLS!!, from injuries sustained
at work, could be viewed that working
tour 1 goes against the internal body
clock. The human body is designed to
sleep when it is dark, and be up when
it is light...period. Oh, you can get
used to it, people get used to
anything. Getting used to it doesn't
mean that it won't have a negative
effect on your overall health and well
being. Yea, I know, tour 1 gets Night
Differential and while I am on the
subject, they need to get rid of their
Sunday premium pay too..
THE
ABOVE IS JUST MY OPINION - IF YOU
DISAGREE, THAT IS OK, ITS JUST FROM
YEARS OF BEING IN THE SYSTEM AND
KNOWING HOW IT OPERATES...I'M JUST
SAYIN!!
Q 1.Hi Roseanne,
If you have a tsp loan and you are
retiring .What happens to the loan? Do
you need to pay it off or what ? Thank
you for your help.
A. 1. If
you are going to retire with an
outstanding loan with TSP, you can
believe it is going to COST YOU if you
don't pay if off prior to retirement.
When I say cost you, do this...call
the TSP office and ask what effect
your not paying off your loan prior to
retirement and find out how much you
will have to pay back. I tell you this
because as an EXAMPLE ONLY!! If I had
200,000 in TSP and I took out 50,000
(have paid back 15,000. & owe 35,000.)
and then decided to retire:
1.
The total amount of the money in TSP
is a combination of what YOU HAD
DEDUCTED FROM YOUR PAYCHECK (whatever
percentage you selected), THE MATCHING
FUNDS THE PO CONTRIBUTED, AND THEN
INTEREST OF THAT MONEY.
2. You
have not EVER paid any TAX on any of
that money, and your tax liability is
going to be outrageous! If you owe 35,
and borrowed 50, you still OWE the
money (35,000) and still owe the taxes
on 15, you paid back...
I don't
have access to anyone's records but I
think this compels you to be proactive
before you make a decision you may not
financially want to live with.
Roseanne
Q 2. -Hi, Roseanne. I
REALLY look forward to reading your
column each month. Please keep up the
great work. Here's my problem: I am
CSRS with 33 years service and would
like to retire 12/31/12. In looking
over my Retirement Annuity Estimate I
find that during the period
11/20/79-12/28/79 (casual employee)
and 3/8/80-7/24/81 (rural carrier sub)
my CSRS retirement contributions are
listed as "N" under the "Funded"
column. This is a total of 1 year 5
months and 26 days. If I am reading
the OPM website correctly, I must
apply to make a deposit to cover the
lacking retirement funds (Form 2803)
or my pension will be permanently
reduced. It also says that if I intend
to retire within six months, I should
not apply for deposit. I am at a loss
here. Is there any way to determine
how much money I might have to pay?
How much will my monthly retirement be
reduced if I elect not to make this
deposit? And do I need to postpone my
retirement date until this is settled?
Thanks so much for your time and help.
TM
A 2. -Hi TM, If you want my
opinion...1 1/2 years is not enough of
an increase to begin the payback. The
interest alone would take you 8-10
years to recover and the increase to
the check is ONLY...1.75%. Why bother.
Your annuity is not going to be
reduced...your annuity statement is
correct, because if validates that "N"
as not being funded.
As far as
determining how much. You would need
to find your earnings for those
non-credible years (Total amount
earned), then take 7% of that figure
and that would be your deposit to even
start the buy back. THEN that figure
has interest applied compounded daily
for the LAST 30+ years. My
opinion...don't bother it's not worth
it. Roseanne
R 2. Roseanne,
Thanks so much for your lightning-fast
answer to my question. Did you ever
consider running for President? I
would vote for you in a heartbeat.
Thanks again. TM
RA
2.Wow!...No, never thought of it...I
sort of like staying under the
radar...it makes it easy to stay pure
and not be swayed by any
"organizational issues" to distort or
not fully explain how rules and regs
should be applied as it relates to
Human Resources and retirement. You
are welcome ! Roseanne
NUMBER 3
is a series of Q/A's:
Q. Hi
Roseanne, Just need one quick
clarification on the supplement,
please. If I go on a Vera and am not
56 yet which is my minimum retirement
age. If I went on a Vera at 53 with 28
years in the p.o. My supplement will
then start when I reach 56. Correct?
If I had 25 years in at 56 and I
retired under a Vera at 56 would my
supplement begin at 56 or 60? Because
supplement states I must be 56 with 30
years, under a Vera do you still need
to meet both qualifications to receive
the supplement. Thanks. PB
A.
Hi Paula, Under VERA rules if you are
offered an early out VERA (and are not
yet at your MRA) you will get the
supplement when you reach your MRA.
Let me quote straight out of the
FERS retirement manual....
