Posted on Friday, 6th January 2012 by

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Recently OPM clarified a number of issues around interim annuity payments and what retirees can expect when they first leave federal service. It is essential that federal employees have sufficient cash available and are financially prepared when retiring to allow OPM to complete a final adjudication of their claim.

OPM is now processing applicants in an average of 133 days however they can take up to a year to process a retirement application if information is missing or problems are encountered. Last year OPM processed over 100,000 retirements, a significant increase over the previous year. The Federal Times reported that “retirement applications saw an unexpected spike in October. That month’s 11,411 applications were 42 percent higher than October 2010, and 60 percent higher than October 2009.” With the possibility of many agencies offering VERAs and VSIPs in 2012 the delays can only get worse.

Many are receiving interim payments for far less than they anticipated due to a number of issues. OPM indicates that annuitants will receive approximately 90% of their expected NET monthly payment, less federal income tax withholdings. NET payments equal what is remaining after deducting health care and life insurance premiums from the gross amount. I received an interim payment of 70% and my claim was processed in 90 days when I retired. Some have reported receiving as much as 50% less due to extenuating circumstances and the problems still not resolved a year after they retired.

FERS retirees need to be aware of the fact that OPM doesn’t include the FERS Supplement in the interim payment because they don’t have the data available until the retirement is completely processed. OPM reported that a number of factors cause reduced interim payments or prevent OPM from initiating interim payments. These factors include:

  • Court orders that are on file at OPM. Court orders can contribute to as much as a 50% reduction in interim payments. Check out our Divorce Forum for clarifications and informative articles on this subject.
  • Part time service
  • Unpaid military deposits
  • When a redeposit wasn’t paid for refunded service creditable towards disability retirement
  • Employees entitled to special retirements for LEO, FF, ATC or other special retirement programs
  • CSRS offset applicants with 90 days of or over the age of 62
  • Non-deduction service performed after 10/1/1982 creditable under CSRS where the deposit has not been paid in full
  • Deposits have not been paid for FERS creditable non-deduction service
  • VA part time direct medical solutions (DMS)physicians, including doctors, scientists, and surgeons
  • Refunded service creditable towards CSRS non-disability retirement ending on or after 3/1/1991 where the deposit has not been paid
  • Excess LWOP
  • Service that is unverified or missing
  • Where an insurable interest survivor election is made
  • When no survivor election is made
  • Receipt of military retired pay

Don’t be left in a lurch when you leave. Check out my article titled “Can You Survive on Interim Retirement Checks” to avoid OPM retirement processing delays when you leave and learn how to be prepared for the unexpected.

TSP Salary Deferral Amount Increased

A few months ago the IRS released the new deferral limits for the TSP. For 2012 you may defer up to $17,000 into your TSP. If you are 50 or older you may take advantage of the catch up provision and defer an additional $5,500. A common question that I’m asked is, if I’m turning 50 during 2012 when can I start deferring the additional amount. The answer is if you are turning 50 during 2012 and wish to take advantage of the catch up provision you may begin the extra deferrals with the first payroll of 2012.

  • To change you TSP contribution amount you will need to fill out  form TSP 1.
  • To take advantage of the catch up provision you will need form TSP-1-C.

The end of the year is also a great time to review your beneficiaries. A number of life changing events can happen throughout the year. If you’ve not reviewed your beneficiaries for a while I would recommend taking a few moments to review them. I had a client pass away a few months ago. He had changed his beneficiaries without his wife’s knowledge. When he had passed away unexpectedly I had to inform his wife that she wasn’t the sole beneficiary of his accounts. I can say first hand that visiting the spouse in this case was very difficult.

Paul Risser, our new Financial Planning Forum Host, submitted this timely update. Visit his forum for additional guidance. You can add Paul’s articles to your email newsletter list by clicking here and type in your email address. Instructions on how to update your newsletter profile will be emailed to you. Paul will be contributing insightful articles on economic trends and retirement planning targeted towards federal employees and retirees.

Paul H Risser is an Investment Advisor Representative with the Securities and Investment Advisory Services offered through Transamerica Financial Advisors, Inc. Member FINRA, SIPC, and Registered Investment Advisor.


Recent Forum Host Articles:

2012 Leave Chart

The 2012 Excel Leave Chart that we posted online late last year was originally published in the 2007 Excel version. Many with earlier versions of Excel were not able to open it. We converted the leave chart to an earlier version of Excel with the standard xls extension that you will be able to download. Use this chart to track your leave and to set target retirement dates. The updated Leave Chart is now available online. 

Retiree Job Postings

We continue to post new job listings on our Jobs Board from employers nationwide that are looking for retired federal employees. Many retirees supplement their retirement income with full or part time work. Here are several new job listings that you may find interesting:

  • Comptroller / Accounting Manager for the Washington D.C. area. Maintain accounts of assets, liabilities, commitments, receipts, disbursements and other financial transactions of a federal agency.
  • Coupon Merchandisers for Reston/Great Falls, VA, Collinsville, VA, Richmond/Chesterfield, VA, Tuscaloosa, AL,   Greensboro/Centreville, AL, and Bangor, ME. Pay from $8.00 to $9.50 per hour and flexible hours.
  • Ski Resort Jobs – Vail CO, UT, CA and other locations. (Multiple positions)
  • Telesales Exec Trainee NE I, Orlando Florida

Learn more about your benefitsemployment, and financial planning issues on our site and visit our Blog frequently at to read all forum articles.

Request a Retirement Benefits Summary & Analysis from a local adviser. A sample analysis is available for your review. Includes projected annuity payments, income verses expenses, FEGLI, and TSP projections. This service is not affiliated with

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The information provided may not cover all aspect of unique or special circumstances, federal regulations, and financial information is 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 article is not intended nor should it be considered investment advice. Our articles and replies are 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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