Posted on Wednesday, 29th January 2025 by Dennis Damp

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According to OPM’s memo dated 1/28/2024, the President requires that employees return to in-person work. The Presidential directives issued this past week are intended to restore accountability for employees with policy-making authority, restore accountability for senior career executives, and reform the federal hiring process to focus on merit.

Deferred resignation availability is limited to all full-time federal employees except for military personnel of the armed forces, employees of the U.S. Postal Service, those in positions related to immigration enforcement and national security, and those in other positions excluded explicitly by your employing agency.

Agency heads will be the final arbiters for those eligible, determining which positions within their organizations are critical.

Should I Accept a Deferred Resignation?

There is much to consider, and with the limited time available, you must gather all the facts and fully understand the ramifications of your decision. OPM published the email notice on their site with an informative FAQ to review before replying.

I highly suggest reviewing the FAQ and then evaluating your financial situation and related benefits, such as whether you can take a deferred or immediate annuity. Sign up for the January 30th free Deferred Resignations seminar, starting at 7:00 pm (EST).  Subsequent seminars on this subject will be announced on this site.

In the late 1990s, my agency received the Voluntary Early Retirement Authority (VERA) with a Voluntary Special Incentive Payment (VSIP) for specific occupations. I considered taking it, but after determining my dramatically reduced annuity, I decided it wasn’t a good fit, and in the end, my position was not included.

Individuals who resign through this program are generally not required to work during the deferred resignation period except in rare cases as determined by your agency.

Mass Confusion

Personally, agencies should have sent emails only to those they deemed eligible. OPM will be flooded with emails, and their staff is having difficulties providing services to retirees. Whenever I call OPM, I get a recording saying, “Call back later.”

Currently, it takes several weeks for them to reply to an email. I can only imagine the panic at OPM as they scramble to handle this influx and process the associated paperwork for those who accept the deferred resignation offer. They are currently having difficulties processing several thousand retirement applications each month.

This may not be an issue initially because the Executive Order will likely be challenged in the courts, and the time frame for implementation and offer could change dramatically.

Many positions would not be eligible for this program, including critical care medical specialists, air traffic controllers, technical and system specialists, certain automation specialists, law enforcement personnel, and critical IT positions.

Deferred Resignation Process

The program begins January 28 and is available to eligible federal employees until February 6. According to the memo, “If you resign under this program, you will retain all pay and benefits regardless of your daily workload and will be exempted from all applicable in-person work requirements until September 30, 2025 (or earlier if you choose to accelerate your resignation for any reason).”

If you wish to resign after reviewing the contents of the memo and FAQ, select “Reply” to this email. You must reply using your .gov or .mil government account. Replying from a private email address will not be accepted. Type “Resign” into the body of this reply email and Hit “Send.”

If you didn’t respond to the email and wish to accept the deferred resignation offer, you may do so by following these steps.

• Send an email to hr@opm.gov from your government account. Only an email from your .gov or .mil account will be accepted.
• Type the word “Resign” into the “Subject” line of the email. Hit “Send”.

You will receive an email confirming receipt with additional information on next steps. Given the volume of emails, this confirmation email may take up to 72 hours.  You should retain the record of your resignation email.

Preparing for the Inevitable

I anticipated this mass exodus shortly after President Trump was elected. My early January article, “A Potential Federal Retirement Tsunami – The DOGE Impact,” outlines the downsizing options and retirement benefits available to all employees.

The article describes FERS, CSRS, and early retirement options and how the government implements VERA and VSIP authorizations within their agencies to reduce the impact on federal employees.

VERA and VSIP authority are often used to avoid Reduction in Force (RIF) action. The Deferred Resignation package would be far more generous since applicants would receive up to seven months of pay plus benefits through September 2025!

Sign up for a complimentary retirement planning session
and a FREE retirement planning report

Resources to Get You Started

There are many options to explore, and anyone that the DOGE may impact needs to thoroughly assess their situation, including a cost analysis for pre and post-retirement to see what you and yours will have to live on.

The following informative articles, guides, spreadsheets, and schedules will help you assess your personal situation:

• The Ultimate Retirement Planning Guide – Start Now!
• Deciding When to Retire – A 7-Step Guide
• The Best Date to Retire – Selecting your retirement date
• Retirement Cost Analysis
• Early Retirement – VERA and VSIP
• How to Avoid Retirement Processing Delays (UPDATE)
• The Obligations and Realities of Returning to In-person Work

Summary

Employees must evaluate their situation closely using the resources listed above and our Federal Employees Retirement Planning guide.

Leaving federal service may seem appealing at first. The only way to ensure it’s right for you and yours is to perform a thorough Retirement Cost Analysis and proceed with caution. One of the advantages of deferred resignation is that you will have eight months to explore other employment options and put away funds to keep you solvent once you leave. Plus, your benefits will continue to accrue until you leave federal service.

Another major advantage is that if you have 5 years of creditable service, you can take a deferred retirement at age 62. With 20 years of service, you can retire at age 60, and FERS employees can retire at their Minimum Retirement Age with as little as 10 years of creditable service.

You don’t have much time to make your choice, so use that time wisely and thoroughly evaluate your options.

If you change your mind after sending your resignation email, employees have the right to request rescission of their resignation at any time, and the employing agency will need to review such rescinding requests.

The program’s objective is to consolidate and/or reassign roles quickly and, in many cases, place employees on administrative leave, which would likely serve as a valid reason to deny recission requests.

Federal employees who are retiring soon and recent retirees with security clearances
can search thousands of high-paying defense and government contractor jobs.

