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 email@example.com.
Good Day Postal Employees!!
MEDICARE PART A – Follow up. Let’s begin the column with following up from last month on my own personal Medicare Part A situation. If you will remember from last month, I almost “missed” the opportunity to be granted participation in the Medicare Part A “boat”. I finally received my Medicare Part A “ONLY” card, and the accompanying letter that I was “covered” from November 2018 forward, a week or so after the column published. So even though there was a government shut down, and my application didn’t arrive until after Jan 2019, it was determined that my Medicare Part A was effective from November 2018, the month in which I turned 65. I will keep you all updated how just having Medicare Part A, and NOT MEDICARE PART B just our FEHB, and how it’s working. Any humps / bumps in the road that I experience, I will keep you all informed. One of THE most important issues in this….(WHAT do I mean by “THIS”? …meaning NOT TAKING MEDICARE PART B)..is that every doctor and every hospital that you go to for your health care needs MUST MUST MUST “accept” Medicare Part B, as an insurance. There are some doctors and hospitals that don’t take Medicare, and even though I don’t participate in Medicare Part B, every doctor, hospital, Urgent Care, Pharmacy, that I use, MUST. They must accept Medicare (EVEN though I don’t have Medicare Part B as my health insurance). Because, by them not “accepting” Medicare, then the FEHB, Federal Employees Health Benefits program will NOT pay. It’s a simple as that. You must have your medical “team” accept Medicare as an insurance, in order for FEHB to pay your medical charges.
The last question #5 in this column is a saga, a way to communicate to you what I have been saying for several years. I have spoken many times in past columns about as a FERS employee, working until the end of the month in which you BECAME eligible to retire (meaning the month you met your MRA), Minimum Retirement Age. Not until this last month did I have any sort of documentation (other than the retired postal employee’s who wrote to me, telling me they were found to not be eligible for the Special Supplement) to support what I was relating to all of the readers of this column. All I had was the word of quite a few of FERS retirees, who “missed” receiving the Special Supplement because they were not “eligible”. Even though they seemingly met the criteria. In all the cases, they wrote me, to ask me, to tell them why, why weren’t they eligible. Because according to each of them, no one would explain it to them at OPM. As it turned out, in turning the information inside out, to find the how each missed the eligibility, it appeared that employee did not work the entire month in which they turned their MRA. HOWEVER, it was not in every retirement, which made it even more difficult to identify the why.
Q 1. Hello Roseanne, I am retiring on May 1 in 2020. I carry no life insurance policy I canceled it in 2013 and there has not been an open season since. I was recently told, by another employee when I retire that I could opt for the basic insurance which is my salary 60,737. plus $2000.Of course you pay for that with the choice of basic, 50% reduction in a 75% reduction. Is there a rule saying that you have to had the insurance for at least five years before you retire or can you opt in at retirement. Thank you C
A 1. Hi C, There is so much about your question that feels incorrect!! You would have had to have someone give you profoundly WRONG ADVICE if you tell me you cancelled ALL your life insurance….”I carry no life insurance……2013. I have to disagree with that statement, and I don’t even know you.
You “Opting for BASIC” would be impossible if you really cancelled ALL your life insurance in 2013. Wouldn’t even be a question or consideration, you don’t have any….IF as YOU say you cancelled it all. So I think you just cancelled all the optional insurances, and kept the one that you don’t pay for, Basic Life Insurance. This is how you all get in trouble….you say the wrong things….You see – it’s really hard for me to see you or anyone cancel insurance that you DON’T EVEN PAY FOR!!!
