Washingtonpost.com: Live Online

Stephen Barr, who writes the Federal Diary column for The Post, hosted Tammy Flanagan, senior benefits director for the National Institute of Transition Planning at noon Wednesday. Flanagan's expertise includes all aspects of federal benefits as well as specifics on buyouts, discontinued service, retirements resulting from downsizing, law enforcement benefits, the Senior Executive Service, retiring judges and mid-career planning.

The transcript follows.

Editor's Note: Washingtonpost.com moderators retain editorial control over Live Online discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions.

Stephen Barr: Tammy, thanks so much for making time for us today. It's a pleasure to have you back again!

To get things rolling, I'll ask a question that many readers have an interest in -- the long-term care insurance program that the Office of Personnel Management will kick off next week. Who would be a good candidate for early enrollment?

Again, thanks for joining us, Tammy. We appreciate your expertise.

Tammy Flanagan: Thanks for inviting me back to chat with your readers today! You are right... everyone is asking about the new long-term care insurance enrollment. The early enrollment that begins on Monday and will run through May 15 will mainly be attractive to those employees who may be having a birthday prior to the general enrollment (the price will be higher at their next birthday) as long as they understand the general nature of this kind of insurance and have done some comparison shopping. Also... employees planning to retire within the next few months may want to enroll so that they won't have to go through the medical underwriting requirements that will be tougher for retirees.

Kensington, Md.: I'm almost ready to retire and would like an accurate picture of my annuity. I worked in a part-time position after 1986 until 1993. However, I worked a full tour during most of that seven-year period. I would like to get a record of that before putting in retirement papers even though I understand OPM will ask my agency for that information. I do not have pay slips for that time period. From the OPM site it looks like an executable program can be run to obtain that information but I'm not able to do that. Can any of this be verified before signing out? Thank you.

Tammy Flanagan: For part-time retirement estimates, you would be best advised to ask your personnel office for an estimate. They can retrieve the records needed to compute the pro-rated benefit for you. since you indicate that most of the time you were scheduled to work part-time you actually worked a full-time schedule, there shouldn't be a significant affect on your retirement benefit. OPM will not do this computation for you until they receive your retirement paperwork.

St. Louis, Mo.: Both myself and my husband are federal employees. I am employed by the U.S.Army and my husband is employed by the U.S. Postal Service. Currently, my husband is enrolled in FEHB (Family Plan), but I am not. My question is: When we both retire and neither one elects survisor benefits for the other spouse (select self-only annuity), and the spouse that carries the family coverage under FEHB into retirement dies--will the remaining spouse be able to continue using FEHB coverage? Do I need to enroll in Self Only even if my husband is enrolled in Family Plan? Would that be double coverage? Do I need to be enrolled for 5 Years before retirement even though I was covered under my husband's FEHB Enrollment? Any other information that applies when government employees are married to each other, would be greatly appreciated? Thanks.

Tammy Flanagan: OK... here goes! When you are married to a Fed you don't have too much to worry about in terms of continuing your federal health insurance. This means that you can have two self-only plans, your spouse or you can carry one self an family enrollment...it doesn't really matter. You both have had 5 years of coverage regardless of who has been paying the premiums! While working, it makes sense for your Postal Service spouse to carry the insurance since it is less expensive for him! But after retirement it is the same price. Survivor benefits won't be an issue for health insurance since if you happen to be under his plan and he predeceases you... you can convert the coverage to your retirement (within a time limit). But... don't forget that if you don't provide each other with survivor benefits... you (or your spouse) will have to live on their own retirement since there won't be any benefits coming from the spouse! You should consider whether you need to provide the survivor annuity for income and financial planning.

Woodbridge, Va.: I am 62, single, (GS 09/10) with 33 1/2 years Fed svc. I am contemplating retirement in Oct. I need to know how much Fed/State taxes, medicare, hospitalization and life insurance is taken from my monthly annuity. Everything seems to be computerized, there is no one I can talk to face to face. I have my 40 quarters in Soc Sec but because of the "windfall elimination" I will be hit with a 90% deduction. So, I cannot depend on receiving more than $38 a mo on Soc Sec. Can you help answer these questions? Thank you!

Tammy Flanagan: Hi! You are in pretty good shape with 33+ years of service. For health and life insurance... the premiums that you are paying now, will continue into retirement (as long as you've held the coverage for 5 years). The only difference will be monthly rather than biweekly withholdings. Your retirement is subject to Federal income tax and the portion that represents your contributions will be tax-free. See IRS Pub 721 to compute this amount (or consult your tax advisor). Some states will exempt or partially exempt your annuity. Virginia exempts part of your retirement if you are over a certain age (either 62 or 65...not sure). You can get an estimate of your Social Security after the windfall reduction by multiplying your SSA estimate by 45% or subtracting about $290 from it... you estimate will be the "higher" of the two results!

