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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 July 2012
Good Day Postal Employees:

This has been a very busy month with the early out's that were offered to mail handlers and postmasters. I have had many of you write and ask about the possibility of an early out for clerks, city letter carriers, rural letter carriers and supervisors. These decisions will be made after the organization sees how many have actually retired, from this round of early out's and decide if they need to reduce staffing even further. If you look over the past few years, the early out's started back in 2009, and have continued still. So the question of WILL YOU be offered an early out if you are in the categories above. If they feel that is the only way to reduce the number of employees still on the rolls is to offer an early out with or without an incentive, to get to the staffing numbers they need to efficiently and fiscally operate the organization, they will. I used the word efficiently...because with mass retirements, comes a loss of long-term knowledge, and extensive skills and abilities. Yea, I know there are quite a few employees out there, that feel many of their co-workers should retire, have the years and age to retire...and many of you know...they should, but they won't. Many of the CSRS employees have the "41yrs. 11mo. mind set" and are waiting to collect 80% of their high 3 average salary, and will not leave until they reach that magic number. FERS employees don't have that "magical" year combination, because of their 3-tiered retirement plan. FERS is only one component of that 3 tiered plan. The BIG money for FERS employee's in retirement is you had better fund it WELL!!

Also this month, I have had discussions with a few employees that have been reviewing their eOPF in liteblue, and found documents that did not belong to them. Please, as I have said in the past, you need to review your eOPF periodically. This will also ensure that any discipline which has a 2 yr life in the OPF (providing there is NO other discipline within that 2 year time frame (from the date of the discipline), has been removed from your eOPF. If you have not had discipline in two years from the date of the last discipline, you can request to your district labor relations office to have the discipline removed from your file. As an example, in speaking to one employee who was getting ready to retire and was looking for a beneficiary form, found discipline in his file from 22 years ago that was never removed, AND a health benefit form that did not belong to him. It had the same last name, but was not the same person. A word to the wise....

I will begin this column with the answer to question #6, that many of you requested that I publish the answer...sorry about that..

Q 6.Hi Roseanne, Just a quick question ,I received my Personal Statement of Benefits-2012 the other day. At the bottom of the page it says total creditable service is 35 years and 4 months. It then states for optional retirement under CSRS you will receive an annuity equal to approximately 66% of your average high -3 salary. My question is I thought for each year of CSRS service worked, is equal to 2% for each year worked minus sick leave, if so why is it only 66% for 35 years and 4 months and not 70% (2 x 35= 70) ? Thank You, B

THE ANSWER: Although everyone will use the term "56% at 30 years...However, the exact calculations are as follows:

1.5% X HI-3 Av Salary X 5 (first 5 yrs of employment)
1.75% X HI-3 Av Salary X 5 (next 5 yrs of employment)
2.00% X HI-3 Av Salary X remaining yrs( balance of yrs of employment)

Q 1. -Hi Roseanne, I enjoy reading your newsletter. I am FERS with 28 years of service. I am 52 years old. If a VERA is offered and they make me eligible to retire (by 25 yrs service for example), how do the 3 parts of retirement work? I know I would get the postal annuity (minus health, life, etc) but would I still get the SS supplement at age 56 (my MRA) even if I retire before age 56? Would it kick in at 56? Or do I have to work until age 56 to get this? And as far as the TSP goes, can I take monthly TSP annuity payments without penalty at 52? Is it just if I withdraw the entire amount before age 59 that I would get 10% penalty? Thanks, AW

A 1. - Hi AW, IF you are offered a VERA early out retirement:

1. At age 52 w/28 yrs makes you ELIGIBLE to retire under VERA rules.
2. You would get your FERS annuity, minus life & health insurance, Fed tax and depending what state you live in state tax.
3. As far as your special supplement, you would receive that WHEN you turned your MRA
4. TSP, when an early out is offered there are special "considerations" given to your TSP fund. The 59.5 issue is confusing and does not really play into at all, when you are dealing with an early out retirement and as a FERS employee, when you are at your MRA. If you are not at your MRA, then other rules apply. But UNDERSTAND THIS ABOVE IS ONLY IF A VERA IS OFFERED. Roseanne

Q 2. -I have been exploring the advisability of seeking an alternative to my 5X life insurance available through the USPS group term. This payment, although seemingly expensive, is nothing compared to the cost of that benefit when I become an annuitant (something in excess of $400.00 vs. the current $163.00+ as an active employee). I am thinking that State Farm can find a competitive vehicle especially if that annuitant figure is the bi-weekly charge. I assume since the amount deducted from pay is the bi-weekly amount on the estimate so is the >$400.00 figure. Ouch! Perhaps SF can't beat the employee group rate but it seems that surely they will be able to beat the annuitant amount. Exploration with agent in progress.

