Postal Retirement

Postal Retirement Q&A September 2014 by Roseanne Jefferson

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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@icloud.com. Click here for prior monthly Q&As

Good Day Postal Employees: Thank you for your prayers and encouragement, Hope is still in remission!!

This month I have tried to pick the best Q & A’s of the emails from the last 6-8 weeks. Just saying, picking the best, because many emails, (especially this month), that I answer are “person-specific”. And when that happens, its hard to decide which ones to print, so that I don’t confuse an already group of confused folks… what I say to one employee, sometimes (even if one thinks all things are the same) may just not be the same for someone else. Many employees out there STILL have no earthly clue that CSRS and CSRS/offset become 2 very different retirement systems when the annuitant turns 62, and many Rural Carriers fall into that CSRS/offset category. I reiterate this because when you write me and tell me you are CSRS and then it in fact are a CSRS/offset, most of what I told you, won’t be correct (after you turn 62) and that is not good. So be sure you KNOW what retirement system you are in, should you decide to send me a question. Additionally, I know after the column there is a Facebook add on, well….this is too important of a subject to discuss on Facebook or any other social media, and I don’t.

The theme is still the same with your complaints, and all I can do is commiserate with you. You can tell organizationally, things are not going according to the proverbial “ SOP”, because they are continuing to offer early outs with incentive, and early outs without incentives. Rumors spreading they are trying to get rid of CSRS employees because they are so expensive….well WE ARE…but if FERS employee’s played their (TSP) cards right they would be too! But you don’t! ( I can almost explain why, but I don’t have the years left to put it all down on paper)…but FERS can have a better retirement if they would just get off that lame ass thinking….and start to fully fund TSP. YOU CHEAP out on yourselves because you think retirement is so far away, or that the FERS retirement is going to financially carry you through retirement years….well get off that train of thinking, or change tracks because you will be very disappointed if you do not fund your TSP fully.

OH, I know…you got things going on…kids in school, YOU going to school, need another car…blah..blah…blah!! And to be totally honest, if I were not a CSRS employee, and was in the FERS system, I too would have been tempted to “borrow money from myself”, I wouldn’t of though…that’s a sucker move, like I tell my granddaughter. So understand you have…..THE ABILITY TO “ CONTROL” YOUR RETIREMENT. You have the TSP WITH MATCHING FUNDS, the more you put in the more they did, of course up to a point. In this column I get to actually see what “employee control over their retirement” does to the average postal employee, and its not good, like I say you cheap out on yourself. If I were to use a comparison of 3 employees all being of equal years….equal pay…one CSRS; ….one FERS (fully funded); …one FERS not maxing funding TSP)…I will bring you the results next month…

Much of the beginning conversations we cover, are as a result of the emails I get. I try to communicate information that you all want to know, but maybe sometimes don’t know how to ask (which is generally the case..or you don’t know the “lingo”). Many times I will say form 50 and and I will get a “duh” reaction, or I say ok, how about “Notification of Personnel Action”….if I get a “duh” there too….YOU are in trouble! Because EVERY SINGLE ONE OF YOU OUT THERE NEEDS TO KNOW WHAT THAT MEANS!!! The SF Form 50…IS named “Notification of Personnel Action”, they are one in the same. But you need to know WHAT that is. Its the form that is sent to you each time their is a change in money, like raises, Cola, Step’s. I even say, you know the one that has like a zillion boxes on it!! That is a form you should BE familiar with. It is a complex form, but it has EVERYTHING (pretty much) about you on that form.

NEXT UP – Health care, first quit bitchin’!! We have the best health care out there, we really do, I am amazed at the lack of understanding of this FEHB plan. Let me share a summary of a few emails, not many, but a few that have a misguided impression that when their health premiums go up in retirement, it’s due to ObamaCare. First, its the Affordable Care Act, second, when every single (non-PCES) employee retires from the postal service their health benefits have gone up to what every other CURRENT FEDERAL EMPLOYEE PAYS, which has been how it’s been…..since probably before any of us ever worked at the post office. It has NOTHING to do with any new health laws, retiree’s health care premiums have always been more than when they were an employee..Period.