Washington, D.C.: I transferred into FERS from the CSRS Offset plan during the original open season in 1986 or 1987. When I retire, will all of my monthly retirement pension payments be calculated as FERS payments, or will some portion also be calculated at the CSRS pension rate? My total CSRS service was more than four but less than five years.

Tammy Flanagan: If you were consdered under the CSRS Offset program, then you would have a portion of your service computed under CSRS rules and the remainder under FERS rules. To tell you for sure the amount, I would need to review your records... check with your personnel office for an estimate of your future retirement benefit.

Bethesda, Md.: I am planning to retire at the end of this year. I will have 36 1/2 years service. My wife will be retiring in 2 1/2 years, and she will have 38 years service. Both of us have worked for the federal government. My question is what advice would you have concerning Survivors' annuities. We have no children, and very little debt. We also have contibuted the max to TSP funds, as well as IRA's for the past 10 years. Your advice is appreciated. Thank you...

Tammy Flanagan: Good question! Sounds like both of you are retiring with similar careers and I am assuming similar in age and health. Here's the choice: Let's say that you both have $25,000 retirement benefits. You can each take no survivor benefit and while living will be entitled to $50,000 /year. Hopefully you will be investing about $5,000 of it so that the surviving spouse will inherit this to supplement their own retirement. You also have the option of each taking reduced benefits so that your combined retirement will be about $45,000. This way, when one spouse dies, the other receives 55% of the $25,000 and their own retirement goes back up to $25,000 (plus all COLA's too). I like the survivor benefit for the safety of the "what if I get hit by a bus 2 years after I retire... my savings would not be enough for my spouse to continue their comfortable lifestyle! Insurance is an option, but only if you are in good health and young enough to get good premiums... this is really a question that you should spend some time on... it is an irrevecoble (sp) choice!

Arlington, Va.: I am planning to retire at the end of May. However, my husband will continue working full-time for the Federal government, so I will be the spouse of a current employee, as well as a retiree. Will the long-term care underwriting requirements for spouses be more restrictive than that for employees? Should I consider purchasing the long-term care insurance now, or will it be virutally as accessible to me as a spouse? I am 56 (until Sept.) and my husband will be 55 in May. Thanks.

Tammy Flanagan: Because you are in the age group where the premiums start getting a bit more expensive and we don't know all the rules that will be applicable to retirees yet...I vote for considering enrollment while you are still employed. Before signing up... get a few quotes from a couple of private insurance providers so that you have a frame of reference.

San Diego, Calif.: For FERS Special Category employees (law enforcement) can you offer some guidelines or formula to estimate the amount of Social Security Supplement payable upon retirement until receipt of full SS benefits? Also, if you have prior employment covered by Social Security before FERS employment, does that increase the amount of the Supplement? Thanks.

Tammy Flanagan: The FERS Supplement is payable to employees who retire under age 62 on "unreduced" FERS benefits. As a law enforcement officer, you will qualify for the supplement but it will be subject to an earnings limit when you reach the FERS MRA (55 - 57). Until then it will be computed on the FERS (only) service that you performed. As a rule of thumb... this benefit is worth $20 - $30 / month for every year under FERS (you can get a better estimate by using the calculator at www.opm.gov or www.seniors.gov). After the MRA... if you earn more than about $11,000 / year (earned income)... the supplement will be reduced by $1 for every $2 you exceed the earnings limit.

Washington, D.C.: Please explain CSRS-offset. No one here seems to be able to tell me how it works. How much Social Security will I lose because of it?

Tammy Flanagan: CSRS-Offset is a retirement coverage designed for employees who have at least 5 years of CSRS coverage and generally those who had a break in service of at least a year and were rehired after 1983. The retirement of these employees will be calculated exactly like any other CSRS employee until they are age 62 and qualified for Social Security benefits. The amount of the offset from your CSRS benefit generally equals # of offset years divided by "40" and multiplied by your age 62 Social Security benefit. There is no offset to your Social Security benefit, but you may still be impacted by the Windfall Elimination Provision (assuming you have less than 30 years of Social Security covered substantial wages). The promise to you is that the combination of your SSA benefit and your reduced CSRS benefit will never be less than your full CSRS benefit (and usually you will come out ahead after age 62)... in addition, you are not subject to any reduction to SSA spousal / widow's benefits if you are married and you are entitled to a higher Social Security benefit from your spouse.

Washington, D.C.: As a FERS employee, is there any benefit to accumulating my sick leave (other than being able to use it when I'm sick or disabled)?

