Posted on Tuesday, 26th January 2010 by

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Thanks to the 2010 National Defense Authorization Act a number of retirement benefit changes were implemented that will help many federal employees and retirees.  Everything from some retirees being able to keep both their annuity and federal check if they decide to go back to work for Uncle Sam as a rehired annuitant , more advantageous part time service annuity computations for CSRS service, actuarial reduced CSRS annuities rather than paying back your earlier withdrawals, to FERS sick leave computations, and more.

There is a little in this bill for everyone and it will be awhile before OPM regulations are published for all programs. These changes can potentially make a significant difference in your annuity calculations and others provide equitable resolutions to long standing problems. OPM issued general guidance on January 12, 2010 in their Benefits Administration Letter number 10-101.

Depositing refunds under FERS (Now authorized)

Until recently, when a FERS employee left government service and withdrew their employee contributions they were not allowed to redeposit their withdrawals if they returned to federal service at a later date. FERS employees irrevocably lost all previous service.  Now individuals who are subsequently reemployed can make a redeposit of the amount refunded, plus interest, and receive credit for the reinstated service.  Read more about this issue including eligibility dates on our FERS Annuity page.

Part-time service CSRS annuity computations

The two tier system of calculation high three average salary was eliminated for part time employment periods. Prior to this new revision there were two systems used to calculate the average high three years salary for service performed prior to and after April 7, 1986. In accordance with previous law, one high-three average salary was based on the pay actually received and the other was based on pay the individual would have received assuming they worked full-time (the deemed high-three).

Section 1903 provides that the “deemed high-three” average salary will be utilized for all service, regardless of when performed.  This revision doesn’t change the other provisions applicable to calculation of annuities involving part-time service.  The amendment applies only to annuities based on a separation from service occurring on or after October 28, 2009.

Actuarially reduced annuity under CSRS

CSRS employees who received refunds of retirement deductions for a period of service ending prior to October 1, 1990, may make a redeposit of the refund by actuarial annuity reduction in lieu of cash redeposit.  Actuarial reductions are now permitted in lieu of cash redeposit for refunds covering periods of service ending prior to March 1, 1991. The amendment applies only to non-disability annuities based on a separation from service occurring on or after October 28, 2009. Visit our CSRS Annuity page for more information on your CSRS annuity.

Other changes included FERS sick leave credit towards retirement, part-time reemployment with the government without penalties, and non-foreign area retirement equity provisions.

Jobs Update

We continue to receive job postings from employers seeking to hire part and full time retired federal employees. Check out the new listings on our jobs board for federal human resource specialists, engineers and others.  There are also many part time Census jobs available and with the latest changes that allow agencies to rehire federal employees part-time without affecting their annuity, there are many opportunities available.

We now offer a free job search in your local area for part time jobs, consulting jobs, and temp jobs. When you click on the link it will automatically display jobs in your geographic area.

If you are collecting Social Security and under full retirement age you can still earn up to $14,160 a year without impacting your Social Security benefits.  For every $2 over the limit, $1 is withheld from benefits. At full retirement age there are no earnings restrictions.

Learn more about benefits and financial issues from Linda Duncan, our Benefits forum host and visit our Blog frequently at http://fedretire.net to read all forum articles.

Visit our other informative sites

The information provided may not cover all aspect of unique or special circumstances and federal regulations are subject to change. To ensure the accuracy of this information, contact your benefits coordinator and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our reply is not intended nor should it be considered investment advice. Our reply is time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change.”

Last 5 posts by Dennis Damp

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    Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, EMPLOYMENT OPTIONS, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE | Comments (3)


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    3 Responses to “Retirement Benefits and Retiree Jobs Updates”

    1. dan johnson Says:

      I am considering options after retirement which may include working for myself as a consultant. When I do retire I will be under CSRS system. My question is what happens to my retirement as I work outside the Government? My concern is I will loose some of my retirement income even after I stop working all together.
      Please help me out as I don’t know what I should do.

      Thanks
      Dan Johnson

    2. Dennis Damp Says:

      Hello Dan, working in the private sector after retirement has no effect on your CSRS annuity. You can earn unlimited income and your annuity will not be reduced. If you decide to go back to work for the federal government your new federal salary may be reduced. However many agencies can obtain waivers for the offset for critical positions. You can read more about rehired annuitants online. You mentioned consulting, there are a number of books for starting a small business after retirement including Retire—And Start Your Own Business: Five Steps to Success that you may find helpful. Also visit our retiree jobs center to review consulting job listings.

      I hope this was helpful.

    3. Dennis Damp Says:

      Hi Joanne

      It sounds like you may have received for a VERA (early retirement) and a VSIP (incentive payment to retire). If you are re-employed as a federal employee within 5 years of receiving the separation incentive, it needs to be repaid before the agency can hire you into the position. For more information see: http://main.opm.gov/employ/html/vsi.htm

      There is an earning test to receive the FERS supplement. Any earnings (federal or non-federal) above $14,160 will decrease your FERS supplement. The supplement is reduced by $1.00 for every $2.00 you earn over the $14,160 (amount for 2010). http://main.opm.gov/forms/pdfimage/RI90-8.pdf

      The employment might not affect the actual FERS annuity or pay for the position, if the agency is using this authority to hire part-time employees: http://main.opm.gov/retire/pubs/bals/2010/10-101.pdf. It will depend on how the agency is hiring these positions. If you are still interested, you will need to call to discuss this with the Staffing Specialist for the position.

      v/r – Linda Duncan, Benefits & Finance Forum Host