Helpful Retirement Planning Tools

• Federal Employee’s Retirement Planning Guide
• Complimentary Retirement Planning Session
• TSP Guide
• Budget Work Sheet
• 2025 Federal Employees Leave Record
• Medicare Guide
• Social Security Guide

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center.

Over time, various dynamic economic factors relied upon as a basis for this article may change. The information contained herein should not be considered investment advice and may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Tags: Deferred Resignations, Deferred Retirement, DOGE, Early Retirement, Federal Employee Deferred Resignations, FERS Retirement, VERA, VSIP
Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, EMPLOYMENT OPTIONS, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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Posted on Friday, 24th January 2025 by Dennis Damp

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For those planning their retirement, it’s a good time to assess where you are financially long before filing your retirement paperwork. Federal employees received an overall 2 percent pay raise, factoring in locality pay. The 2025 pay charts are available for your review.

Sign up for a complimentary retirement planning session
and a FREE retirement planning report

COLA

More than 71 million Americans will see a 2.5% increase in their Social Security benefits and Supplemental Security Income (SSI) payments in 2025. Starting in January, Social Security retirement benefits will increase on average by $45 per month.

Federal retiree’s annuities under the Civil Service Retirement System (CSRS) receive the full 2.5% COLA increase, while those under the Federal Employees Retirement System (FERS) receive 2%.

Thrift Savings Plan Considerations

Contributions

The Thrift Savings Plan (TSP) elective deferred contribution limit increased to $23,500 for FERS employees with an additional $7,500 catch-up contribution for those age 50. The annual additions limit is $70,000.

These contribution limits can be made to defined contribution accounts like the Thrift Savings Plan (TSP) for the calendar year. Please note that this personal limit applies to an individual’s aggregated contributions across all such accounts in a calendar year.

If you aren’t contributing to these limits, consider increasing your TSP contributions this year by at least one percent of your pay. Your take-home pay will still increase yearly with this modest contribution increase.

Your contributions are tax-deferred until you withdraw them in retirement, and they will reduce your annual income tax while you are still working.

TSP 1099-R

Our TSP 1099-R tax forms are issued for all plan withdrawals and typically arrive by late January. If you don’t receive your 1099-R Form in the mail by mid-February, call the TSP to request a replacement.

They are currently available in your “Secure Mailbox.” I downloaded mine mid January. To get to your secure mailbox, click on the circled bell in the upper right corner of the website

Annuity & Social Security 1099-Rs

Federal annuitants typically receive their updated Annuity Statement in late December, with the COLA increase added. OPM’s 1099 R Tax Forms aren’t available by regular mail until the end of January, while Social Security’s SSA 1099 forms arrive early to mid-January.

Registered users of OPM’s Retirement Services Website can download their January Annual Annuity Statement in mid-December, and the 1099R forms are available now.

Social Security Tax Limit and Medicare Premiums

Higher earners will pay Social Security taxes in 2025 on earnings up to $176,100, an increase from last year’s maximum amount of $168,600.

The standard monthly premium for Medicare Part B enrollees will be $185.00 for 2025, an increase of $10.30 from $174.70 in 2024. The annual deductible for all Medicare Part B beneficiaries will be $257 in 2025, an increase of $17 from the annual deductible of $240 in 2024.

BLUE Book (Benefits Summary Booklet)

Request an updated retirement benefits booklet through OPM’s Services Online from late January to early February. This will ensure they include your 2025 FEHB and FEDVIP premiums. All retirees receive a comprehensive multi-page booklet titled “Your Federal Retirement Benefits” from OPM when they retire. My booklet is 28 pages long.

Many annuitants order a copy yearly with updated benefits information and place the booklet in their retirement or estate planning file. You can also request a copy of the original booklet you received when you first retired if you lost your copy and compare it to the most current version.

Summary

I typically download my 1099-R tax forms as soon as they are available and enter them into Turbo Tax which I buy at Sam Club or Costco in late December. If you haven’t signed up for OPM’s Online Services, follow the sign-on guidance in my article titled “OPM Services Online Access Changes.”

The Blue Book is a wealth of information and includes your personal retirement information: CSA number, annuity breakdown, survivor elections, benefit elections, etc. This website’s document section provides quick access to your 1099-R forms for the past 5 years and downloadable annual and monthly annuity statements.

If you can’t access their services online, call OPM at 1-888-767-6738. You can also email them at retire@opm.gov or send a written request to the U.S. Office of Personnel Management, 1900 E Street, NW, Washington, DC 20415-1000.

Federal employees who are retiring soon and recent retirees with security clearances
can search thousands of high-paying defense and government contractor jobs.

Helpful Retirement Planning Tools

• Federal Employee’s Retirement Planning Guide
• Complimentary Retirement Planning Session
• TSP Guide
• Budget Work Sheet
• 2025 Federal Employees Leave Record
• Medicare Guide
• Social Security Guide

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center.

Over time, various dynamic economic factors relied upon as a basis for this article may change. The information contained herein should not be considered investment advice and may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Tags: 1099 R Forms, Annuity Statements, Benefits Blue Book, COLA, Medicare Premiums, Social Security
Posted in BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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Posted on Friday, 10th January 2025 by Dennis Damp

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Christmas came early for those subject to the WEP and GPO provisions but not for those who opted out of GEHA’s MPDP plan. Many, including my wife and me, opted out of Silver Script’s Part D (EGWP) Medicare Part D Prescription Drug plan offered by GEHA in late November, and we received a confirmation letter from them dated 11/28/2024.

EGWPs, or Employer Group Waiver Plans, are Medicare Advantage plans offered by employers or unions to retirees. Private insurance companies manage these plans and are often exempt from specific rules that apply to individual Medicare Advantage. This applies to the MPDP option.