So you should still have basic and yes when you retire you can opt for the 75% reduction. And when referencing a pre-5 year “qualifier” I think you are talking about the MUST have FEHB coverage 5 years prior to your retirement effective date. FEHB (federal health benefits). I think trying to keep them as separate entities will help eliminate confusion. Now back to the life insurance. You’ve had this Basic since the day you began the post office, and until now…because WHO CANCELS something that is free! Roseanne
R 1. Hi Roseanne, Thank you for answering my email and information. It was very helpful. So yes, in 2013 I cancelled my optional insurances due financial reasons. Yes I still carry the basic life insurance which I knew I had. Sorry I did not explain everything correctly. So this is what I thought: While still working on the job, if an employee dies I would get my salary plus $2000. Yes I thought the basic insurance was only was there while working. I did not know that it was carried over into retirement – Basic Life Insurance. Thank you for clearing that up. Also glad to hear that there’s no five-year time in having it prior to retiring. A coworker-recently told me that it was still an option in retirement, which I never heard of before. In New York we do not have a human resources office anymore. You have to call OPM and you’re on hold for at least 40 to 50 minutes and that is not doable when I’m at work. So it’s hard to get answers. I will be working with a retirement person prior to leaving in May. But sometimes you just have questions in your head that you want to know the answer for immediately. But she also was the one that said something about a five-year status. I told her I knew that was in effect for your health insurance to keep it in retirement. On my retirement print out it shows an option for life insurance for $16,000 for roughly $20 a month. I don’t have the statement in front of me. I was definitely going to take that option. I have no mortgage I have no debt. I do have a decent amount in my TSP. I wish I had more-don’t we all!So I do you have one more question or should I say want your opinion. Do you think one should opt in for the basic, 50%, 75% reduction plan?? What are your thoughts on taking the insurance in retirement. There was also something about paying for part of it until you’re 65 yrs of age. Also, if you sign up for both do you get your Basic salary amt. and the $16,000 that you opt in for. so with that said, you pay for the basic life insurance for 16,000 and you’re also paying for the basic insurance with a premium.Then something happens at 65 years of age. One stops paying for the $16,000 policy and only pay for the Basic One year salary one. I definitely hope I’m not confusing you. All in all I don’t really know if it’s a good idea that’s my question to you I saw the rates. I really do appreciate your time and thanks for answering me back. C
RA1. Hi C, First let me tell you this, and I don’t even know you, or your salary. But based upon what you have written, I KNOW your salary is between $61,001 and $61,999 (not 60,737…because if it was then the life insurance that you would be looking at would show $15,750, not $16,000)….unless you were rounding up on the basic life insurance. I guess the very short and the answer you are looking for is…You don’t have $16,000 life insurance….you have $64,000 of life insurance NOW and will until age 65. If you take the 75% reduction, you will pay $20.80 per month until age 65, and then at age 65 that payment stops, and then the $64,000 reduces by 2% per month, over the next 3 years until it reaches the 25% of its original value (or a 75% reduction) and will bottom out and remain at $16,000. So in essence you have $64,000 of life insurance for a little over 20 bucks a month. At 65 you stop paying and then by age 68, the value of that insurance is $16,000. Roseanne
Final Response: Thank you so very much for explaining this to me and your patience with me. C
Q 2.Hi Roseanne, I really enjoy reading your articles and have learned a lot from them. I don’t know if you can answer this or not, but my disability paperwork went to OPM on March 12, 2019. Do you have any idea as to how long it usually takes for them to either approve or disapprove a person’s disability? Thank you for your help. D
A 2. Hi DM, One should prepare for MINIMALLY 5 months & 1 week, from the date that OPM receives the case, for an approval / disapproval. Now keep in mind, that time frame is saying that everything was mailed timely. No issues….no delay of mail, no one was on sick leave, the offices were running full staff….you know on the BEST DAY; BEST and most perfect….( I don’t need any additional information…paperwork was clear, no mistakes…etc) for that time frame to be adhered to. Your disability retirement will go through a review with a board of physicians. The time frame, it’s not a science, but from years of watching how long it takes, from the perspective of doing a “disability retirement” for clients. Roseanne
Q 3. Good morning Roseanne, I retired 12/31/16 with 33 years service and am enjoying everyday of retirement, I enjoy reading your column too!! I have a question that I have asked several recent retirees and have gotten different responses. Will I be eligible for COLA increases or will I collect the same amount until I reach 62? I am currently 58 and retired at 56 (8/4/60) I started at USPS 1/21/84. Thanks for your time. MK
A 3. Hi MK, Based upon information in the updated pamphlet “Its Your Retirement”, provided by OPM, I have been told that FERS retiree’s have been receiving age based COLA increases. Order a new one by going to opm.gov…..and then compare it against the one you received after you retired. Much can be learned from that book about YOU!! Roseanne
RA3. Hi Roseanne, Thanks for your input and I did request the booklet.
As suggested, I did some research and found that yes, FERS retirees receive COLA at age 62. Thanks MK
Q 4. Hi, Roseanne! Thank you for sharing your knowledge of the retirement process with us, your help is truly priceless.
I have been doing calculations and am considering a retirement in 2027. Although I can leave much earlier, it would make my finances worry free if I stayed longer than originally planned, with the extra FERS 10% plus additional TSP savings (max plus catch up contributions and added interest) and currently my Social Security estimate at 62 is almost $200 higher than what my Supplement calculation shows if I left two years earlier and stopped adding to the TSP. I also enjoy my job so staying wouldn’t be a burden, at least as of now. My health is excellent and I currently have 2255 hours of sick leave.