Tammy Flanagan: Yes... in addition to the very important fact that your sick leave serves as your short-term disability insurance, you should not use it up yet! There is always the possibility that the law will be changed to allow credit for unused sick leave towards your future FERS retirement. THere is currently a proposal to this effect for registered nurses who work for the federal government... if passed that would be good news for other FERS employees since a precedent would be set for a future change.

Roanoke, Va.: What is the rule on health insurance before you retire? Do you have to carry it for the three years prior to your reitirement date? Does it matter if you switch from one federal insurance plan to another during that three years? For instance, switch from GEHA to Trigaon during the three years prior to your reitirement date.

Tammy Flanagan: You must have 5 years of coverage under any FEHBP plan and it has to be the 5 years immediately prior to your retirement. You may switch plans during the open season periods without affecting the 5 year rule. Employees who are covered by a spouse's non-federal health insurance are primarily the ones who have to be concerned about this rule! You will continue to have open seasons to switch health plans even after you retire.

Washington, D.C.: My friend recently retired with 39.5 years of federal service under the CSRS system. He had a total of 438 hours of annual leave that he cashed in. He retired on Jan. 3, 2002. What pay scale should he have been paid under for his annual leave that he cased in -- the 2001 pay scale or the 2002 pay scale?

Tammy Flanagan: Your friend is entitled to be paid for all but 48 hours of that leave at the 2002 pay rate. Be aware, however, that some payroll offices will issue this extra payment as a separate check after they issue the lump sum leave payment. He should contact someone from his payroll office to inquire about this.

Rockville, Md.: I am employed under the CSRS. I have heard that if you stay in the Federal Service for 42 years before you retire you can collect the amount you have paid into the retirement system at the time you retire. Is this true?

Tammy Flanagan: If you work more than 41 years and 11 months (to be exact : )) under CSRS, you will be entitled to a refund of the excess retirement contributions that you have for the amount of service you worked beyond 42 years. You will still use the same pro-rated tax computation for the retirement contributions that represent the 42 years of service. See IRS pub 721.

Hyattsville, Md.: I am a CSRS employee and I would like to retire on my 55th birthday, January 11, 2003. My SCD is 11/24/65. Is January 11, 2003 my best retirement date? Will my lump sum for unused annual leave be paid at the 2002 pay rate or at the new 2003 pay rate if I retire on 1/11/03?

Tammy Flanagan: Since you will be eligible for retirement after 1/3/2003, then I would suggest waiting until January 31 or even Feb 3 to retire. The only downside is that you won't be able to cash out "use or lose" leave since you will lose your leave on January 12. I wouldn't suggest retiring on January 11 unless you will have a large sum of excess leave and you are willing to not receive a retirement check for January. Either way... you lump sum leave will be paid at 2003 pay rates.

Charleston, W. Va.: Any guidance on when would be the best time to retire - Dec. 31 or Jan. 1? I'm a CSRS employee.

Tammy Flanagan: If you are CSRS, I would suggest retiring on January 3 (Friday)... This will allow you to be paid at your full salary for Jan 1 - 3 and still be entitled to a January retirement check (27/30 of the month). Also... all but 40 hours of your lump sum annual leave payment will be at the 2003 pay rate. The downside is that you may have about 10,000 other employees joining you on this date if the same number of employees retire as did at the end of last year... things may be processed a little slower than normal!

River Forest, Ill.: Re: Part-time annuity computations,in answer to the earlier question. My understanding is that if his tour was actually officially changed (by being documented on an SF-50), then he will get full time credit. However, if the tour was not changed and he was just working unscheduled extra hours (not shown on an SF-50) then it will count as part-time. It's something part-time employees need to be aware of if they increase their hours to help during a busy time at the office, for example.

Tammy Flanagan: Under the current rules for computing part-time service, the actual "hours" are used in the computation. OPM will use payroll records that document the total number of hours that the employee worked rather than the schedule that was listed on their SF 50. The actual hours are divided by the full-time hours to come up with the pro-ration factor.

Asheville, N.C.: Would it be worth it to work a year or two at a job that counts for Social Security after I retire, to finish out my 40 quarters? (To get a few extra dollars a month (even $38 could be helpful) -- or to be eligible in case the Windfall thing is changed or eliminated)? Thank you.

Tammy Flanagan: Yes... I always say... a little Social Security is better than none... especially since it appears you are only a few credits shy of 40. The only possible downside is if you have post-56 military service that you didn't pay for... that's another story that I'll get into if the question comes up.

Arlington, Va.: When I left the government (a silly unpleasantness with Reagan over striking air traffic controllers) in 1981, I withdrew my retirement contributions. Came back in in late 1984; under FERS; 30 years in June 2004; 55 December 2004; much higher grade now than before I left in 1981. My question is: how do I determine if it's better to pay back the withdrawn contributions. Thanks.