We stayed with GEHA’s standard plan, and after opting out of their MPDP plan, we assumed all was well and that our prescription drug coverage would continue to be covered by GEHA, not Medicare Part D.

Who’s on First and What’s on Second

This subtitle is from Abbott and Lou Costello’s hilarious comedy routine. The head doesn’t know what the foot is doing, and one group passes the blame to the other. We discovered mid-December that we were enrolled in Part D, and the opt-out process failed! The situation has been back-and-forth for over a month without resolution.

We received three sets of GEHA medical and dental cards and a set of Silver Script Medicare Rx cards at various times over the past six weeks. The most recent GEHA set arrived yesterday.

One contradicted the other, and Silver Script, when first contacted, said that GEHA inadvertently enrolled all members in the Silver Script plan. I don’t know if this is true; I only know that members have suffered the consequences of their incompetence, whoever it may be.

I’ve talked with Social Security, Medicare, Silver Script, and GEHA and tried to contact OPM unsuccessfully. Each time I’ve called OPM over the past few weeks, their recording states, “We are experiencing very high call volume. Please call back later.”

Battling With the Giants

I visited the Medicare site after Silver Script advised us the second time that we were not enrolled in their program. Our Medicare site page showed that we were enrolled in Parts A, B, and D with GEHA, and the UMR insurance company identified as secondary providers. No one, including Medicare or GEHA, could tell me why UMR was listed as a secondary provider or what services they covered; we never signed up with UMR.

This was especially upsetting, considering GEHA implemented the MDPD option without asking members if they wanted to enroll in a Medicare Part D prescription drug program at an additional cost for many. Instead, they asked members to opt out, and the opt out process isn’t functioning properly.

After contacting GEHA several times about these issues, I couldn’t get anyone to understand the gravity of the situation or take actions to correct it.

Silver Script, after contacting them for the third time, assigned another task number to research the issue again. A week later, Medicare Part D was removed from our online Medicare accounts. However, when we went to our online Medicare payment details, they showed us paying a Part D IRMAA through December 2025.

Medicare customer service suggested we contact Social Security immediately because IRMAAs were scheduled to be deducted from our checks for the entire year.

The Last Straw

My wife and I received Retirement and Disability Insurance letters from Social Security on January 6^th advising us that they were deducting past-due Part D prescription drug coverage income-related monthly adjustment amounts from our Social Security checks and a penalty for past-due Part D premiums! Our Social Security checks are being reduced by a Part D IRMAA plus additional penalties for late Part D payments!

I immediately called Social Security as Medicare suggested and was on hold for over an hour until the line died. The next morning, I called again and waited on hold for over two hours.

After discussing the issue with the specialist, she stated she could do nothing. Our only option was to file an appeal for each of us, including documentation to support that we had not enrolled in a Part D Plan and why we should not have to pay a late penalty.

I spent several hours writing the appeal and had to convert the opt-out letters we received confirming that we opted out of the Silver Script EGWP plan to a PDF file. Later that afternoon, I submitted the appeal online with attachments. You can also submit it via regular mail with copies of your documentation.

Conclusion

Several newsletter subscribers have experienced similar problems and are still unsure if it is resolved. According to one of Social Security’s support specialists, a typical appeal can take several months to over a year to work its way through their system.

My wife and I will pay monthly Part D premiums and an additional penalty for some time even though we aren’t enrolled in Part D. They assured me these payments would be refunded if the appeal was settled in our favor.

Silver Script confirmed again that we were not in their system and to use the GEHA cards we received. The card with CVS Caremark listed at the lower right corner of the card, and UnitedHealthcare Choice Plus Network is directly below the CVS designation.

I called GEHA’s CVS Caremark prescription drug services today and talked with Rhonda. I said, “Help me, Ronda.” Her name reminded me of that song from the 1960s,” and she did. She was helpful, pleasant, and confirmed that I was in their system.

I’ve always commended GEHA for its excellent service, customer support, and reasonable rates. Since signing up for Medicare ten years ago, my wife and I haven’t paid any out-of-pocket costs except for prescription drugs.

GEHA’s and Silver Script’s lack of attention to detail was disappointing when they rolled out this new MPDP program. The administrator for this rollout didn’t realize the disruption it could cause if mishandled or that members who opted out are now paying IRMAAs. Their Social Security checks are less than last year! This could go on for many months.

I intend to stay with GEHA and hope this is simply a one-off, not indicative of the company’s current state of affairs. They have served my wife and me well over the years.

UPDATE

Read the update to this article, the issue that I experienced was corrected in early February.

Helpful Retirement Planning Tools

Federal employees who are retiring soon and recent retirees with security clearances
can search thousands of high-paying defense and government contractor jobs.

• Financial Planning Guide for Federal Employees and Annuitants
• Complimentary Retirement Planning Session
• How to Avoid Retirement Processing Delays (UPDATE)
• Hiring a Financial Planner
• TSP Guide
• Budget Work Sheet
• 2024 Pay Tables
• 2025 Federal Employees Leave Record
• Retirement Planning for Federal Employees & Annuitants
• The Ultimate Retirement Planning Guide – Start Now
• Deciding When To Retire – A 7-Step Guide
• Medicare Guide
• Social Security Guide

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center.

Over time, various dynamic economic factors relied upon as a basis for this article may change. The information contained herein should not be considered investment advice and may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Tags: EGWP, GEHA, Medicare, MPDP, Part D IRMAAs, Social Security
Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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Posted on Friday, 3rd January 2025 by Dennis Damp

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Elon Musk and Vivek Ramaswamy met with the House of Representatives in Washington, D.C., to discuss their plan to slash government regulations and streamline the Federal executive branch. They will lead Donald Trump’s administration’s Department of Government Efficiency (DOGE).