EXAMPLE: Roseanne I was paying $71.43 every two weeks for my HB, and in retirement its going to cost me $190.27!!! OK DO THE MATH, that is $148.86 per month, results in an increase of $47.41 a month, or $11.85 a week, more… (yer killin’ me), get serious, 12 bucks a week more, and you are complaining!!??!!…….AND on top of that….and it’s never acknowledging the fact, you not in a $200 a month bracket insurance, your insurance costs over $600 per month, the postal service pays the other part…..you’d all better recognize….instead of critizing ….ya need to be taking NOTES!!” I may not be doing this forever now…

I know all the facets of personnel, and have worked in a variety of jobs at the postal service. So all of that goes into my answers….my understanding of rules/reg’s; union contracts, EEO, safety, which is why I know so much about retirement, but that is not all that I know, nor is it all that I write about…..but I just love retirement, its shows a completion of a career, a job well done and so keeping informed and knowing the in’s and out’s….the only way to spread information, is by taking Q & A’s and “sanitizing” them, and then publishing it the monthly magazine, or as I have done this month.

Let me say that the US Postal Service is a very complex organization, with all the trappings of a Fortune 500 Company, but under a strangle hold of being a federal organization that has to run within all federal rules/regs. Add to that, this agency has a strong (varied) union presence. And on top of that, be the ONLY FEDERAL AGENCY THAT RUNS ON IT’S OWN 2 FEET. I hope to God you understand that statement, and sad if I have to break it down even further to include the REASON- which is this federal organization stands ALONE. We are not funded by taxes as are all other federal agencies. And many times we as postal employees really forget that other federal organizations are not REQUIRED to make a profit……WE ARE. Its why we were never paid on a GS scale as other federal employees are. Our pay scale(s)… totally different. When you and other federal employees review each year their “grid” of choices for health benefits during open season, you see how the postal service has a much lower employee contribution than all other federal employees, its not even on the same sheet. All other federal employee’s health benefit contributions are on the same sheet as the postal annuitants. We are unique in so many aspects from other Fed Org’s that we are ALWAYS going to be the SQUARE peg trying to fit in a ROUND hole. That can only be done if we “shave off” some of the corners to be able to fit like all other Fed organizations…(which won’t happen) so we will remain different until a total reorganization happens…and even so we will remain a for “profit” agency. Just how “this federal organization is “structured” will always make postal employees different than any other federal employee, because of the “profit” issue. That is why we pay a lower health premiums, because no matter how “little” we profit we make, we are not an agency or employees that are paid because of federal taxes…..for all of our issues, bitches’ complaints, we are the most trusted Federal Agency out there, and that speaks VOLUMES on how the public views us. This is in response to some of the questions regarding why other agencies get “off” or are “closed”, and we don’t. We are there in Rain, Sleet, Snow, Hurricanes, Tornado’s….we postal employees we roll….we rock we are the FIRST communication organization, Oh we still complain….BUT the mail ALWAYS GETS DELIVERED! Postal employees are awesome!!

Q 1. Roseanne, I hope your daughter is doing well, and still in remission. And secondly I would like to thank you for all that you for us postal employees out there. You are the voice of reason…..you just make sense. I do have a question on taxes. I took the early out with an incentive and received that inceptive check last May for $10,000.00. Federal taxes withheld about $2,500. Net was approximately $7500. Do I have to pay more tax on this ($7,500) incentive when I file for my 2013 Federal Income Tax return. If so, it seems like a double tax on same money? Thanks again, ER

A 1. Hi ER, ALL money …..ALL money earned (via working( OR annuity or pension)(or Lump Incentive Sums)) ALL are calculated when you file your taxes for the calendar year. Each “portion” of money can (and is) calculated at different rates. Add the factor that some pensions like FERS/CSRS may not have a state tax applied, because of each state having it’s own tax issue (or not). Such as FERS/CSRS pensions will be federally taxed monthly, as does your TSP, but the TSP is taxed at a much higher rate than the FERS/CSRS (tax regulation(s)). And if you are retiring and have a “still working” spouse, even filing together, when filing joint income tax, there are differences in how the tax rate is applied to the TYPE of money it is.

