Retirement Counseling Tips

Jason 0 Comments March 1, 2024 Retire Wealthy Retirement Planning Tips for Retiree's

Hello and thank you for attending today's webcast on retirement counseling tips My name is Joy Fisher and I'm Patricia Sapol and we are from OPM's benefit officer development and outreach team We have an allotted time of one hour and a half for today's presentation And there will be an opportunity to submit your questions for any questions that you may have. You may email Benefits at opm.gov and the subject line, please add Retirement counseling tips so that we may address your question during today's presentation Our objectives today are counseling and retirement planning tips common causes of retirement delays and retirement resources We will explore key times in the federal career that are significant and optimal times to maximize opportunities to educate our employees on their benefits and retirement planning tools We will also discuss the most common items that contribute to retirement delays and how to reduce or eliminate those errors and Finally, we will share some of the many resources available for retirement planning As we will touch on a variety of topics during today's webcast we want you to have the references that are available from the CSRs and FERS handbook The Code of Federal Regulations, and we will talk about a few of our benefit administration letters specifically submitting a healthy retirement application package as you know the handbook the code of federal regulation and BLS will cover everything from coverage Determining retirement coverage credible service how to plan and apply for retirement and everything in between Retirement counseling is so important throughout the federal career We find optimal times to retire to to teach our choice about retirement from the very start of their employment So from your new hire orientation? planning to key times such as Mid-career pre retirement and the retirement eligible we continue to educate our employees on their benefits and retirement Educating employees about their benefits is a career long process which provides them the Poison needful to set and reach their retirement goals this approach ensures that as life changes Throughout their federal career employees will be equipped with the knowledge and tools they need to make sound decisions Employees should be aware of the agents service requirements for retire the options to enroll and change their benefits and their insurances as life changes and how to navigate those tools and the resources that are available to help them plan financially By identifying addressing these educational needs during key points throughout their federal career We are equipping them and greatly reducing the anxieties that may come as they near retirement When retirement planning is a part of the career planning process Employees would know how to build a solid retirement base to which they can contribute Their throughout their years of their government service The agency is responsible for providing that ploy and all inclusive presentation covering all of their benefits and retirement planning tools As I mentioned the new employee is Although they're coming in fresh and started and have a lot to learn This is a great opportunity to start them off and the right on the right foot with learning about their benefits and their total compensation including their benefits and retirement the newly employer Federal employee at this time.

They are new hired after 2014 are covered under the Federal Employee Retirement System federal employee Was you're sorry? Free so it's um, the Further revised annuity employees So these employees should understand that they are covered by the first and what their contributions should be. So the Employees that are not under a special retirement coverage. They will be contributing 4.4 percent towards first Previously under fers-rae which is first revised and new employees. Those employees were contributing 3.1 percent if they're not under a special retirement coverage and prior to this FERS just Federal Employee Retirement System those employees were contributing point eight percent so although the contributions may vary the benefit remains the same you can find more information on how to determine what type of Contribution these employees are on ba L 14 – 107 which provides additional guidance and also a contribution rate table and Determination table to learn how the employees should be contributing based on their service time since first is a retirement plan that provides benefits from three different sources is Importance for the new employee to understand what they're paying into and why? They will be penny – first which is that basic benefit.

They will contribute to Social Security which list listed on their earnings and leave statement as OASDI standing for old age survivors disability insurance and Also, the new employee is contributing to TSP with an automatic contribution of 3% They should understand how to maximize that TSP benefit by Contributed at least 5% knowing they would get the full agency matching as well of 5% Understanding that if they contribute anything if they don't contribute anything at all The agency provides it automatically 1% contribution They will match dollar for dollar on the first three percent and then 50 cents to the dollar on the next two percentages it Is imperative for employees to understand their service computation date and also know that there's several of them not just one They should understand what their leave service computation date is what service is included in that SCD? They should understand how that affects their leave accrual They should understand what the retirement SCD Covers and what is all what services included in that and why they may differ they definitely want to know about that TSP SED and that it that also Controls their vesting date So with 3 years of civilian service having them vested to keep that TSP contributions the automatic ada seaman contribution so you wouldn't be able to explain to the employees all of their SCDS what in the fest and if there's anything needed to they need to do like Deposits for military service or a civilian service that was not covered under a retirement system To change or if they can change that SCD, especially when it comes to retirement at this stage it is very important for the employees to identify any served previous service that they may have and we want to get those records and Reconstruct that SCD if necessary so that all of those are pool dates are correct You want to make sure the employees understand the resources that are available to them whether that is an internal retirement Calculating tool a benefits tool where they can find out what their there Deductions will be such as the FE HB comparison tool or FEGLI calculator that is on the OPM's website You give them all the knowledge that could equip them with all the knowledge that they need So that they are able to make sound decisions on their benefit election as life changes TSP also offers several bit web website their website offers several videos and Other tools to help those new employees to decide on what they want to contribute whether it's the Roth or the traditional TSP It explains different options on how to maximize their benefit even having TSP calculators So just giving them those tools to navigate the websites.

No understanding What all the tools are available at resource are available to them to equip them or what? They need to make sound decisions for them and their family members Equally important is the pre-retirement Just as important is the new employees where the ploys are not quite eligible for retirement, but they're nearing the pre-retirement stage They should be aware of what they should be Financially preparing for for them and their families they want to make sure they review their records and everything is in, Texas We've already made sure that as a new employee stage that we've identified all service And we've reached out and received all those records We want to make sure that everything is accurate and complete in their records at that time if they need to make changes to their records such as Beneficiary forms they want to make sure they do that.

