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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
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..


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 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 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 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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