They won’t hold cabinet positions and will function outside government to advise the new administration on improving efficiency. Their focus will be to purge obsolete organizational elements, eliminate wasteful spending, relocate a portion of the centralized staff in major metropolitan areas back to field positions, and cut federal agency staffing where appropriate. Federal government employment has grown approximately 17% over the past two decades.

Inefficiencies Abound Across the Board

The USPS reported a $9.5 billion net loss for fiscal 2024 after a $6.5 billion loss in FY 2023; they project a $6.9 billion loss in 2025!

The Pentagon recently failed its seventh consecutive audit; it couldn’t fully account for its massive $824 billion budget. The Government Accounting Office (GAO) has flagged this issue for the department since the early 1980s.

The U.S. Accountability Office (GAO) reports, “Waste is when individuals or organizations spend government resources carelessly, extravagantly, or without purpose. Federal programs may be vulnerable to waste for several reasons.”

They list the major areas where waste occurs: asset mismanagement, inadequate oversight, and lack of adherence to established practices and policies.

Personally, I can think of many instances of inefficiency and government waste from my time with the government.

________________________________________________________

___________________________________________________

Heading for the Exits

Employees should review their retirement eligibility and available early retirement options as the DOGE begins their work.

Over the next few years, approximately a third of the federal workforce will be eligible for regular or early retirement, especially when agencies offer Voluntary Early Retirement Authority (VERA) and the Voluntary Separation Incentive Program (VSIP) options. This could moderate the impact of a pending Reduction in Force (RIF).

The early retirement benefit is available in certain involuntary separation cases and cases of voluntary separations during a major reorganization or reduction in force. To be eligible, you must be age 50 with at least 20 years or at any age with 25 years of service.

Agencies may pay up to $25,000 VSIP or an amount equal to the severance pay an employee would be entitled to receive, whichever is less. This amount can be raised under certain circumstances.

Federal Employees Retirement System (FERS)  

The Federal Employees Retirement System offers retirement with as little as 10 years of service at the minimum retirement age of 57 for those born in 1970 or after. The minimum retirement age decreases for those born before 1970.

A  special supplement similar to Social Security is available for FERS annuitants who retire before age 62 and are paid as an annuity until age 62.

If you retire at the MRA with at least 10 but less than 30 years of service, your benefit will be reduced by 5 percent a year for each year you are under 62 unless you have 20 years of service, and your benefit starts when you reach age 60 or later. You can defer collecting your annuity to avoid this penalty.

Employees who leave federal service before they meet the age and service requirements for an immediate retirement benefit may be eligible for deferred retirement benefits. You must have completed at least 5 years of creditable civilian service to be eligible. Review the FERS eligibility charts for more information on this subject.

Civil Service Retirement System (CSRS)

The Civil Service Retirement System offers retirement at age 55 with 30 years of service, 60 with 20 years of service, and 62 with 5 years of service.

Many CSRS employees aren’t eligible for Social Security because they didn’t work 40 quarters, ten years, paying into the Social Security system. CSRS employees paid a similar monthly amount into their CSRS retirement system.

If you leave Federal service before you meet the age and service requirements for an immediate CSRS retirement benefit, you may be eligible for deferred retirement benefits. You must have at least 5 years of creditable civilian service to receive a deferred annuity.

OPM advises that you wait until 60 days before your 62nd birthday to apply for deferred retirement benefits and then contact OPM for an “Application for Deferred Retirement.”

Early Retirement Systems

A 20-year retirement system was created for certain designated positions requiring employees to meet vigorous physical demands. This retirement system allows employees to retire sooner, with just 20 years of service. It also includes a mandatory retirement when the employee reaches a designated age or years of service.

The 20-year retirement system covers Law Enforcement Officers (LEO), Firefighters (FF), Air Traffic Controllers (ATC), and Nuclear Weapons Couriers (NWC).

I believe few in this group will be impacted; however, you never know what direction the reorganization will take. Review your early retirement options to be prepared. There are rumors that certain positions or groups may be contracted out.

Federal employees and recent retirees with security clearances can
search thousands of high-paying defense and government contractor jobs.

Resources to Get You Started

There are many options to explore, and anyone that the DOGE may impact needs to thoroughly assess their situation, including a cost analysis for pre and post-retirement to see what you and yours will have to live on.

The following guides, spreadsheets, and schedules will help you assess your personal situation:

• The Ultimate Retirement Planning Guide – Start Now!
• Deciding When to Retire – A 7-Step Guide
• The Best Date to Retire – Selecting your retirement date
• Retirement Cost Analysis
• Early Retirement – VERA and VSIP
• How to Avoid Retirement Processing Delays (UPDATE)

Summary

DOGE will evaluate the Executive Branch. The legislative and Judicial branches also require reforms.

Budgeted earmarks by both parties for favored groups and absurd boondoggle projects push us further into debt and have little to do with the associated legislation. To be fiscally responsible, Congress must pass laws to balance the budget and pay for new legislation and any associated spending by cutting programs and costs elsewhere.

The national debt crisis is primarily associated with Congress’s wasteful spending and lack of oversight. Without laws requiring Congress to pay for new programs with cuts elsewhere, efficiency enhancements will be overshadowed for years.

We also need a constitutional amendment establishing term limits, such as 4 terms (8 years) for Congressmen and 2 terms (12 years) for Senators. A good number of representatives would not be eligible for reelection every election cycle. This would permit them to focus on the issues and vote their conscience rather than the party line and what they must do for reelection.