They have everything up-to-date and accurate at that time They want to start thinking about their health and life insurance and what the requirements are to continue those insurances and to retirements Thinking about survivor benefits planning what a benefits will be available to their survivor upon their passing Thinking about what what is my retirement eligibility date? How are you identify what that dave is and work you towards that date making sure they're both Painting financially and also making sure they have their requirements for benefits to continue that into retirement Financially playing about the commitment date of their annuity Thinking about there are some checklists available on OPM's website in chapter 40. You actually have the CSRs and FERS handbook There are some checklists to help employees to think about what they need to do to plan for their retirement that was from the assurances to Ensuring their records are complete to thinking about survivor insurance of our benefits. Just everything everything in between There are some checklist available in chapter 44 that which is part of one of our references that we showed earlier So at this time, they're already started thinking about their retirement date What will my retirement date be I now understand you've equipped me with the knowledge and tools to understand? What what I need to retire, I understand the age and service requirements, but what is that date? What will that date be that I'll retire So while employees may be to choose any date once they are eligible for retirement for FERS We should advise them that for the let if they retire at the last day of the month Not their annuity will begin to accrue the very next day while CSRs can retire the last day of the month or the First second or third day of the month and their annuity will also begin to accrue the very next day They should understand that while they may choose any day that they are eligible Should they retire in the middle of the month that it will still not begin to accrue for their retirement? annuity until the first other month depending on their retirement system They need to think about leave accruals.

Sometimes we may choose a date of the end of the month for first but it may not necessarily be the end of a pay period so Understanding how the leave accrues and knowing that if you do not work the full pay period the lilee that you're planning on Happening for that lump sum payment may be a little bit different because you did not earn that last Eight hours if you have you know, the amount of service for eight hours Or four hours of sick leave eight hours of annual leave or four hours of sick leave So understanding that that retirement date could affect my leave accrual and so if you're planning but might your gross Leave lump sum payment understanding the differences that may occur because of that Starting to think about that interim pay status and how I need to financially plan and prepare for that What is interim pay that means I'm not going to retire.

I mean I pick my retirement date Am I going to receive that my full retirement right away? No, so understanding that when that annuity is received you will first be in an interim pay status Which is averages anywhere from three to six plus months Before you actually your retirement is actually finalized and you have received your final annuity So that's the women selecting their retirement date We want to think about that. Am I financially prepared for those few months or so of the interim pay status? Again, reminding them about that health and life insurance Continuation making sure they met the requirements to continue that health insurance or that life insurance. Should they want to carry that into retirement? So this always before we select a mid-career Pre-retirement thinking about all those different types of things that we need to help be prepared for So that we can retire happy and stress-free We talked a little bit about leave balances annual leave and sick leave so the annual leave when the ploys retire will be paid out in a lump sum balance and With the taxable income will be based on when that lump sum balance is received So that could be a few weeks after Retirement and that is paid by the payroll agency while credit for sick leave differs for CSRs CSRs offset and first all credible unused sick leave will be Converted and add it to the total service time So for a CSRs employees that may have reached 41 years and 11 months of service Instead of they can actually a seed that maximum benefit of 80 percent by including that sick leave time So it's a great benefit for all of our retirement covered employees.

There is a sick leave conversion chart You may find that it's also a link to one of the references that we showed earlier in the presentation It is the agency's responsibility to provide a retirement annuity estimate the note of the annuity estimate is such important tool for a resource for our employees to properly plan for their retirement, especially Financially we want to provide them all information to make a sound decision so if they have service time that requires your deposit if they have military service that they may want to pay a deposit for or They're retired military and they may want to they're considering waiving that military retirement pay to be included in that civilian time We want to make sure That we provide them all of these different options so that they can make a sound decision And move forward with that decision in their retirement goal They have unpaid deposits and redeposits We want to do the needful just to show them how they can obtain the annuity statement the account statement for that so they even if they choose not to pay that they'll be aware of what the cost is and how to pay that to OPM for that to be credible towards their retirement We want to make sure that they understand that since they're paying into Social Security if they're under FERS That they may be eligible for FERS annuity supplement Which is ll2 if they're eligible for will be paid out to them from OPM until the age of 62 They are that's another counseling tip is you want to make sure they know during interim pay While they are if they are eligible for FERS annuity supplement They would not be paid this supplement during interim pay however it is Retroactive so it will be paid once their annuity is finalized.

But that is definitely a financial planning tip that they need to understand about that first annuity supplement if eligible, but if you have the information Please also include that first annuity supplement in their estimate so that they have all those different sources of income to plan financially for retirement Should they have several different options? They're considering there may be eligible for it a minimum retirement age with ten years of service But also considering postponing that retirement to hopefully avoid that age reduction If you want to show them those options and explain how their benefits will work with both of those options So equip them with all the tools necessary to make a great decision That they can be happy with their retirement plan and reach all of their goals So again going back to that new hire the credible service is so important We want to make sure we have identified and obtained all the records for that employ federal career if there's any previous civilian service for which The deposit needs to be made we want to counsel them on this provide them the information Needed to make the decision and help them with the procedures to submit that application to OPM to start making those payments we want to talk about military service and Understanding that if your FERS employee or depending on when you were hired for CSRs employee that that time is not credible Unless a deposit is paid thinking about that and also understanding that that military service must be paid while at the Agency while you do have an option to pay civilian service after retirement by lump sum payment to OPM Because both have interests that accrue.

It's definitely better to be prepared to do that earlier on in the career that's why those retirement planning options and that planning counseling tools are so important to our employees throughout their federal career So they have the information they need and if they're able to make that deposit that time or at least work towards those deposits They can do so again Military deposit must be paid prior to separating from the agency So our next slide talks about civilian service deposits for CSRs I mentioned that depending on the dates of when service is performed Could determine how those that naughty touch to the service may affect the CSRs employee? So a deposit is the payment for a period of employment retirement deductions were not withheld from salary Employees are not required to make this type of payment for CSRs But they have that option if they want this time to be credible depending on when that service perform they may want to make that deposit so that they maximize their benefit with all of their service a Deposit may be pay for credible civilian service performed before 10/1/82 During which with how many dustin's were not withheld from paid Retirement credit will receive for all of this service whether or not the deposit is paid.

However A lesser deposit is paid in full at retirement that annual benefit will be reduced by 10 percent of the deposit including interest a redeposit is the repayment of retirement deductions that were previously withheld and Refunded plus interest if their ploy to make a redeposit refund for a pyramus service that ended before March 1st of 1991 this monthly annuity will be actually reduced based on the amount of the Redeposit do including interest divided by a factor for their age at retirement if the refund was support period of service that ended after March 1st of 1991 if the Redeposit is not paid.