Tammy Flanagan: It sounds like you had enough service to have a CSRS component to your FERS retirement (you needed at least 5 years of service before you separated in 1981). If so... then you will be given the option to have your retirement reduced "actuarilly" to pay back the refund over your life in retirement as opposed to a lump sum. There is no additional interest that accrues after you retire and if you die early, it is considered paid up (it does not affect the survivor's annuity)... for these reasons, you may want to consider using this money for other investments ... say keep it in your TSP... to be sure have your retirement benefit estimated by your personnel office with and without the payback!

Middletown, Md: Do I have to make up military money if I don't expect to draw benefits from Social Security? Does my wife's Social Security get reduced because I will draw a federal retirement check? Thanks.

Tammy Flanagan: The question is when were you hired (before or after 10/1/82) and do you have 40 quarters (credits) of Social Security (or will you by the time you are age 62)? These questions are critical!! Generally speaking... it is usually advisable to pay your military deposit if you will be (or might be) qualified for social security benefits at age 62. Do not retire until you understand exactly how this affects you... it is very important that you make the right decision! Your wife's Social Security that she has earned for herself will not be impacted by your CSRS>

Washington, D.C.: How can I get credit for the time I worked in the DC Government in the late 1960's. I just found out it was not included in my Comp Date.

Tammy Flanagan: Usually, your personnel office will be able to contact the personnel records center or DC Gov't to obtain records of your past employment...if you have your own "personal" records at home for this appointment (SF-50's)... you may be able to provide enough documentation to get this credited.

Arlington, Va.: I am planning to retire next year and I will be significantly under age 55. I'll have 25 plus years in CSRS and my job will be eliminated. I am planning to provide only a $1 to my spouse in terms of survivor benefits -- mainly to preserve health care for him in the event I die. He is in poor health and has maximum Social Security benefits. Does a dollar benefit sound appropriate?

Tammy Flanagan: If your husband is dependent on you for income, you may want to consider a higher amount for him. If he predeceases you, then you can cancel the election. Also... you may want to use 55% of $3,600 as your minimal election since this will only reduce your retirement by $90 / year and should provide him enough income to actually pay the premiums for the health insurance.

Fort Belvoir, Va.: If my agency abolishes my job due to a reorganization and I have 27 years of service, can I elect to retire on a reduced pension? Or, am I compelled to accept another job offer from my agency? Can you recommend a retirement benefits calculator that projects "then year" benefits distributions?

Tammy Flanagan: If you are offered a position within your commuting area that is within 2 pay grades of your current position and you turn it down, you will not be entitled to discontinued service retirement. I am not sure what you mean by "then year" benefits distributions?

Alexandria, Va.: My agency claims it has no record of my buy back of miltary time. What do I do?

Tammy Flanagan: If you have changed payroll offices since you made the payment, then that record would have been sent to OPM. You may write to OPM at their records center in Boyers, PA 16017 to be sure. This is why it is always a good idea to maintain proof of your payment in your own "personal" personnel folder!

Green Bay, Wis.: How are the Service Days computed? Thank you.

Tammy Flanagan: In general, your retirement service computation date is subtracted from your retirement date and if you are entitled to sick leave, it is added on to the total service. Your retirement benefit is computed on the whole years and months of service... anything less than 1 month (30 days) is dropped off.

Annapolis, Md.: Tammy, will my CSRS retirement annuity be computed upon the high-three of my base salary alone, or base plus locality pay? Thank you.

Tammy Flanagan: Locality pay is considered part of base pay and will be included in the high-three calculation. Overtime, bonuses, and awards, however, are not included.

Kensington, Md.: In what might be considered more complicated retirement calculations, would you recommend retaining someone to review OPM's work and, if so, what kind of advisor would that be?

Tammy Flanagan: It would be nice if there was a group of private benefits consultants who would do that kind of work.. unfortunately there are very few people who do individual counseling outside of your agency and OPM. This is why employees are encouraged to attend retirement planning seminars to be sure they understand what influences their benefits and some of the basic computations... fortunately, most situations are not that complicated and can be done by the employee with some guidance. Since we are out of time I would invite you to visit our website: www.nitpinc.com and consider signing up for one of our upcoming comprehensive pre-retirement classes where you will learn things that will help you to ask the right questions and understand your benefits much better! See you in class! Thanks again for inviting me Steve!

Stephen Barr: Tammy, thanks so much for joining us today! As usual, we had many more questions than time permits you to answer. Thanks to all of you who sent in questions and comments, and thanks to all of you who take the time to read this transcript. See you next Wednesday.

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