The employees will suffer the consequences of the upcoming reorganizations, but they aren’t the cause; Congress and our leadership, and the lack thereof, have mushroomed our national debt and are bankrupting America.

Helpful Retirement Planning Tools

• Federal Employee’s Retirement Planning Guide
• Complimentary Retirement Planning Session
• TSP Guide
• Budget Work Sheet
• 2025 Federal Employees Leave Record
• Medicare Guide
• Social Security Guide

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center.

Over time, various dynamic economic factors relied upon as a basis for this article may change. The information contained herein should not be considered investment advice and may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Tags: CSRS, Deferred Retirment, DOGE Federal Reorganization, DOGE Impact on Federal Jobs, Early Federal Retirement, Early Federal Retirement Options, Federal Employee's Retirement System, Federal Retirement Tsunami - 2025, FERS
Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, EMPLOYMENT OPTIONS, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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Posted on Saturday, 21st December 2024 by Dennis Damp

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The U.S. Senate passed H.R. 82, the Social Security Fairness Act, repealing the windfall elimination provision (WEP) and the government pension offset (GPO), voting 76-20 on the final passage. The House passed the bill by 327-75 on November 12. The bill is now on the President’s desk, awaiting his signature.

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_______________________________________

Major Initiative by NARFE

We should all thank the National Active and Retired Federal Employees Association (NARFE), The National Education Association (NEA), and other organizations for their aggressive advocacy for repealing WEP and GPO for many years. NARFE has worked tirelessly to achieve this goal.

This bill provides substantial financial relief not only to federal CSRS employees and retirees but also to teachers in 15 states, police, firefighters, postal workers, and some state, county, local, and special district workers who have historically been penalized by GPO/WEP.

WEP No More

You are eligible for Social Security benefits if you accrued 40 quarters (10 years) of employment where Social Security payments were withheld. The Windfall Elimination Provision (WEP) significantly reduced most Civil Service Retirement System (CSRS) employee’s and annuitant’s Social Security payout.

According to the Social Security Administration data, the WEP penalized nearly 2 million Social Security beneficiaries. These affected workers were about 3% of all Social Security beneficiaries.

GPO Gone

The Government Pension Offset (GPO) affected workers entitled to a pension based on work in a Federal, State, or local government that was not covered by Social Security, such as CSRS. It also affected employees who transferred to FERS but did not work for 5 years under FERS.

The GPO reduces the benefits of over 724,000 Social Security beneficiaries, about 1% of all beneficiaries. Of those penalized by the GPO, 71% lost their entire Social Security benefit. 83% of those affected by the GPO are women.

The GPO did not affect employees who were required by law to have Social Security coverage — such as employees who FERS automatically covered without electing it and people with CSRS Offset coverage.

The End Game

After the President signs the bill, Social Security and OPM will need time to implement these changes. Be patient but vigilant; some may be overlooked or bypassed.

Helpful Retirement Planning Tools

• Financial Planning Guide for Federal Employees and Annuitants
• The Ultimate Retirement Planning Guide – Start Now
• Deciding When To Retire – A 7-Step Guide
• Complimentary Retirement Planning Session
• How to Avoid Retirement Processing Delays (UPDATE)
• TSP Guide
• Budget Work Sheet
• 2025 Federal Employees Leave Record
• Medicare Guide
• Social Security Guide

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center.

Over time, various dynamic economic factors relied upon as a basis for this article may change. The information contained herein should not be considered investment advice and may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Tags: CSRS, GPO Repeal, WEP & GPO, WEP Repeal
Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE

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Posted on Friday, 13th December 2024 by Dennis Damp

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I close out each year with a few last-minute updates and observations. My next article won’t be published until early January. It’s time to celebrate the holidays and just sit back and relax.

At the age of 75, soon to be 76, I realize just how fortunate we are, and much of that is thanks to my federal service, from active duty through retirement. I received my draft notice in 1968, 5 months after graduating high school; life has flown by at warp speed these last 55 years.

My 2024 New Year’s resolution was to slow down and take life easy for a change. I’m not sure I achieved that goal; just too much to do and too little time to do it. Yet, I have hopes for this coming year, and changes are on the horizon.

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Open Season Follow-up

Yes, open season is over but not out for the upcoming year. Those who signed up for Medicare FEHB/PSHB sponsored Medicare Advantage (MA) or Medicare Prescription Drug Plans (MPDPs) can revert to their FEHB/PSHB plans anytime. You don’t have to experience a Life Event or wait for the next Open Season.

Many find the MA and MPDP options worthwhile and desirable, while others have problems with approvals and available providers in their areas. It’s all about what works for you and the state of your health.

The Sunsetting of the Civil Service Retirement System (CSRS) – The End Game

I entered the federal civil service in 1973 after being discharged from active duty. At that time, all federal employees were under the CSRS system; now, less than 32,000 remain! Anyone hired into federal civil service starting January 1, 1987, was automatically enrolled in the Federal Employees Retirement System (FERS).

Many FERS employees lament this change and don’t realize their system can be more beneficial overall. Concurrent with this change, the Thrift Savings Plan was established, and the government provided a 5% contribution match for FERS employees.

CSRS employees didn’t receive the match and are limited to contributing 5% of their basic pay annually, whereas FERS employees can contribute up to the statutory limit each year. This is why many tenured FERS employees retire as millionaires or close to it.

The amount that FERS employees can contribute changes annually. You may elect to contribute any dollar amount or percentage of basic pay if it doesn’t exceed the IRS limit of $23,500 for 2025.