The employee would not receive credit for the service in the computation of their annuity CSRs employees with a would complete the standard form to 8:03 application to make deposit or redeposit Deposit which is certified by their Human Resources office once submitted to OPM OPM will send the employee an account statement along with payment instructions Once notified of the amounts due employees will have what is needed to decide whether or not to begin those payments? Employees should be counseled at all. They may complete this payment after retirement by lump sum by OPM their annuity would not be Finalized until this decision is reached within the time allotted and this could cause a delay in the final computation computation of their new ateam For our first employees, they also can have non-deduction service Performed before January 1st of 1989 that non-deduction service with a few with a few exceptions such as Peace Corps Vista The we are not eligible to make a deposit after January 1st 1999 for not induction service however service performed before December 30 before January 1st 1989.

They may make a deposit similar to the CSRs If the FERS employee does not make a deposit for non-deduction service that time is not credible at all towards their retirement or eligibility For refunded service If they do not pay for that period of type of service they will receive credit and determine eligibility To retire but what not to receive credit for this service in the computation of the retirement benefit interest is charged on the day of the refund and Compounded annually and interest is charged to the date full payment is made or the day annuity begins. Whichever is earlier We spoke a little bit about military service So we have many of our federal employees that have performed honorable active duty service or it may have even retired from the military we need to explain all of their options in both situations the employees that have had post 19:56 in Military time should know what their options are as far as a military deposit as far as as well as what the deposit amount of DU will be Remember that this must be paid from the a at the agency This must be paid prior to retirement at the agency if the employee is considering like I mentioned earlier waiving that military retirement pay making sure they understand what that involves as well as Providing an estimate of that so they can compare that military retirement pay The deposit old if should they waive it as well as what the civilian retirement will be with that military retirement waived Retirement eligibility is another important aspect of retirement counseling Helping understand why and how employees are eligible will help employees make the right decision in choosing the type of retirement that best meets their needs or wants and needs agencies are encouraged to help employees understand the difference between each type of option and walk them through understanding what each type requires we know that the most common type of retirement is under a regular or voluntary optional retirement where an annuity begins to accrue Immediately now for these for this type of retirement the employee needs to be 60 years old with the minimum of five years or service Or be 60 years old and have 20 years of service on certain employees May also qualify under this voluntary option without any age reduction if under CSRs if there are 55 with 30 years of service and under FERS They may retire at their minimum retirement age are commonly referred to as the MRA Which may be be between 55 and 57 depending on the year? They are born with 30 years of service or other MRI MRA with 20 years of service Now some employees may be interested in retiring under a voluntary early retirement Authority or veera Otherwise known as an early out however They need to understand that this option is only available when the agency is able to provide them with this option Vera is an option used to assist agencies in completing a major personnel or workload change with minimum disruption so in this case employees need to be 50 years old with and have 20 years of service or any age with 25 years of service in order to be eligible to accept Avira early I early-out retirement option The employee must be serving in a covered Position to be able to take this option and be serving in that position for at least 30 days They must separate during the Varia period and be off the rolls by the close of the veera period it's important that employees understand that this is a requirement if they decide to choose a veera option other employees might qualify under a discontinued service retirement And this is a type of retirement available to employees.

Who are I'm Voluntarily separated and who receive a written notice of involuntary? separation that written notice will be It needs to be included as part of the retirement package in order to qualify for a DSR annuity examples of DSR include reduction in force abolishment of positions and lack of funds if Separation was due to misconduct. Then the employee will not be eligible for a DSR So it's important to know the distinction and be able to explain to employees the distinction that we'll be able that will qualify them for a DSR Certain employees may qualify for disability retirement if they meet a Comprehensive list of requirement only after an employee has provided the agency with complete documentation of their medical condition and the agency has exhausted all attempts to retain the employee either by Reasonable accommodations or reassignment on their first an employee must have completed at least 18 months of federal civilian credible service in order to apply for it for a disability while under CSRs They must have completed five years of service and be any age Now under this disability provisions employees need to understand that the disability must have occurred prior to Retirement and the disability should be expected to last for more than one year The disability does not have to be work-related in order to receive of annuity from OPM Employees covered under FERS who separate from government service Before meeting the agent service requirements necessary for a voluntary optional Annuity can qualify for a deferred Retirement where they can start collecting their annuity at a later date when their I am turn age 62 or at their MRA if they have 10 years of service Now if a first employee separates after reaching their MI MRA with at least 10 years of service they can postpone Receiving their annuity until the appropriate age to reduce or eliminate the h reduction In with this option the important the key thing to understand is that employees can suspend their health and life insurance benefits Until they start collecting their annuity They they are going to have the option to elect when their annuity can begin But they must start withdrawing at age 62 employees that choose this type of retirement Can later apply directly with OPM by filling the application for deferred or postpone retirement Which is they are I 92 – 19 within sixty days before they want this benefit to begin There are also certain Lawson that allow law enforcement officers air traffic controllers firefighters or military reserve technicians personnel to retire at any age with 25 years of service or at Age 50 with 20 years of service for those of you that are interested in learning more about this special type of retirement We have a separate webcast on our youtube channel called first law enforcement and firefighters special retirement provisions Which discusses in depth the special retirement? For these type of employees keep in mind that an employee may be eligible for more than one type of retirement But as always it is the employees choice on which option to elect.

I Like joy stated agencies are responsible for providing employees with the retirement annuity estimate So when a retiree an employee receives their annuity estimate There may be some questions regarding how their annuity was calculated use age. These are encouraged to use This estimate to allow employees to see which factors were used in calculating their annuity Their first factor as many of you guys know it's the their high three salary which is based on the highest average basic pay earned during any three consecutive years of Service, these three years are usually towards the end of an employee service but be aware that can it can occur at an earlier period if the basic pay was higher during that period the other Factor used in the computation is length of service or years of credible service Which is all periods of credible service both under civilian and military Service in any on use sick leave make sure employees have submitted all deposits and redeposits So that all their service is included in their computation Another key point in employees annuity is the first supplement like joy stated earlier employees must have completed at least one Calendar year of first service and must be under must be under the age of 62 to be eligible The supplement is going to stop when the retiree turns 62 Even if the annuitant is not eligible for Social Security Benefits or if they choose not to apply.

