Contributors

Postal Retirement Q&A February 2016 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 Q&As and Click here for Q&As prior to July 2014.

Good Day Postal Employees!!! I hope this year has been a great start for all of us!! Let’s begin……..

Q 1. Good morning Roseanne, I am going on a detail in a few weeks, as an EAS at a higher level. Will that detail count towards my high 3 for retirement? What number do they do by, my base pay or my pay for the year? Thank you for any help you can give me. ES

A 1. Hi ES, Any time you work a higher level position, for it to have a REAL impact towards your High 3 average salary…it must be consecutive in the last 3 years of employment. So what do I mean by that? As an example, if you were to work higher level for two weeks in March 2012 and then not work higher level until two weeks in December 2012; then higher level in April 2013 for 4 months…. that’s not truly consecutive..it’s sporadic (it counts!!) but not in any real financial way for this to be an issue really for anyone….I will explain….in this scenario why:

Why : Because it was so long ago…that NOW (2016) your High 3 average salary is higher than what that higher level pay was in March 2012 and December 2012, and those 4 months in March of 2013. Based on rules and regulations a true higher level position requires a certain period of time prior to the higher-level pay beginning, with appropriate documentation. (Whether they are following the regs or not, all you care about…is it showing in your High 3). In order to ensure that all your money is going to be calculated toward your high three average salary, you must see this on your paycheck stub. It HAS to show that higher level status on the pay stub ( & remember it’s really the last 3 yrs. that will count, as it relates to increasing your retirement). This scenario includes an employee that was demoted from a higher level, like EAS-25….and then the PO kept their sorry ass around for a couple of years as an EAS-17 in some BS job, to allow them to retire. (To avoid the obvious!!…I don’t need to go there…you ALL feel me). That’s one scenario is where the higher level that would be calculated for that employee, EAS-25 downgrade to EAS-17) …because when he retires, his EAS-17 salary will NEVER reach what he was making as an EAS-25. (I AM NOT TALKING ABOUT ANYONE SPECIFICALLY…I AM USING REAL INFORMATION AND CASE STUDIES OF A VARIETY OF EMPLOYEES…OUTCOME THE SAME).

BUT ALWAYS KEEP THIS IN MIND – that when your annuity estimate is ordered, that annuity estimate will NEVER pick up the higher level pay (on the actual estimate). The reason for that is the computer uses the LAST 3 YEARS of our Form 50 history, (& typically a Form 50 is not generated when you are placed in a higher level position), unless its for an extended period of time. So in reality, this Annuity Estimate is just a
“Snap-Shot” of what the computer sees as your last 3 years of salary history. The computer is based on averages – the average employees’ Hi 3 Average Salaries are typically the last three years of employment, your higher level is not going to show….even if in the last 3 years.

All of the financial information is not yet at OPM. Once OPM gets the financial records transmitted from Eagan, MN – it will only be then that OPM know’s of your higher level (this will be after your Form 50 for Retirement is processed). Because the financial records are transmitted by Eagan, after the SF Form 50 for Retirement is processed.. The annuity estimate says estimate and that’s why – it IS JUST an estimate. Only until the records from Eagan get transmitted to OPM – the only thing that they have to go on at OPM is your form 50 history. As far as numbers…your base pay is used, or better stated your Form 50 Salary history for the the year?? The increase (by being detailed into a higher level position) is not going move your retirement income much, especially if the detail is only a few weeks, and/or sporadically. Do for the experience- not the $…the money is nominal. Roseanne

1a. Q . Thank you so much for your reply, but I am still confused on where your high 3 comes from. Is it just base pay, or does it include all of your overtime too? That is the number one question that everyone always asks. ES

1a. ES Response – Just as information: Retirement 101: Your annuity (CSRS or FERS) is calculated by your HI-3 average salary. It is THE YEARLY SALARY (that is your base pay), that is located on your Form 50. Those last 3 years are generally your last high (3) salaried years.

OVERTIME- Sunday PREMIUM- Night DIFFERENTIAL….EME (for Rural Carriers)…NONE OF THOSE are added when calculating your retirement annuity, because your retirement is based on your BASE SALARY Higher level DOES count (why)…. because it’s not about EXTRA money, – it’s about an increase (in level) and the increase is reflected in the base salary (which is what your retirement calculations are based upon). And when on a “true HL detail”…the base of THAT salary is higher. Your annuity is calculated on your Hi 3 base annual salaries. Higher level really has impact when you are in HL detail in the last 3 years…JUST prior to retirement. I hope that cleared it up for you. Roseanne

1b Q. Thank you so much….it absolutely…really does clear it up…and no one knows how to explain this…no one. Thank you!