The TSP is governed by Internal Revenue Code (IRC) § 401(a), which is similar to a 401(k) with some restrictions.

CSRS Verses FERS Annuity Determination

Under the CSRS system, the annuity is calculated at 1.5 percent of your “high-3” average pay times years of service up to 5 years, 1.75% of your “high-3” pay times years of service over 5 and up to 10, and 2 percent of your “high-3” pay times years of service over 10. Many assumed the CSRS annuity was a flat 2 percent of your high-three average pay; it isn’t.

The regular FERS retirement annuity is calculated at 1% of your high-3 average pay times years of creditable service. If you retire at age 62 or later with at least 20 years of service, a factor of 1.1% is applied.

If FER employees meet certain requirements and retire before age 62, they receive a Special Retirement Supplement; this is in addition to their regular annuity and is paid until they reach age 62. This supplement is similar to their Social Security benefit. CSRS annuitants aren’t eligible for this supplement. The supplement ends at 62, even if you wait to apply for Social Security benefits.

Trade-Offs

Under CSRS, employees didn’t pay into Social Security. They contributed close to the same amount towards their CSRS retirement. Therefore, many long-term CSRS annuitants aren’t eligible for Social Security, or their monthly check is small compared to the average Social Security check others receive.

To be eligible to collect Social Security, you have to work at least 10 years, 40 quarters, paying into the Social Security system. To avoid the Windfall Elimination Provision (WEP), you had to work 30 substantial earning years under Social Security to collect a full Social Security benefit.

CSRS employees with 30-plus years typically worked only a few years part-time in school and possibly some military service. Those individuals must either work part-time while employed with the government, start a small business like I did 40 years ago, or work in the private sector after retirement to accumulate 40 quarters to collect a Social Security check.

FERS annuitants receive a lower COLA if the CPI increase is more than 2 percent but no more than 3 percent; their Cost-of-Living Adjustment is limited to 2 percent. If the CPI increase is more than 3 percent, the adjustment is 1 percent less than the CPI increase.  This is often referred to as the diet COLA.

 

Federal employees and recent retirees with security clearances can
search thousands of high-paying defense and government contractor jobs.

Six One Way, Half A Dozen the Other

Both systems are generous, with the differences highlighted above. Federal employees are fortunate to have a cost-of-living adjusted annuity to rely on with our other savings and investments. I retired 20 years ago this month, and thanks to our COLAs, my annuity is now close to what I was earning annually in 2004. FERS annuitants would have to work considerably longer to achieve the same results.

Our annuities provide a cushion that few in the private sector have. Even though CSRS offers a more generous annuity, FERS employees collect full Social Security benefits that often make up the difference. They potentially have significant TSP savings to fall back on when needed, and their TSP contributions over the years were tax-deferred.

Any way you slice it, both systems have served us all well.

Wrap Up

Another year has passed, and I had hoped to slow down. Instead, I wrote more articles than any year prior and am looking forward to this winter’s break. I’m another year older and feel my age, not my shoe size!

This year’s Open Season attributed to most of my articles these past two months due to the many changes and general confusion around our health care options. From MPDPs to MA plans and everything in between, it’s still confusing, and many just want to throw their hands up and surrender or stay the course. I hope my articles shed light on this subject; my intent was to clarify the issues for everyone.

I revised and sent out our updated 2025 Federal Employees Leave and Schedule spreadsheet for those still working and planning their exit. Please forward this spreadsheet to others in your organization. It tracks all leave balances, and you can use it to annotate your work schedule. This spreadsheet allows current employees to set realistic target retirement dates and will help them increase their annuity through prudent leave management.

I wish all my newsletter subscribers and site visitors a joyous holiday and a happy, healthy, and prosperous NEW YEAR!  My best to you and yours always.

Helpful Retirement Planning Tools

• Financial Planning Guide for Federal Employees and Annuitants
• Complimentary Retirement Planning Session
• How to Avoid Retirement Processing Delays (UPDATE)
• Hiring a Financial Planner
• TSP Guide
• Budget Work Sheet
• 2024 Pay Tables
• 2025 Federal Employees Leave Record
• Retirement Planning for Federal Employees & Annuitants
• The Ultimate Retirement Planning Guide – Start Now
• Deciding When To Retire – A 7-Step Guide
• Medicare Guide
• Social Security Guide

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center.

Over time, various dynamic economic factors relied upon as a basis for this article may change. The information contained herein should not be considered investment advice and may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Tags: CSRS, CSRS Offset, FERS, Open Season Follow-up, The FERS Advantage
Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, EMPLOYMENT OPTIONS, ESTATE PLANNING, FINANCE / TIP, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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Posted on Friday, 29th November 2024 by Dennis Damp

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More FEHB and PSHB plans are offering Medicare Prescription Drug Plans (MPDPs) this open season. I reviewed several plan brochures, and you must opt-out if you have Original Medicare and want to remain in your provider’s prescription drug plan. Blue Cross and Blue Shield started offering MPDPs last year.

Once enrolled in an MPDP, you must pay a Part D Income Required Monthly Adjustment Amount (IRMAA) if your income is above a specific limit.

The following is excerpted from the GEHA brochure. They are one of the providers incorporating this next year for those enrolled in Medicare Part A and B. It’s not an option; you will automatically be enrolled in their MPDP unless you request to opt-out.