So this is an important aspect to cancel your employees on that It will terminate once they turn 62 Those employees that choose Choza d. Sr. D sr. Or veera Retirement option will receive the supplement once they reach their MRA however, those that have a Are collecting a deferred disability or mi plus ten? Retirement annuity are not eligible to receive the supplement knowing how these factors are used in their Computation will help employees better prepare for retirement and perhaps consider Delaying their retirement that date or even postponing their annuity It's important to also let Your employees know that they will be receiving an annuity payment once a month which is paid each month that covers a period for the previous month that we'll also want to know that AB nuit II payments are a Lifelong benefit and will only terminate on the day the annuitant dies or other terminated events provided by law It's important also to discuss reductions to the annuity use that retirement estimate to help employees understand that they may They may have their annuity to reduce due to several factors The first one is age if the employee retired under the MRA Plus 10 provision.

For example Their benefit will be reduced by 5% For every year that the employee is under age 62 on the date the annuity begins However, the annuity will not be reduced if they've completed at least 30 years of service Or if they have at least 20 years of service and their annuity begins when they reach age 60 Now if they choose to postpone the beginning date of their annuity the H reduction Will be eliminated if they start collecting at age 62 Now the H reduction applies to both CSRs and FERS components Of the annuity if they if they transfer the first and part of their annuities computed under the CSRs provisions CSRs employees retiring under a veera or Adsr incur a 2% reduction for each full year of every month that they're under the age 55 This is a permanent reduction That will not go away when they turns 55.

So make sure the employees understand this that this is a permanent reduction to their annuities another factor that may reduce their annuity is survivor benefits if they're married their annuity will be Reduced for a survivor benefit unless their spouse consents To their election of less than a full survivor benefit if the total the survivor Benefit they elect equals 50% of their benefit. Then the annuity is going to be reduced by 10% Which in if the total equals 25 then the reduction is 5% for CSRs survivor benefits The cost is going to be 2.5 percent of the first 36 hundred of the selected based annuities Plus 10 percent of any remaining selected base Other the reductions to identity will be based on Unpaid or refunded service, like joy explain and remind employees that if they did not pay a deposit for CSRs non-deduction service performed before October 1 82 their annuity will be reduced by 10% of any Deposit owed and if they did not make a redeposit for CSRs refunded service performed before October 1 of 1990 they will have a CSRs portion of their non disability benefit reduced by an Actuarial factor now under FERS employees need to be aware that they will receive.

They will not receive any credit on their annuity for non-deduction service perform after January 1 1989 Now for CSRs offset employees, there'll be a reduction or offset at the age of 62 if they're eligible for Social Security Benefits by an amount equal to the Social Security benefit. They earned as a CSRs offset employee they need to know that the offset is Automatic and will happen if they don't apply for a Social Security benefit employees also need to consider deductions to their monthly annuity for example health and life insurance premiums and federal tax withholdings, which will be we will discuss next on slide number 18 They will need to account for federal and maybe state tax withholdings from their monthly annuity check as well Generally unless they specify a monthly withholding rate amount on their retirement application by submitting a new w-4, or Indicating they want to keep the same withholdings They had as an employee OPM will withhold federal income tax as if they were married and claiming three allowances okay, they may also submit the w-4 PA, which is Their Election of federal income tax withholding to OPM after they retire and Change to change those withholdings and they may also do that those changes online once they are retired OPM will provide a form 1099 – our Detailing the annuity payments received during the previous year I know attends receive this form around the first or second week of February Just in time to file their taxes and engines this may get a lot of questions About this form even after an employee retires So make sure to let them know that OPM is the one that will issue that 1099 are Now if employees wish to have state tax with whole with help from their annuity They must specify a dollar amount of the state tax they want withheld from their payments The withholding must be in whole dollars and the minimum amount They can with we can withhold for state income taxes five dollars they can also do this elections online that can start change or stop state tax withholdings during using the annuitant portal Now in most cases retirees will receive a cost-of-living adjustment or Cola Now it's important to advise employees and make sure that they understand that only in certain situations they will Be allowed to To have this increase in their annuity payments for both CSRs and FERS employees and their Survivorman Dependents that amount will be based on the rate of inflation as measured By the Consumer Price Index the 2019 Cola rate For CSRs this year is 2.8 percent while the first is 2.0 percent and this actually came out in October of 2018 Now the cola rates are going to be Increases are going to be effective on December 1 of each year and are applied to the annuity payments made the following month It will appear on the first business day of January colas for those retired less than one year are actually Prorated according to the date in which they retired for example if an employee retires in January, their first adjustment will be made in January of the following year and will be prorated for 11 months of the cola amount if they retire in February, it will prorate it for 10 months and so forth for CSRs employees, the increased percentage is going to be applied To their monthly benefit amount before any deduction and it's going to be rounded down to the next whole dollar Now the cola for first is a little bit different and your first retirees need to understand that they will not be able to collect To receive a cola increase until after reaching age 62 The first Cola increase is calculated differently than CSRs if the increase in the CPI is 2% or less the cola is equal to the CPI increase if the CPI Inc increases more than 2% but no more than 3% then that cola is going to be adjusted to 2% if the CPI increases more than 3% then the adjustment is 1% less than the CPI increase and that new amount is going to be rounded down to the next whole dollar Additional information on colas can always be found on the OPM website on or on chapter 2 of the CSRs and FERS handbook Now in preparing for retirement employees need to know that their health and life insurance coverage normally must be in effect continuously for at least five years before the retirement date or They'll be ineligible to carry this important benefits into retirement The employees also have to have been retired under an immediate annuity and be covered under the Fe h b on the date of retirement and this is important for employees to understand if they were covered under another coverage either Through their spouses.