My start of service was 10/8/1988 (I’ve been a City Carrier the whole time) and my birth date is 2/1/1965. My MRA puts my retirement eligibility date on March 31, 2021, with 33 years of service. On February 1, 2027 I will turn 62 so I would get the extra 10% in my FERS Annuity. That is also a Monday. January 31 is a Sunday, and I don’t know if my actual retirement would start on my birthday using January 31, meaning I won’t get the extra 10% if it doesn’t. If I work through February until the last day of the month, February 28 is a Saturday. I am unsure what would be the best last day of working if I stayed for the extra 10% and added TSP money. I may still leave in December of 2024 but if I decide to stay I’m really unsure about 2027. Can you please offer some insight? I hope I gave you enough information. Thanks for any help! B
A 4. Hi B, This should really help in the assessment of working. First staying so that your calculations change from 1% to 1.1% is huge. Doesn’t sound that way, but it is, as you have done the math (calculations), the increase is quite the value. Your date of birth is 2/1 and for me to be sure that the employee gets “EVERYTHING” staying until the end of the month that you reached your 62nd birthday. And of course by everything I mean the higher calculation.
As far as the discussion of one month difference (provided you met the age/years criteria)…one month more or one month less is about $4.50 per month…you retire 2 months earlier than what is on the estimate….your annuity would be about $ 9 bucks less per month. And so, if you retire 1 month later than the estimate, you will see about about $5 more per month. It’s not enough for that to be a real issue when trying to (for most folks) capture as much sick leave that will be converted to years and months and added to your credible time, which adds, of course to your overall annuity calculations. Meaning – no one wants to leave any sick leave that is not used or added to their overall annuity. As far as the (your) date….when retiring to get the extra percentage… work until the end of February …the 28th precisely…..regardless where it falls in the pay period. Why take a chance and losing that extra percentage, simply because you didn’t work the entire month of February. I hope that has given a bit more insight ..Roseanne
# 5..Dom was generous enough to let me use his name and the strings of emails between us….
Dear Roseanne, After many years (and on the stern advice of my cardiologist!), I did it. March 25 I submitted my FERS retirement packet, within an hour of my phone counseling session. Then, on April 6, I got a FERS Benefit Estimate Report. Even though I declined ANY life insurance on my SF 2818, it was included as a deduction from my annuity estimate!! Plus the big kicker… I will be 60 the beginning of May, and will start my retirement June 1. But under FERS annuity supplement, there is $0.00!!!! I called HRSSC and the girl there was very insistent that this was a MANUAL estimate, and had nothing to do with my packet..and that they also could NOT manually give me an estimate of my FERS supplement! (even though every computer generated estimate was able to!). My question: Was she correct, or just BSing me to get rid of an upset future pensioner? Thanks for your help!!! Keep up the great advice! Sincerely, Dom P
My first Response; And that is why I do what I do…..you should have NEVER given up the Basic life insurance, that is a true benefit and you don’t know how it works, because if you did you would not have dropped it. Next, the Benefits Estimate Report, is evidently because you are NOT a 40 hr week employee….and therefore the manual estimate of “benefits estimate report applies”. As far as the FERS special supplement, I have not seen that figure on the Benefits Estimate Report, but then they have only been putting that Spec. Supp figure on the NARCES Annuity Estimates (AAF241P1) for maybe 2 years. As far as the FERS Benefit Report changing what you took into retirement (as it relates to your life insurance choices), that Benefits Estimate Report was generated before your choice, and it’s just a “report” and has nothing to do with the choices made on the retirement forms. And it was such a bad choice…..you should have taken the Basic Life Insurance at the 75% reduction!!
And so based upon their answer, no they cannot give you an estimate, because first they have no idea of what your “pro-ration” factor is, and may be you don’t either. But that IS ON the Benefits Estimate Report. So look for that. It is a reduction of your retirement calculation, based upon the fact that you don’t work a 40 hour week. So in truth, they are not BS’n you, they don’t know. I hope that helps. Roseanne
Dom’s Response: Dear Roseanne, I AM a FTR, 40 hour a week career employee!! My FERS part-time proration factor is 100%. As for the basic life insurance… $16000 of coverage? for $20/month? I’ve got a better plan. 30k coverage for @$18/month. With NO reduction for age. And premiums stop at age 65, with no reduction of coverage.