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GEHA MPDP

According to GEHA, “The Plan will add coverage for a Medicare Prescription Drug plan (PDP) – Employer Group Waiver Plan (EGWP), sponsored by SilverScript, to eligible annuitants and family members enrolled in the High or Standard Option. This Medicare Part D plan is equivalent to, or better than, the GEHA FEHB prescription drug benefits.” They go on to say:

“Eligible members will be automatically enrolled in the GEHA SilverScript PDP effective January 1, 2025. Enrollees will have the ability to opt-out of this coverage by following instructions mailed to them. Declining coverage or “opting out” will allow the enrollee to revert back to their standard FEHB prescription drug benefits. For more specifics regarding this coverage, see Section 9, Medicare Prescription Drug Plan Employer Group Waiver Plan (PDP EGWP).”

Note: GEHA customer service advised me that opt-out instructions must be requested. I asked them to send me a copy on November 19^th. To avoid automatic enrollment, you will have 21 days from receiving the letter to contact SilverScript at the toll-free number (833-250-3241) to decline Part D coverage.

What to Expect

If you pay a Part B IRMAA and don’t wish to pay an additional Part D IRMAA, request the opt-out letter from your provider. My wife’s and my prescriptions are reasonable under GEHA’s standard prescription drug plan; we intend to stay with GEHA’s standard plan in 2025 and will opt-out of their MPDP.

There are benefits to MPDP offerings, especially for those not subject to an IRMAA. They include:

• No deductible
• Catastrophic Protection Out-of-Pocket Maximum of $2,000 per person annually
• The plan’s integrated medical and prescription drug overall out-of-pocket maximums apply. Check Section 9 of your provider’s brochure for limits.

Medicare Advantage (MA) Plans

While researching MA plans this year, I discovered several issues with the plans I reviewed. I was comparing GEHA’s standard plan to their new MA plan offering.

One of the benefits of the FEHB plans for those with Original Medicare A & B is that you aren’t limited to the plan’s provider list. You can use any provider or medical facility that accepts Medicare; your plan will cover the deductibles, copayments, and coinsurance.

With Medicare Advantage Part C plans, you must use their provider networks. Most of our doctors weren’t on the list. When I called United Healthcare, the company that manages GEHA’s MA plan, they said to provide a list of the doctors not on the list, and they would confirm if they were part of a Plan Provider Organization (PPO) that would accept payment.

Higher-income retirees will also be subject to Part B and D IRMAAs if they enroll in an MA plan. This is often a tie-breaker for many considering this option.

Another concern is what I mentioned in our Medicare Advantage Plan Primer. “Increasingly frustrated health systems are opting out of contracts with different Medicare Advantage insurers. Among the most commonly cited reasons are excessive prior authorization denial rates and slow payments from insurers.”

Who Pays What & When

MA plan network providers bill United Healthcare. However, if a PPO doesn’t accept payment, United Healthcare can contact your doctor to explain how the plan works.

If a doctor or hospital refuses to bill UnitedHealthcare directly, they may ask that you pay the full allowable amount. In that case, you can pay the doctor and then submit your claim to UnitedHealthcare. You will be reimbursed for the cost of the claim less your copay.

The following disclaimer is posted on their website: “Out-of-network/non-contracted providers are under no obligation to treat UnitedHealthcare members, except in emergency situations. Please call our customer service number or see your Evidence of Coverage for more information, including the cost-sharing that applies to out-of-network services.”

 

GEHA Plan Comparisons

GEHA publishes a plan comparison chart outlining the benefits of the GEHA Standard and GEHA Standard Medicare Advantage plans. It also provides a side-by-side chart of how their new GEHA Standard EGWP Prescription Drug plan compares to the other two options. A similar comparison chart is available for their High Option.

There isn’t an additional cost to join an MA plan; however, higher-income enrollees may pay a Part D IRMMA that they wouldn’t be responsible for if they remain in the FEHB’s prescription drug plan.

Visit the GEHA site for additional details and explore their plans and the MA option.

Summary

Many plans include an MPDP, and if you don’t review your plan brochure this open season, you may be unaware of this and other new features that may affect you and yours.

Your FEHB / PSHB plan provider networks differ from the Medicare Advantage plans they offer. Confirm the doctors and facilities you currently use are on the MA provider list before signing up. Also, check each plan’s formulary list to confirm the drugs you use are available and at a cost you can afford.

Before signing up for an MA plan, review our Medicare Advantage Plan Primer – What You Need to Know guide. It will help you decide what is right for you.

One of the advantages of the MA and MPDP plans offered by our FEHB/PSHB providers is that you can opt-out at any time and return to your original FEHB/PSHB plan. Several subscribers reported that after requesting to return to their Original Medicare plan, it took many calls and months to effect the change. It wasn’t a smooth transition.

Even if you don’t intend to change plans, it’s advisable to request a print copy of your 2025 plan or go online to review Section 2 (Changes for 2025). You still have until December 9 to review your current plan and explore others of interest.

Open Season Article List

• IRMAAs and the Open Season Connection – Proceed with Caution
• 2025 FEHB & PSHB Healthcare Plan Selection Guide
• Medicare Advantage Plan Primer – What You Need to Know
• Consider Lower Cost FEHB Plans When Signing up for Medicare
• IRMAAs and the Open Season Connection – Proceed with Caution
• 2025 Health Care Premiums, Hold on to Your Hat!

Helpful Retirement Planning Tools

Federal employees who are retiring soon and recent retirees with security clearances
can search thousands of high-paying defense and government contractor jobs.

• Financial Planning Guide for Federal Employees and Annuitants
• Complimentary Retirement Planning Session
• How to Avoid Retirement Processing Delays (UPDATE)
• Hiring a Financial Planner
• TSP Guide
• Budget Work Sheet
• 2024 Pay Tables
• 2025 Federal Employees Leave Record
• Retirement Planning for Federal Employees & Annuitants
• The Ultimate Retirement Planning Guide – Start Now
• Deciding When To Retire – A 7-Step Guide
• Medicare Guide
• Social Security Guide

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center.