Fh we are TRICARE and they would like to continue fvh be on their own as a retiree They must be enrolled prior. So it's always recommended for employees to Enroll during the previous open season before they retire Now OPM has the authority to waive the five-year Participation requirement when it determines that it would be against equity and good conscience not to allow a person to be enrolled in the FE HB program as an annuitant, however They love specifically states that it must be due to exceptional Circumstances so OPM almost never grants this waiver Now the premiums for FHP will be the same for the annuitant as they were for the employee however They will be withheld on a monthly basis rather than bi-weekly basis because the annuitant only receive one Payment a month and they will be deducted on a post aspect Basis since retirees will not be eligible are not eligible from premium conversion Now employees face a very important survivor Benefit decision at retirement if they elect a survivor benefit it can provide their survivors their surviving spouses with both a monthly annuity check and Continuation of their FHP coverage for the rest of their life unless of course, they remarry before age 55 so making sure that employees understand that a surviving spouse Can only carry FHB coverage after the annuitant dies if a survivor annuity was elected without a survivor benefit that spouse loses coverage 31 days after the retirees death Now if the annuity of the retiree or the spouse's survivor annuity doesn't cover the monthly premium the premium Can be paid directly to OPM now there you may have some employees that may want to cancel their FHB either because they're going on their spouses Coverage or for any other reasons they need to understand that they will never be able to re-enroll unless they suspend that to enroll in a Medicare managed care plan or if they're eligible for Medicaid if they do choose to cancel their coverage, it won't be effective until after the starting date of their annuity Okay, it's also good to remind employees that retiring is not a qualifying life event.

They won't be able to change enrollment at retirement However, once they retire they can change their enrollment during the annual open season or when they experience a qualifying Life event if the employee is not eligible to continue health benefits coverage into retirement the agency must advise individuals of the right to temporarily continue coverage on their TCC they must though Understand that they will be responsible for paying both the employee and the government shares of them only monthly premium plus that 2% of ministration charge Now some employees may have already been eligible for Medicare if they're aged 65 for those retirees that are not they will become eligible under both first and SURS when they turn 65 there will be Eligible for Parts A which is hospital insurance and Part B Which is medical or physicians services? The Social Security Administration will automatically contact their retiring about enrolling in these plans They will also have the option to enroll in Medicare Advantage Plans C which is a private health care choice like an HMO or Part D Which is a prescription drug coverage however, they need to be aware for that parts B through D are optional and there is a cost associated with Enrolling in these options Your employees can always visit medicare.gov for more information on the cost and eligibility now once retirees you know elect to enroll in Medicare Medicare will be the primary payer and AF ehb will be secondary This is important because they will need to know how the coordination of benefits will pay out when they receive medical bills Like I mentioned earlier if employed cancers there FHB enrollment as an annuitant they will never be able to enroll in FHB However, they may suspend their enrollment in order to enroll in a Medicare Advantage plan TRICARE Peace Corps Medicare or a similar state-sponsored program Of medical assistance, they cannot suspend their fhb enrollment if they're covered by Medicare Parts A and RB only in Retirement annuitants can only apply to suspend their coverage at any time by contacting our retirement information office and submitting all necessary documentation to show Eligibility for TRICARE during the period beginning 31 days before and ending 31 days after the date They become alleged eligible under TRICARE or another program now once they suspend FHP coverage they can later voluntarily Re-enroll during an annual open season We will send open season packages each year with instructions on how to re-enroll But if they involuntarily lose coverage under one of the programs mentioned on on this slide they can enroll in Fh be effective the date after they lose coverage If provided they provide evidence of in their involuntary loss of coverage Now if they wish to cancer their enrollment for any reasons other than to be covered under families at BHP enrollment They will not be able to re-enroll in FHP and will not be entitled to receive the free 31 day extension of coverage or to enroll in TCC those are the major Differences between cancelling and suspending fhb in retirement Remember it is the agency's responsibility to assist the employee in completing their retirement package But remind employees that there may be some processing delays in their application if there's missing or inaccurate information We found that there were several factors that would cause a process Processing delays in regards to health benefits the single most common error found in retirement package was failure to document the five years of coverage Or from first eligibility and through all periods of eligibility of less than five years We will like documentation of an employee's coverage for their entire career possible But at a minimum we must have proof of the five years of coverage immediately prior to retirement about 12 – 103 Which is titled submitting health or repair retirement packages States some of the acceptable alternative proof of coverage one is they can submit the SF 2809 which is the health benefits election form or the 28 10 the notice of Change in health benefits enrollment as proof.

They can also provide history repros from online enrollments that show The enrollment copies of screenshots or other documentation, but for a more comprehensive list You can always visit that about 12 – 103 Another factor in processing the latest failure to submit the certification of eligibility of the five year enrollment requirement when an employee appears to be eligible under a Veera The certification of eligibility must be submitted with the retirement application We've also published several webcast Describing form by form what information we're looking for to enable Agencies to complete and accurate packages that will avoid delays and in those packages Now it is important for employees to understand we're on life insurance slide number 26 It's important for a place to understand how their FEGLI benefits will change into retirement They need to know how to elect affordable coverage before making a retirement election There are multiple online resources that will help them understand These options and how much they will have to pay per month of the coverage they need The first thing that they need to consider is that just like fe HB, they're eligible to continue Basic and optional life insurance if they have been enrolled in FEGLI for at least five years immediately preceding retirement Employee must also be enrolled in FEGLI on the data retirement lampole will have the option to retain the full amount of their basic FEGLI coverage or elect a coverage reduction for their basic coverage amount they'll have To choose the amount of basic insurance.