Q 2. Roseanne, Thank you for your blog. I read as often as I can. A question came up in our office and I knew you could answer it. If a retired Postal employee is still using the Postal TSP funds after retirement to maintain their funds then passes away, does their spouse receive these funds as beneficiary or do these funds get lost somewhere? Perplexed in MT

A 2. If the former postal employee took out an ANNUITY, with Metropolitan Life or another Annuity with another company or is receiving a “monthly payment” from TSP….so just saying the word “funds” doesn’t tell me anything on how the money is being “dispersed” to the retiree. I cannot answer that question unless I know HOW the monies are being paid, & from what source. The question is not clear at all. Roseanne

Q 2a. Thanks for such a quick response. To increase further the money, I would be in G fund or stocks and bonds and at retirement the employee doesn’t plan to draw from them but wishes to leave them untouched for his spouse to use later as needed. Thank you

A 2a. In YOUR (and I use that word loosely) case, (& simply on the strength of this email)… You didn’t answer my question, nor did I answer yours…and then you thanked me …for what? with…another question?…….. Just based on what you responded I would strongly encourage you to find a good solid financial advisor to lead you to make good financial decisions. Sometimes we think we know what we’re doing when it comes to money, and we are so absolutely sure we are right – but then many of you find out, you are so profoundly wrong. Please take my advise and find yourself somebody who understands annuities and 401K’s and who understands the properties of our TSP, ( our 401K). There are too many options and variables when dealing with money that is considered 401K. Be wise with the decisions, there are many wolves out there!! Roseanne {Omission of partial response….below is a “summation” of what was included in the response email…a bit “cleaned up” though!}

(OK…..HERE SHE (me) COMES….RELATIVE TO THE ABOVE QUESTION…THERE WAS NO WAY THAT QUESTION CAME FROM A POSTAL EMPLOYEE, NO WAY….IT CAME FROM HIS/HER or some FINANCIAL ADVISOR)

PLEASE KNOW THIS…. I know YOU ARE NOT A POSTAL EMPLOYEE writing to me….YOU ARE FINANCIAL ADVISOR…And so – DO YOUR JOB!!!

I have always said I am not a financial advisor…I am a federal retirement expert….not because I say, but federal documentation says I am. This is one area that needs to have some one you can look at face to face…understand what is really being said about this TSP (401K) money. Integrity and full disclosure about what happens to the TSP money in EVERY SINGLE SCENARIO that one (YOU) can come up with, is the true task of the “financial expert” that is giving you FULL disclosure….of YOUR MONEY!!

IF YOU READ MY COLUMNS….YOU KNOW THIS IS A PASSION FOR ME, to give all of YOU sorely needed INFORMATION….IF YOU READ MY COLUMNS…YOU KNOW I AM TALKING TO EACH OF YOU…. DIRECTLY….

MAKE GOOD DECISIONS ABOUT YOUR TSP AND FIND A GOOD FINANCIAL EXPERT BEFORE YOU RETIRE ( & NOT 3 WEEKS BEFORE YOU RETIRE!! )…GET FIGURES, ENSURE AUTHENTICITY…AT OUR AGE, THERE ARE VERY FEW, IF ANY DO OVER’S. THERE ARE FINANCIAL WOLVES OUT THERE THAT WILL HAVE NO REGARD FOR YOUR YEARS OF FUNDING TSP. (FERS RETIREMENT WAS DESIGNED TO HAVE TSP AS THE LARGEST PART OF YOUR RETIREMENT PORTION).

YOU ARE ALL SO WORRIED ABOUT THE FERS PORTION (1 OF 3 PORTIONS OF YOUR RETIREMENT (FERS)), THAT I HAVE TO TELL YOU THAT YOU ALL PUTTING YOUR FOCUS IN THE WRONG DIRECTION…You all should be FUNDING TSP like it’s your Christmas Fund (or like in the song…like it’s 1999”). YOUR FOCUS NEEDS TO BE TSP!!!. AND THAT IS WHERE, AS (FERS) POSTAL EMPLOYEE’S, YOU FALL SHORT IN UNDERSTANDING HOW THIS RETIREMENT WORKS. TAKING THAT LACK OF MISUNDERSTANDING FURTHER, YOU DON’T PUT THE EFFORT IN research of your TSP funds after retirement..THAT YOU SHOULD BE DOING BEFORE RETIREMENT. SO GIDDY UP AND GET STARTED, YOU KNOW NOW!!!..I’m done preaching.

Q 3. Hello Roseanne, I currently have 33 yrs. & 6 mo. of credible service, and I have met my MRA being 57 years of age. If I retire in June will my postal earnings to that date put me over the earnings limit for the Social Security or is that amount calculated after I retire. Thank you for your time. JL

A 3. HI JL – A very fast and simple answer YES it will….this is why most retire at the very end of the year, or the very beginning if they are FERS….because generally by Mar or April, (especially if you have overtime), you will have exceeded the earning limitation to collect Social Security….for that year, because you “made more than $15,800 (figure has increased slightly for 2016), and that KILLS the Social Security for that year. I hope this has made sense to you …..and the why’s of it. Roseanne

Q 4. Hi Roseanne (again), Well, I did it! I retired as of 12/31. I love it. Not having that stress is almost life-changing. I got my first check which I know is not the full amount. I was informed that it would take a few months before I get the right amount. The question I have is –how is the FERS supplement paid? Will it be in the same check as the retirement? Was I supposed to do something to make sure I got that? I still haven’t received anything from OPM. If I just need to be patient that’s ok. Just wanted to make sure I wasn’t supposed to do something else. Thanks so much for your information, throughout the years. Your monthly articles were so helpful (not just to me, everyone in my office…many people know about YOU). I just couldn’t take the PO anymore. Take care, and again much thanks.