"If
your agency offers you an early
optional retirement, you may retire if
you meet the age and service
requirements (Age 50 with at least 20
years of service) or (Any age with 25
years or more of service). You must
retire within the time frames
specified in the early out retirement
offer. Agencies may grant permission
to offer early retirements by OPM if
agency is undergoing a major reduction
in workforce, reorganization, or
transfer of function. The CSRS portion
of the CSRS/FERS Transfer annuity
benefit is reduced by 2% for each year
that you are under age 55 on date of
retirement. The FERS portion of the
annuity is NOT reduced. Special
Supplements are not payable until you
reach your MRA. Special retirement
supplements are subject to Social
Security earnings." Roseanne
R.Hi Roseanne, Thanks for your info. I
am having trouble believing that my
friend may get to retire with me
because she will receive the
supplement too if a vera or vsip is
offered. My friend was born in 1959
like me and our mra is 56. She has
five less years of service than I do.
If we retire under a vera at 55 or
sooner both of us will collect our
supplement when we turn 56. Her
supplement will be a little less but
she will be collecting it for about
six years like i will, until 62. So by
her leaving early she is gaining
around 60,000 dollars (33x25 years of
service=825.00 a month x 12from 9,900
a year x 6 years= 60,400) compared to
just collecting for 2 years at 60
years of age. Are there any penalties
toward social security if she
collected an early supplement
supplement? Thanks again, I just do
not want to get her hopes up and it
not be true. PB
My Response: Hi
PB, Yes if you both are 53, and you
have 27 yrs and she has 22/23 years
you are both eligible for the early
out. If you are FERS, the criteria is:
At least 50, with 20 years of service
OR 25 years of service at any age.
That is the criteria period.
There is no "reduction" anywhere for
the Special Supplement. Your special
supplement would be more than the
co-worker you speak of, just as your
FERS annuity would be more than your
co-worker. YOU would receive 27% of
your high 3 average salary, divided by
12. Your co-worker would receive 23%
of the high 3 average salary, divided
by 12. You would received around
$890.00 per month ($33. x 27yrs) as
the Spec Supplement; Your co-worker
would receive around $$760.00 per
month ($33. X 23) as the Spec
Supplement. I hope this has helped
clear up this issue for you. Roseanne
PB Response: Thanks so much
Roseanne, So if my friend can go
financially speaking, it really is
advantageous for her since the post
office or opm will be paying her the
special supplement from the time she
reaches her mra (56) until the age of
62. When I reach 56 I will have my 30
years in service so I never thought
much about it both coincided.
Everyone is planning for retirement
and another question came up. If you
take a lot of leave without pay your
pension will be reduced. I told them
not really unless you exceed 6 months
in a calendar year otherwise your
pension is based on your base salary
excluding overtime & premiums. In
calculating number of years I think if
you begin in august - Dec the year is
not counted. And if you retire in Jan
- June the months are not counted
toward retirement. Is this true? And
for both fers & csrs? Sorry for all of
the questions but you are the only one
we really trust at work. Thanks for
all of your time and effort. PB
My Final Response: Hi PB, Well
thank you for the faith everyone has
in me. If you have LWOP you are
correct. The effect is only after 6mo
in each calendar year. As far as your
federal time and how it is calculated
in the retirement figures...you are
paid for total years and total months
and yes even total days. This is true
for both CSRS and FERS. Now the only
way for this statement to be untrue,
would be if you retired on Sept 15th,
and your annuity begins Oct 1, you are
not paid from Sept 16 thru Sept 30 on
either a paycheck or an annuity...this
is just to be clear. Roseanne
Q
4.Roseanne,Just read your June 2012
Q&A.. So you're saying one can start
withdrawing from your TSP at say 54
years old provided you are retired and
not have to pay the 10% early
withdrawal penalty? And you don't have
to purchase an annuity, you can just
for example tell them to send you
$500.00 a month? Is that correct?
Thank, PY
A 4. Hi PY, I you are
offered an early out and you do
retire, you will look in the TSP
booklet TSPBK02; on page 11, How your
Annuity is Taxed: let me quote this
for you
"FOR FERS or CSRS TSP
accounts. Taxes on all contributions
to your TSP account and the earnings
on those contributions are deferred
until the money is paid to you.
Therefore, your TSP annuity payments
will be taxed as ordinary income in
the years when you receive them.
However, these annuity payments are
NOT subject to the IRS early
withdrawal penalty, even if you are
under age 55 when they begin."
Roseanne
R 4. Yes but I still
believe it refers to purchasing an
Annuity with your TSP money and not
just withdrawing some each month on
your own from your account.
Don't
you think?
Final 4 Response:
But I was totally referring to an
early out. Once you are NO LONGER an
employee, then how you want your TSP
monies to be allocated are your
decision. As far as "withdrawing" some
each month...that is called FULL
WITHDRAWAL, and that is paid by TSP
(not Metropolitan Life...which is
"financial vehicle" federal annuities
are sold to). The Full withdrawal
option requires you to either "select"
the same amount each month, or let TSP
determine (based on the IRS Life
Expectancy Table) what the monthly
amount would be. Roseanne
Till we speak again.....
Roseanne |
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