They want to continue after age 65 or At retirement if they have already reached a 65 the choices are a 75% reduction a 50% reduction or not reduction But have your employees use that FEGLI calculator on the OPM website to help them determine the value of the various combinations? of the FEGLI coverage It will also help them calculate the premiums for the different combinations of course of coverage And and it will show them how to choose different options And what they will be able to see how the life insurance Carried into retirement will change over time as well This is a great tool where they can quickly and easily find estimates about continued coverage into retirement Coverage for optional coverage life Optional coverage into retirement is a little different when they retired and reach age 65 option 8 coverage automatically begins to reduce by 2% of the pre-retirement amount each month until 25% of the pre-retirement amount remains option a is free once it starts to reduce there is no reduction election to make at the time of retirement for option a Now employees must choose however how many of their option B in or see multiple? coverage they want to continue now the cost of be multiple coverage if they choose to keep it into retirement becomes very expensive and increases with age And retirees must carry Basic insurance in order to elect any of those the three options on like basic enrollment though Optional insurance is voluntary and they must apply for and select the options they need and can't afford again Using that FEGLI calculator on the OPM website will help them determine the best option That they can afford into retirement and that in the option that they need to cover their loved ones Now if the retiree changes their minds once they start collecting their annuities they may cancel Basic or optional at any time unless they have assigned their life insurance they need to know that they cannot increase their coverage after retirement or Reinstated if they had canceled it at retirement Just like fvh B We found several factors with submitting FEGLI documentation for coverage after retirement that would impact an employee's Retirement application again, it's important for employees to know these these type of situations that could delay their application the first common error found is again providing that documentation of five years of eligibility We want to see an employee's coverage for the entire career Wilkes will accept the S of 2017 life insurance election form and the SF 50 showing any FEGLI changes in the five years immediately prior to retirement as acceptable proof of coverage Also be aware that will not we will not accept Corrections on the form any scratch outs wideouts lineups or any other type of Correction actions and either the continuation of life insurance coverage the 28:18 Or the designation of beneficiary for FEGLI which is that standard form 2823 Now new forms must be completed in lieu of any alterations to previous for it for any Corrections made on these forms About 16 – 102 however provides additional guidance on Corrections made on uncertain benefits elections Now employees may also be able to carry their dental vision and long-term care benefits into their retirement They will not have they do not have that five year rule to continue these benefits the only interesting point that employees need to know is that They should contact benefits directly to make arrangements for premium payments prior to receiving an annuity annuitants may enroll as long as they're eligible for fe h b Regardless of their FF PHP status as long as they retire on an immediate retirement under the federal long term care insurance program of or fltcip Retirees and qualified relatives are eligible to continue benefits and just like fedvip They must make arrangements with LTC partners to ensure that there's no interruption of their premium payments There are no government contributions made towards long term care premiums And retirees will have similar option plans plan options to those as they had as employees now unlike fedvip and long-term care employees are not able to continue their flexible spending accounts or FSA's into retirement The law allows FSA along allotments only from salaries not annuities so FSA coverage will terminate However, though it will terminate a retirement.

However Any reimbursable expenses made prior to the retirement will be reimbursed or paid once the claim is submitted Let's talk about tsps We all know TSP offers several options for withdrawing the monies from from your account when making the decision about what to do with their funds employees should be encouraged to think about their income needs and the Lifestyles, they would like to have after retirement Hopefully they'll be TSP millionaires where they won't have to worry so much But that may not necessarily be the case for most of us The decision that retirees will have to make on withdrawing their money Depends on their specific goals do they need money right away? For an important purchase do they want to avoid paying taxes for as long as possible? They want to receive a payment every month that they want guaranteed income to last them a lifetime So considering all these options o their personal goals, it's what it's going to help them determine What kind of withdrawal options? They want to take retirees will have two main options for withdrawing their TSP fund They can make either a partial withdrawal or a full withdrawal Under a partial withdrawal a well It allows them to make a one-time-only withdrawal and leave the rest of the money in the TSP fund until a later date They can also withdraw their money all at once over Over a period of time or they can purchase an annuity that will make payments to them for life For maximum flexibility though.

They can choose any combinations of the full withdrawal options Now if they decide to leave their money in the TSP, they will no longer be able to make contributions Into that cap will we continue to but but their funds will continue to accrue interest TSP will notify them that they must at what point they need a start receiving payment They essentially taking withdrawing the funds by April 1 of the year following the year in which they turn age 70 and a half so at 17 and a half years old.

They will have to start making some of the those withdrawals Really the withdrawal decisions should be based on whether or not they have other resources of retirement income All of their resources, you know Should be taken into account when making this decisions now They should also be aware of possible tax penalties On early withdrawals in general TSP withdrawal payments are subject to federal income tax however Different tax rules will apply to different withdrawal options as well as to the type of money whether it was traditional or Roth contributions that are included in that funds in the fund Now while in retirement retirees will not be able to make contributions or take out TSP loans But they can they can also they can certainly move the funds around do and make interfund transfer as They wish there's a great deal of resources available on the TSP website that can help employees Determine the best TSP withdrawal option for them They have access to retirement income calculators and monthly payment calculator in different publications on cash out taxes distributions and also information on possible of changes in withdrawal options Now once agencies complete counseling employees about their benefits and retirees It's important to sit down and review the completed application With the employee ensuring that all blocks are properly marked and that it has been signed explained to the employee how their retirement application will be processed by your agency and then later by OPM Explain to them how agencies will audit in An organized a retirement package to make sure the certified Sam your Federal service The agency checklists are completed as well as FHP and FEGLI documentation is included then they will send the applications to OPM after payroll certifies all the deductions You know another talking point would be to Know making sure the employee understands that OPM cannot begin to process a retire minuite Until after receiving a completed application and all supporting documentation of that employees service history Explain how OPM's respire I'm sorry payrolls responsibility ended up in the process or authorized to make that final paycheck of a Lump sum payment for unused annual leave.

They're also responsible for issuing and closing out the IRR Whether it's the SF 2809 Hundred for first Which reflects all the service history all the salary history and the contributions and then forwarding that information to OPM If the retirees get a thorough understanding of how the process works it will make them feel more comfortable with the process Which in turn can alleviate many misunderstand? misunderstandings after retirement Now always encourage Verifying service. It's the next slide site number 32 I think it's important to always encourage employees to do their due diligence when there's missing Service history in their packages allow them the opportunity to find missing documents on their own Maybe you know providing them with the key contacts if needed now if they're not successful, then the agencies certainly step in and Try to find the information through their sources by first contacting, you know the federal records Center or by checking their retirement data viewer or EHR I now if that agencies benefit officers does not have access to it EHR I They can contact their OPM liaison for more information on how to request access now if none of these sources work agencies can always fax the request for a missing service history to our boyars at Fax number seven two four seven nine four six six three three now Remember that that fax number is only to be used by agencies Processing Herman estimates and if employee is requesting information on their own they can always write OPM for that request right directly to our operation retirement operations mailing address, which is in one of our upcoming slides Priority is always going to be given to the agency request because they're processing retirement estimates so, um, the agency will always get the priority for that information now if all else fails OPM will complete the verification at retirement of any missing a service upon receipt of the application and the rest of the records However, this can cause significant delays in the processing of that retirement Again employees should be aware of some of the most common errors in process in retirement so that they can avoid making them and avoid having their package delayed and hopefully assisting the agencies in trying to fill in any of the gaps This information again can be found about 12 – 103 which discusses submitting healthy retirement packages The first one is missing periods of credible civilian and military Services again all periods of credible civilian and military services must be listed on that certify summary of service Also, if a married applicant elects less than the full survivor annuity Remember the spousal consent must be provided and the election On the application must agree with the spousal spousal consent This will require certification by a notary so the notary signature they must match the spouses signature date That's very important the retirement application must not be turned in a More than a year later from the date that the notary signed application.