In the case of the lump sum incentive seeming like a double tax…. in reality that $10G’s IS INCOME!! So too, will the $2500, be shown as “already paid” taxes on the 1099 that you should receive for that money. The 1099 should show a gross amount $10,000 with the reduced net $2500 (for taxes). The 1099 should NOT show $7500 as income. Its not double taxed. Roseanne

Q 2. Hi Roseanne, I am 57 with 27 years of service, a FERS employee that was an impacted Postmaster. I took a downgrade to a 6 hours office, just to save myself a job, and give me time to continue to bid on jobs. I am on a detail to a level 18 office, and have been since before I took the downgrade. Now this new retirement offer has come. I have given it some thought to take the offer, but I think if I work longer my retirement income will be more. If I go now, even with retirement and the supplement social security, I would have to get another job to make ends meet. Will this downgrade hurt me, even though I’m still making higher level pay. The 6 hours job is my position of record, but I am OIC at a level 18, and have not actually worked at the 6 hours office. I figure once the retirements take place, there may be some new jobs to bid on, and if I make it through January, then there might be less people applying for jobs, and I might have a better chance.

A 2. I think you should order another couple of annuity estimates. Using the early out estimate you have NOW and then request one for 3 years from now and COMPARE. The proration factor will be worse, BUT you will have 3 more years adding (& matching) TSP funds. But do the comparison. It’s the ONLY way you will see how the proration factor reduces your annuity the longer you stay at a (less than 40 hour) position. Remember its your TSP that is the “breadwinner” in a FERS retirement. Roseanne

Q 3. Hi Roseanne, I am many many years from retirement, and I overheard some coworkers talking about you – this website and your blog. I just want to know if I don’t stay at the post office, because things don’t look very good these days, and I have only been here about 11 years. I am thinking this place is a total mess, no one knows anything, and every day, your either humiliated or you feel threatened that you are not going to have a job. I’m no spring chicken, but no where near retirement. This place is like the inmates are running the asylum!!! OMG, what are my options. I did read a few of your columns from the recent past couple of months, so I know to tell you that I am FERS. My coworkers were saying that you know answers to questions that are not JUST retirement, so since no one else knows, I thought I would email you and just see if you would even answer me. My questions are, if I resign at the post office with say 11 years…do I get anything? Do I get health benefits, and how long do they last. My co workers said when they retire, they get to keep their health insurance. If I resign, will I get to do the same thing? LG

A 3. Hi LG, Your federal benefits such as health benefits, and life insurance are only funded when you are working or you “actually” retire, not when you resign. When you resign (or fired); you have the option of the COBRA, (a continuation of your current health benefit plan, but paying the ENTIRE amount. That is what you normally paid bi-weekly AND the USPS’s contribution. This is temporary, but does give you a bit of breathing room when trying to find another job with health benefits. I do realize it’s expensive, but that shows just how good this FEHB insurance is. So that cleans up that question. Let me address the phrase “blog”. I have heard that a lot. If I have one, I don’t know where it is!! I write this column for postalmag. The Rural Carrier union in North Carolina does publish the column in their union newsletter, which I had agreed to. So I really don’t know about a blog?

As a FERS employee, your “major” “$$$”component of your 3 tiered retirement plan is TSP which is “ portable”. So you can roll it over into another “401K” at another job. The second tier of your retirement is Social Security and until you reach that age there is nothing to do with that, since I assume you will find another job and continue to put into the SS fund. FERS Retirement money. That money, is shown at the bottom of your paycheck that many wonder what it is. After you resign, you can request that money, by contacting OPM (Office of Personnel Management), or going on line to opm.gov and print out the form. For a FERS employee, it would be SF 3106. Hopefully this has helped answer your questions.

Roseanne
Till we speak again…..Roseanne

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