Up until I received this, I was getting the computer generated annuity estimate, which had the same basic annuity amount as this one, and also showed a SRS of @920/month. 60y/o…25.5 years of FERS service. Sooo..did they mess up somewhere, or am I just worrying over nothing? Thanks soooo much, Sincerely, Dom
My Response: Just send me your phone number ( I could not do this on email….because now Dom has forwarded me the two estimates, the AAF241P1 NARCES Annuity Estimate and his Benefits Estimate Report and in reading both a conversation was absolutely required). And before he could respond back to me with a phone number, I sent this: Dom, I have YOUR answer…..(and the why…that they couldn’t tell you….that I can see immediately why)….send me your phone number, I don’t think I can communicate this as well unless we speak. Roseanne
Dom’s Response: Dear Roseanne, Phone number sent (). Just a worry wart, I guess. According to everything I’ve read, I DO qualify for the annuity supplement, but just worry when I don’t see it on official paperwork. SSA says I should get @1535 at 62. So from my figuring, the least i should get for my SRS is @850…and really should be close to the 920 the PO is suggesting. Thanks! Dom
Dom and I had the conversation…because of this issue, and how much I felt his situation would enlighten my readers, he agreed to let me use him in the column. AND by the way, he was going to rescind his paperwork, change his retirement date to 5/31, and selected the 75% on the Basic Life Insurance.
NOW to explain all of this. There are two types of “retirement estimates” the NARCES that I always refer to, which the report number on that form is AAF241P1, and that “annuity estimate” is generated by HRSSC, and can be generated by the employee as well by going to liteblue postalease website. That report AAF241, typically can only be generated when the employee has a 40 hour a week schedule. Just so you all are aware, there are many employees in the postal service that retire as a ptf. Smaller offices sometimes have so little turn over, that being a PTF for your entire postal career is not unusual.
The Benefits Estimate Report is generated for those employees that are not 40 hour a week employee, so why this type of report generated or ordered for him, I cannot say why, nor can he.
Lets start with the facts: DOB 05/04/1959…..he turns 60 on May 4th 2019. And when he turns 60 on May 4th, he has 25 years 6 months of credible service. Therefore he meets the eligibility criteria to receive a Special Supplement. (Age 60 w/20 or more yrs).
On the AAF241P1, it shows an effective retirement date of 06/01/2019 (which really means he ends his career May 31, 2019) and at the bottom of THIS report it shows a Special Supplement monthly amount of $921. All of that looks right and after me re-doing the calculations, the monthly FERS amount(s) are correct. Right here is where I want to say that the effective date of 06/01/2019 is the first day of him being a retiree, and the thought process is the last day on the postal rolls would be 5/31/2019. Keep in mind 5/24 is the end of the pay period, and May 25 is day 1 of the next pay period…AND NOT THE END OF THE MONTH!!
Switching to the other report, the Benefits Estimate Report, the “Date of Retirement” lists 05/24/2019. I asked him why this date, and he said it was suggested by HRSSC since it’s the end of the pay period. However, on this same report where its shows totals of monthly annuity and FERS Annuity Supplement, it showed $0.00 for the FERS Supplement. Both the NARCES Annuity Estimate and the Benefits Estimate Report, both showed EXACTLY THE SAME monthly FERS annuity, however, NARCES had a $921 Special Supplement and Benefits Estimate Report had $0.00 Special Supplement.
It was the very first time I was able to capture what some of the FERS retirees have been saying to me that has happened to them. AND I have been relating this to you for years. And that is working until the end of the birth month of eligibility, to ensure eligibility for the FERS Special Supplement. If you look at the facts, Dom is retiring after turning age 60 (5/4/19), and was retiring on 5/24/19. On the FERS Benefits Estimate Report, shows no FERS Special Supplement, apparently meaning not eligible, again because on this report, it shows his last day as 5/24/2019.
Going back to the NARCES Report, with an effective date of 6/1/2019 and the assumption that the employee will work until the end of May, shows his monthly FERS Special Supplement of $921.
Why did I do all this, and have Dom to allow me to share all these emails….to at least validate what I have been saying….that as a FERS employee, when you turn your MRA, WORK the entire month of the month in which you reach eligibility to ensure the FERS Special Supplement. AND YES, I know it does not happen to everyone….but it does happen to many. This is my way of trying to show you all that a few more weeks of working until the end of the month, just to be sure you are not the one who loses the Special Supplement over a couple of days or a week. And one other thing, when you want to retire, when asking for the estimate….if you say you want to retire in June, they will send you an estimate for July. If say you want to retire in in October, the estimate will be for November. They interpret you being a retiree in November, and you last day as an employee would be in October. Many times I hear I told them I wanted to be retire in June and they sent me an estimate for July. Keep that in mind when requesting the estimate.
I really hope this column has given you some clarity in many complex situations.