We actually have Received a lot of those inquiries regarding the different dates After the notary signs that certification and of course a marriage certificate must always be included with those with those elections Now for each period of service not covered by retirement contributions Or FICA only service all pay rates and effective dates must be listed on the application Lastly if an employee is receiving or had previously applied for military retired pay ur benefits From the VA in lieu of military Tire pay make sure to attach copies of the military services service determination if the employees military disability retirement was service-connected & incurred in a combat or caused by an instrumentality of war This information is needed to assure correct credit for that military service.

It's applied to to their their benefit Now the main thing to remember about a retirement application is that it must be complete In an original form signed by the applicant in Inc and dated and all questions must be answered in all applicable boxes checked Checked in all areas requiring initials also need to be initial So reminding employees of all these little things and walking them through the process will help avoid a lot of these common errors Now here's the summary of our roles in assisting employees throughout their pre and post retirement journey active federal employees need to know who they can contact for advice and Retirees should also know that correct points of contact after separation For example before they retired, you know, their keep on key contact should be an agency's benefits representative Or their retirement counselor They can also access OPM website for retirement planning resources such as the FEGLI calculator and the bull ballpark estimator During their retirement process employees should keep in contact with their retirement counselors Make sure that all their information is correct.

All the documentation is submitted updated addresses are give if they Need to make any beneficiary changes they should do. So at this point if they need to update their records on a divorce or a death These are some of the you know, the retirement cancer is the key contact there after retirement then Retirees, you know will have OPM a sore point of contact They'll receive their claim number CSA number, which is essentially almost like an employee ID number after OPN receives their application a Password will be emailed to them to their that mailing address on file now. We encourage all Retirees to read all the OPM mailings Even if it doesn't look like it's a valid or legit OPM correspondence You know OPM's still sense a lot of snail mail.

So it's it would be good for them to make sure that they're reading Anything that they receive from us? They can always call or log into returned retirement services. Our retirement services is essentially a port and all-night portal where employees can Essentially have access anywhere anytime They can make all these changes change their withholdings their mailing address that can change along ments Set up checking or savings allotments change their direct deposit information and also view and print their annuity statements or the verification of income, which I know a lot of agencies Receive requests or at least information on where to get those so services online as a key point I didn't mean to skip page 30 or it's like 35 I wanted to go back to it and just remind everybody of our the OPM retirement operations contact Information their main phone number in the email address now local employees and retirees can stop by our retirement information walk-in office located here in our main building if they wish here a 1900 street room 18:23 that's always an option. Like I said for our local employees and retirees And the business hours for that is 8:00 to 4:00 p.m Eastern Standard Time Monday through Friday or 8:30 to 3 p.m.

On Fridays Here is just some additional talking points to have with your employees as they get ready to retire encourage them to keep their families in the loop about a Lot of their retirement benefits how to contact OPM regarding survivor benefits the forms that they will need to be Completed, you know where to find their retirement claim number that CSA number also Provide information to their families about other benefits. They may be eligible for under military Service or Social Security? Provide their families with life insurance payout information their TSP account information also bank account You know bank account Information and and where their benefits are being are currently being paid Also any unpaid compensation that they're eligible for all these key things will help families Sort of Navigate and and you know these these benefits that retirees are eligible eligible for That could assist them in in that process They also need to remember to keep their designations of beneficiary current if they do not remember who they have designated They can always complete new forms to ensure.

The appropriate person is Designated and will receive those benefits upon their death. All the forms can be downloaded online And again, make sure that you know employees are Reminded that upon retirement to read all all of our OPM correspondence We have now reached the end of our webcast as we wait for questions to come in Which may be emailed to benefits at opm.gov and again add? Retirement counseling tips in the subject line. I Want to take this opportunity to mention that we have had some agency to inquire about Corrections needed for the standard form two eight to one that agency certification of insurance due to the retroactive pay adjustment for those retired after that January 6 the answer is no there is not a need to Correct.

The standard form 28 24 Mewtwo that retroactive pay adjustment However, the individual retirement record must be accurate and correct must be accurate We also want to announce that we have receiving many many inquiries regarding our upcoming benefits conference Yes There will be a benefit conference coming up pretty soon and information will be forthcoming Through our benefits listserv at this time We can only announce that the location is in Florida and it will be held in a week in August or September And will wait for any questions that may come. Thank you for attending our webcast All right the the first question I have worked for several agencies as a Military spouse will this slow down the process of receiving my full retirement benefits And also I understand it can take up to 90 days before you receive full benefits. Is this true? I Can relate to that question as a military spouse I also have worked in many agencies The great thing is like I mentioned the first part of the presentation Is so important when we transfer or as a new hire to identify all of the agencies we've worked for So that the agency can collect the information you should be able to see all of your service in your official personnel folder or opf to verify that all your service is there so so there are many employees veteran throughout their federal career that may move and have several agencies that they work for but as Opf should contain all of that service.

So you should be able to obtain review that and make sure that everything is complete fear So I encourage you to do that. I Agree with joy, and also making sure in recognizing if there's any gaps in Service history and how that will change your service computation dates And I believe there is a second part to the question Yes, I understand. They can take up at least 90 days before you receive full retirement benefits. Is this true? Receiving to that period between you know receiving interim pay and the full monthly annuity Yes, it really just depends on an employee's retirees Application package will whether you know, there's any missing information But there's anything that needs that they did that OPM will need to clarify with the agency But yes for the most part we anticipate About 90 day 90 to 120 days for for that full annuity to kick in All right the second question where can an employee find their retirement SCD our agency does not use a retirement summary benefits report like other agencies do That is definitely a part I would I would talk with your retirement counselor about is you're correct You only see that leave SCB in most cases people are aware of that leave SCD Because our length of a service awards it kids using that leave as CDL So what's printed on the standard form 50? Also is showing that leave service competition date and as I mentioned depending on your service whether there was temporary service or you have unpaid military service that Leave a CD and retirement service computation date definitely can differ So I would reach out to they may be coded but each agency works differently So, this is a question for your Human Resources office.