Over time, various dynamic economic factors relied upon as a basis for this article may change. The information contained herein should not be considered investment advice and may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Tags: FEHB / PSHB, FEHB MPDPs, GEHA Medicare Advantage Plan, MPD Plans
Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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Posted on Friday, 22nd November 2024 by Dennis Damp

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The healthcare open season can be overwhelming. There are many choices to consider, and you must use Login.gov to sign in to OPM’s Open Season Online. Once you enter the site, retirees and survivors can change plans, print out a copy of your Open Season Health Care Guide, or request hard copies of plan brochures of interest.

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Signing up for FEHB and PSHB Open Season Online is worth the time and effort. Each year, I order print copies of the plan I’m currently enrolled in and copies of a few of the other plans I intend to explore this Open Season. Plus, it’s easy to change plans on the site.

Before logging into the site, have your annuity claim number handy. They ask for it when you first sign in. Open Season Online doesn’t save your personal information from year to year. The first time you access Open Season Online each year, you must enter your annuity claim number and the last 4 digits of your social security number to gain access to your account.

Login.Gov

Access to Open Season Online requires enrolling in Login.gov, the Government’s secure login tool. Once you register with Login.gov, you will use your Login.gov credentials to sign in to Open Season Online. Many federal government websites, including OPM Services Online use Login.gov to enhance security.

When you go to FEHB Open Season Online, there is a “Login.Gov Sign-in Button” (see below) halfway down the page you must click on to start the process. This same process is used for the Postal Service Health Benefits (PSHB) Open Season Online.

Clicking on the banner will take you to the initial Login.gov Sign-in page, as shown below. With your Login.gov account, you can securely connect to multiple government accounts online; keep your login credentials handy to access other sites.

You can use your existing Login.gov email and password or click “Create an Account” to set up a new account if this is your first time using this system.

Caution: If you receive an email message saying the email address is already associated with an account, this means you previously registered for a Login.gov account using that email address. Follow the instructions in the email to reset your password or register using a different email address.

Setting Up a New Account

After clicking “Create an account,” enter an email address, select a language, and then press “Submit.” You will be directed to go to the email you entered and check for an email from no-reply@login.gov with the subject line Confirm Your Email. If you don’t see it, check your spam folder.  Click the banner in this email titled “Confirm email address.”

Next, establish a password for your new account and select an authentication method. I use the text message option; you can choose what is best for you. They will ask for your phone if you select text message, and they will send you an initial one-time code that you will enter into the next screen. Then you will be asked to agree to use this information for FEHB Open Season Online. After clicking on Agree, you will be redirected to the site.

After registering, you must only use your new Login ID email and password to enter the site.

Site Options

The first thing I do is print out the “Open Season Health Benefits Guide.” Select the state you reside in, and you will receive a printout listing all health plans available in your State, including their enrollment codes, premiums you would have paid in 2024, and the new 2025 premiums for all plans. This document guides recipients on changing plans and lists a dozen FAQs about Open Season.

OPM stopped sending these out via regular mail several years ago; now, we only receive an email titled “Important Federal Benefits Open Season Information (RI 74-4).” I received mine on October 29. The email provides links to plan brochures, including the FEDVIP program.

After signing in to Open Season Online, you can select any of the following:

• Make an enrollment change or reenroll
• Review and update dependent Information
• Review health plan brochures
• Review information on canceling/suspending your enrollment
• Review information on paying your health benefit premiums directly to OPM
• Perform an address change
• Provide or update your email address
• View frequently asked questions
• Review an Open Season Health Benefits Guide
• Review the Health Benefits Election Form
• View transaction history
• Go to OPM’s Comparison Tool
• Log off

Open Season Article List

• 2025 FEHB & PSHB Healthcare Plan Selection Guide
• Medicare Advantage Plan Primer – What You Need to Know
• Consider Lower Cost FEHB Plans When Signing up for Medicare
• IRMAAs and the Open Season Connection – Proceed with Caution
• 2025 Health Care Premiums, Hold on to Your Hat!

Summary

If you haven’t registered with login.gov it’s a good time to start. Most federal sites are adding this extra layer of security, including Social Security.

This site allows you to view updated dependent information, change plans, update your address, request hard copies of plan brochures or links to the online versions, and much more. Plus, it links to OPM’s FEHB Plan Comparison Tool.

The PSHB Open Season site should offer similar selections. I wasn’t able to login to their service because I didn’t retire from the Postal Service.

If you experience difficulties using Open Season Online, call the FEHB Open Season Express at their toll-free number, 1-800-332-9798, to complete your transaction. To make changes by phone for the PSHB, call the PSHB Helpline at 844-451-1261.

Helpful Retirement Planning Tools

Federal employees who are retiring soon and recent retirees with security clearances
can search thousands of high-paying defense and government contractor jobs.

• The Ultimate Retirement Planning Guide – Start Now
• Deciding When To Retire – A 7-Step Guide
• FREE Retirement Planning Report
• How to Avoid Retirement Processing Delays (UPDATE)
• Financial Planning / TSP
• Budget Work Sheet
• 2024 Pay Tables
• 2025 Federal Employees Leave Record
• Medicare Guide
• Social Security Guide

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center.

Over time, various dynamic economic factors relied upon as a basis for this article may change. The information contained herein should not be considered investment advice and may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Tags: FEHB Open Season, FEHB Open Season Online, Login.gov Sign-up, PSHB Open Season
Posted in BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION, WELLNESS / HEALTH

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