A 4. Hi, Because ALL FERS employee’s are NOT ELIGIBLE for the Special Supplement……until OPM has fully completed your retirement…will they even KNOW you are eligible for the Special Supplement.

That being said, You didn’t say WHEN you got the first check, keep in mind (that was FERS ONLY not Special Supplement)….so lets just follow that date….your next check should be FERS ONLY..(about 22-35 days after the first check). About 25-30 days later is the Balance check. That balance check should be (1) FULL retirement check and (if) they over/or underpaid (generally underpaid by only a few dollars) you for the first 2 interim checks…that (addition or subtraction) will be added or reduced when you get the third check (balance check) is paid.

Between the time the balance check comes and the first REGULAR check….(that means your retirement has been completed)…look in the bank…(NOW UNDERSTAND THIS INFORMATION IS IF YOU ARE ELIGIBLE FOR THE SPECIAL SUPPLEMENT EVERYONE IS NOT)
around the time that the balance and first regular check comes in….OPM will have deposited about 2-3 months worth of your Special Supplement. Keep in mind it is paid (again if eligible) until age 61 and 11 months. According to my clients….there is no “HEY GIRL/ HEY DUDE letter from OPM saying…..”I’m dropping your Special Supplement in the bank. OR “Yo’ you ain’t eligible for the Special Supplement….nothing….so this is what I get from everyone…not an exact science…but pretty accurate. I hope this has helped you ease your tension about the Special Supplement. Roseanne

Q 5. Hi Roseanne, Thank You for helping so many postal employees. I had a work related injury to my arm and had surgery in 2015. I am back to work now but on restrictions, I work 6 hours a day. I am turning 54 in June and I have about 3 years until I can retire. My first question is..If I continue these hours, how does drawing comp effect my high 3 average or does it? My second question is…..I will qualify for the special supplement if I retire at age 57 (33 years). Are federal or state taxes taken out of the Special Supplement? 3rd question…Does getting the supplement reduce my regular SS when I’m 62 or beyond? Thanks again…God bless you…TS

A 5. Hi TS, Yes…writing this column and answering all of the readers questions….MUST be UNDERSTOOD….this obviously is a labor of love. I’m not paid for writing or answering emails…….I do it because everyone seems so lost and no one will tell them what is really the truth. And there are mountains of misinformation I see every day, in emails received from employees. It doesn’t seem to get any better, but increasingly worse.

So if you are working 6 hours and I’m assuming OWCP is paying for the other 2 hrs per day. That will have some financial consequence when you retire. You will never see it on an annuity estimate because the annuity estimate is simply a “snap shot” of your last 3 years of “salaried” form 50 history. So yes it will have an effect in your FERS annuity…(but not enough for you to get “heart burn” over).

If you retire with 30 years or more, and are at your MRA, or over, then yes you will be eligible for the Special Supplement. No taxes are taken out the Special Supplement, (because in theory….it’s the replacement for Social Security) and it is paid by OPM not Social Security. It will last until age 61 and 11 months….because regardless whether you take Social Security at 62, the Special Supplement will STOP. I hope this has helped clear that up for you. Roseanne

Till we speak again………….Roseanne

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  • Jody Spitzer

    Hi, Roseanne. According to what I’ve read in OPM’s guide for FERS annuitants, page 12, the earnings test is not applied until THE FIRST CALENDAR YEAR you receive the supplement. I take this to mean it does not apply until the year AFTER retirement. Please clarify, thanks!

  • terri

    hi Roseanne, I turn 60 in September and hit my 30 yrs creditable service October 7 and I plan to retire then and of course I’m FERS and my question is “since I’m retiring near the end of the year, does it mean I won’t receive any ss supplement until January 2017 because of the amount of my income for 2016?”

  • terri

    hello Roseanne, it’s been 7 days since I posted my ss supplement question

  • terri

    and

  • terri

    i stiIl haven’t heard from you.

  • Steve

    I believe part of the response to ES may be incorrect as to what constitutes your high 3. From several sources I’ve seen, night differential IS included in computing the high three for craft employees. Please correct me if I’m wrong.

  • Nancy M. Weathersby

    Hi Rosanne:

  • Nancy M. Weathersby

    I am nearing retirement, probably sometime in January. Could you tell me if there will be an early retirement pay being offered soon? Also, after retirement; how soon will you receive your annual balance payment and your retirement check?