Just That what your retirement service computation date is they have some internal? Systems that sometimes do show that you can see what your retirement service computation data is So you may want to check there as well, but your agency will be the content for that All right next question Can you elaborate more on the interim payment payment? I'm assuming is less than the full the final retirement paycheck. How much less is it? Normally interim pay could be anywhere between 75 to 85 percent of your full Annuity benefit that you would receive once your retirement package is fully adjudicated here at OPM, so if we encourage Retirees to think about that and and and try to work that into their financial planning once they retire If they have other sources got income if they need to tap into their TSP funds just thinking about You know how that that interim pay that, you know, the the the difference between the interim pay in the annuity the full annuity benefit can impact their their finances within that period All right, next question where can an individual go to learn more about military deposits You can find information on OPM gov and we do have some tabs available on for about service there are several options webcast also on our youtube channel that talk specifically about military deposits there the agency it may also have it on their internal website as far as where how do you request your earnings is that's usually The first step is use utilizing your dd-214 Requesting that those earnings from DFAS and once you obtain those earnings you would submit that to your agency to receive a military military Deposit estimate and payment procedures.

So it's kind of two ways. You can't find general information Like I said on our website, we have a webcast specifically for military deposits explaining Everything and also our CSRs and FERS handbook talks about Military service as well. But so it's a combination of those things from from the resources that I mentioned there and I'm still working with your agency on what the Procedural process is for obtaining that military deposit information and making a decision on that Next question how far in advance should a retirement package be submitted to ensure it is completed in time Well If they're referring to in time before the date of retirement I mean normally agencies will Make sure that a retirement package is completed at the time of retirement then it will Be sent to payroll and then submit it to OPM but always work with your retirement counselor as far as a meeting those specific Return or requirements of when they want you to have a complete Retirement package, it may be that you know They want you to start working on it six months prior to your elective date if that's not reasonable then maybe three months out but always work with the retirement counselor on and having those discussions on Submitting your retirement packages in a timely manner before your retirement is official All right next question If this state withholding forms included with the retirement package will OPM apply the requested state withholding upon adjudication So during interim pay as we mentioned the federal taxes will be taken out once the Annuity is finalized that isn't the opportunity to start your state taxes.

You can also do this on services online We just show a slide where students you receive that information Which will be a booklet included to show that your annuity is finalized and what those final details of your retirement Are you may at that time that could be your trigger to remind you that oh I need to get my state taxes started up again and go all right on services online It's a quick and easy way to make those changes to your state taxes once everything is finalized Under the postpone retirement Is there any special requirement to be completed to suspend their fhb and FEGLI option until they apply for their retirement? No, there's no special requirement besides the the main or you know, the main factors of continuing FHP and FEGLI into retirement.

Just meeting those those recurring the five-year the you know prior five years of enrollment before retirement So just meeting those essential requirements before postponing or before suspending your benefits And postponing your Retirement or your annuity really so now there are no special requirements besides the the main eligibility factors How far back can you buy back Temporary government work time before like a service I was told that there was talk about extending the original cutoff date to a later date range for A first employee at this time The date remains the same being that the the only deposit service eligible to make a deposit rather that non-deduction service Eligible to make a deposit is the service performed prior to January 1st 1989 Okay If the employee has been under TRICARE and not fhb for their entire federal career are they able to enroll in fhb at retirement Yes, the five year Requirement period can include the time the employee is covered under TRICARE as long as they were covered under an FHP Enrollment at the time of retirement for planning purposes.

The employee may want to consider enrolling in Fvh be planned during the open season. Like I said just prior to their retirement date So it's important to know to understand the difference between being enrolled in FHP at the time of retirement and being eligible to carry FHP into retirement while they may have Met the five year Requirement period with TRICARE they still have to be if they want to Keep or enroll in FHP in to retire as a retiree, then they must have been enrolled in FHP Themselves prior to retirement Okay, when is the next training opportunity We have a few more webcasts scheduled this year on June 25th.

We will have a furka Question and answers webcast we will also have a deferred of postpone retirement and face retirement updates webcast on August 6 of this year We have two scheduled furka classes coming up as well. May 7th and July 9th All right the next question can you repeat the fax number for verifying service to OPM Yes, that fax number is seven two four seven nine four six six three three Next could you explain the postponed retirement again, the difference between deferred and postponed? This is explanation actually on our website on under retirement on opm.gov under retirement, it does show you all of the different retirement types Deferred retirement as we know it you can earn an annuity with only five years of service But you may not yet have the age So you defer your retirement to receive the benefits once you've method the age as well as service you can apply to OPM to receive that retirement why postpone retirements for employees that have at least 10 years of service and they're also Postponing not not receiving that benefit right away maybe they're trying to avoid an early age reduction like the minimum retirement age plus 10 so they may postpone their retirement and and meet the requirements because they've had that five years of Their health insurance and that 10 years where they can postpone pickup that benefit at a later date and also at that time Continue health and life insurances.

So it's a difference and the The lift of service required as well as the eligibility to continue benefits between the deferred versus the postponed and the MRA Plus 10 as well Several retirement options Okay, next question how long does it say does it currently take opium to make decisions on disability retirement cases? Well, you know it's always it's very unique Every every disability retirement package is very unique In that you know medical examiners must determine eligibility for each specific case So at this time now there is no specific timeline Some disability retirement applications get adjudicated a little bit faster than others and it all depends on the unique circumstances of the medical condition and of that specific applicant Okay Mmm is the retirement pay and Social Security supplement payment issued in one check or will separate checks be received The first so if you know the first annuity supplement Will be included in your as part of your a monthly annuity payment there will not be a separate check issued Because it's part of your first annuity compensation benefit essentially after retirement And Just a common here.

We got a few questions about the proposed move to GSA Currently there are no anticipated changes and how retirement services does does business And with that it's 2:30. We will respond to the rest of the questions in the inbox that we did not get to.

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