Just need to check that the rate goes up that much as reflected by the annuity estimate. Will the Health benefit suffer the same expansion? Plus, the figure given for the "retirement income" is actually what might be expected in gross amount as delineated on the estimate. I only have 17 years in (age:64) and I am uncertain about that figure, especially with the prospects of a VERA. I am an ET and have heard nothing about our inclusion in this long kiss goodbye prospect. K

A 2. - The rates for life insurance (FEGLI) have increased dramatically for basic life insurance no reduction and the 50% reduction. The rates for Option C and Option B have also increased. You should go to get the new rates so you can evaluate the increase for these optional insurance's as you age, and make a decision to continue paying as an employee, and possibly into retirement, or look to an outside insurance policy that no doubt will be much more reasonable. Roseanne

Q 3. - Years ago I attended a session you held at the Greensboro District Office when there was a VERA offer. You discussed the difference between the No Reduction, 50% Reduction, and 75% Reduction of the Basic Life Insurance. You showed us some figures and calculations and came up with a recommendation as to which was better, but I don't remember which is was. Can you let me know which you recommend and why? Thank, C

A 3. -Hi C, Well, since I did that session, the rates for no reduction and the 50% reduction have skyrocketed...the most economical choice is the 75% reduction. If you tell me what your current salary is, I can give you the figures for the no reduction; 50% reduction and the 75% reduction. Roseanne

R 3. - $56,810.00

RA 3. -56,810 rounded up to the nearest thousand (57) plus 2G= 59,000 of basic life insurance.

No reduction $241.60 per month (until age 65). At age 65+ $222.43 per month, and unless you cancel, you will always pay $222.43 per month, and the insurance will always be valued at $59,000.

50% reduction $92.04 per month(until age 65). At age 65+ $73.16 per month, when the payment reduces to 73.16, the $59,000. begins to reduce also at the rate of 1% per month until the insurance reaches $29,500 and remains that..but it also means you will be paying 73.16 for life.

75% reduction $19.17 per month (until age 65). At age 65+ and over is FREE. And when the payment stops, this $59,0000. begins to reduce at the rate of 2% per month until the insurance reaches $14,750 and remains that. It takes about 3 years for both the 50% and 75% reductions to be complete, at about age 68. Roseanne

Q 4. -Hi Roseanne,Thanks for listening, I started 1/72 as a CSRS PTF carrier and got out in 5/84 to raise a family, when I left I took my 11000. retirement. I recently went back in 5/05 to present as a PTF CSRS/offset. Finally after 7 long months I received paperwork for a payback amount. I will have to payback 53,000.00. How on earth do I figure if this would be worth it and how do I find out when I can retire, and most importantly how much I would get a month for an annuity? If you can point me in the right direction it would be appreciated. Thanks, S

A 4. - Hi Susan, What you are paying back is 12 years and 4 months of federal service. How it was calculated is 6.14% (may be a point of percentage off) of your earnings for those 12y4mo..THEN that is compounded by interest for the last 28 years!! The amount that you have to pay to even begin the "buyback" is exactly the 6.14% (initial deposit)of what you owed without the interest. Now the question, is it worth it?? If you are a CSRS/offset, your retirement will be calculated as a CSRS employee...when you turn 62, then it is recalculated because you are eligible to draw a social security check. If you are a FERS employee, then you are adding about 12% to your annuity. Is the 12% added each month worth it?? It depends on what your high 3 salary is...if you are CSRS/offset or if you are FERS. If you send me what your high 3 salary is and if you are CSRS/offset or FERS, I will show you what the calculations are, and then you can decide if it's worth it or not...just going by my overall knowledge, and especially if you are FERS, I don't think it's worth it. But send me the info and I will do a few figures and see. Roseanne

R 4.- Wow that was fast, thank u so much. From 1972 to 1984 I was a CSRS, and from 2005 to present, I am CSRS/offset. Does it matter in any way that I have been a PTF the whole time? In 2012, I earned $54,600, in 2011 $ 52,250 and in 2010, $54, now I have 19yrs and 1 month, and I am 59 1/2. Is it 60 with 20 years service minimum to retire. Much appreciate, S.,

AR 4. - Hi S, Even as a CSRS/offset, you are governed by CSRS you can retire at age 55 with 30yrs or 60 with 20 yrs or 62 with 5 years....unless an early out is offered to you. If no early out is offered, then you need to wait until you are at least 60 with at least 20 in reading this, I suspect you will be 60 and then you will a few months later have 20 years...and that is when you can retire.

As far as the PTF thing is concerned...yep, they are going to ensure that you have 40+ hours. As a PTF, you can only get the annuity estimate, twice a year...because it is not calculated in the NARCES estimate as full time employees are done. This creates difficulty in really KNOWING how much your retirement (monthly) annuity will be. This is for ALL PTF employees. Much of it has to do with "just how many hours did you work". So, with the amounts that you gave me:

54,600+52,200+54,200=$161,000 divided by 3 = 53,666 as your high 3 average salary.

53,666. X 1.5%=804.99 X 5 (1st 5 yrs of employment) = $4024.95
53,666. X 1.75%=939.15 X 5(2nd 5 yrs of employment) = $4695.55
53,666. X 2.00=1,073.32 X 10(balance of yrs of employment)= $10,733.20
$19453.70 Yrly Annuity

19,453.70 divided by 12 = $1,621.11 monthly WITHOUT SPOUSAL ANNUITY
$1,459.14 monthly with a spousal annuity

If you paid back that "amount" of would add 12 years, an additional 24%

SO 53,666. X 2.00% = 1,073.32 x 20= 21,466.40+ 4024.95+4695.55= 30,186.39
30,186.39 divided by 12 =$2515.52 monthly WITHOUT SPOUSAL ANNUITY
$2264.52 monthly without spousal annuity

And that is all well and good UNTIL you turn 62, and then your retirement is recalculated by OPM, because you are eligible for social security. Unlike regular CSRS employees, your social security will NOT be reduced...whew!! I hope this has helped in understanding your retirement plan. Roseanne

RR 4. - Roseanne you are amazing! Thank you so much for your time and expertise..I will be reading your section in postal mag....S.

Till we speak again........ Roseanne

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