Bob Gehlken

 Eligibility  Computation of Benefits  Creditable Service  Sick Leave Credit  Voluntary Contributions

CSRS  Traditional Single Benefit Retirement Plan  Contributions: 7%  Offset Employees Contribute.8% to CSRS & 6.2% to OASDI FERS  3 Tier Retirement Plan  FERS Annuity  Thrift Savings Plan  Social Security  Contributions:  Hired before 2013:.8%  Hired in 2013: 3.1%  Hired after 2013: 4.4%

CSRS  Age 55 & 30 Yrs Svc  Age 60 & 20 Yrs Svc  Age 62 & 5 Yrs Svc  Must have worked 1 year out of last 2 years under CSRS. FERS  MRA & 30 Yrs Svc  Age 60 & 20 Yrs Svc  Age 62 & 5 Yrs Svc Early Retirement MRA + 10  Benefit reduced by 5% for each yr under 62.

Birth YrMin AgeBirth YrMin Age Before & 2 mos & 2 mos & 4 mos & 4 mos & 6 mos & 6 mos & 8 mos & 8 mos & 10 mos & 10 mos 1970 & After

CSRS  Age 50 & 20 yrs svc  Any age & 25 yrs svc Benefit reduced by 2% for each year under age 55 FERS  Age 50 & 20 yrs svc  Any age & 25 yrs svc No reduction on FERS portion of annuity

CSRS 5 years civilian service Do not take a refund of CSRS contributions Apply directly to OPM at age 62 FERS 5 years civilian service Do not take a refund of FERS contributions Become eligible at: – 62 with 5 yrs svc – 60 with 20 yrs svc – MRA with 30 yrs svc Apply directly to OPM

 Retiree can elect to postpone receipt of annuity  Amount of age reduction is reduced or eliminated.  Age reduction is eliminated if: ▪ Less than 20 years of service – annuity commences at 62 ▪ At least 20 years of service – annuity commences at 60  Health and life insurance is terminated until annuity commences.  Apply to OPM 60 days before you want annuity to commence.

 Weighted average of salary rates in effect during a 3 year consecutive period.  Use the 3 year period with the highest salary rates.  In most cases is the last 3 years before retirement.  Each salary rate is weighted by the amount of time the rate was in effect.

Salary DatesSalary XFactor =Earnings 01/01/ /07/9545, /08/ /06/9647, ,894 01/07/ /11/9648, ,744 05/12/ /04/9751, ,572 01/05/ /31/9753, , ,099 HIGH 3 = 151,099/3 = $50,366.00

1.50% x High 3 x First 5 yrs of svc plus 1.75% x High 3 x Next 5 yrs of svc plus 2.00% x High 3 x Remaining svc equals Basic Annuity

 Annuity is computed like a regular CSRS employee however,  Annuity is reduced by that portion of Social Security benefit that is derived from your employment as an offset employee.  CSRS offset is not to be confused with the Windfall Elimination Provision (WEP).

GENERAL FORMULA  1% x High 3 x Years of service ENHANCED FORMULA  If age 62 with at least 20 yrs of total svc  1.1% x High 3 x Years of service

 Service prior to electing FERS computed using CSRS formula  Service after electing FERS computed using FERS formula  Same high-3 used for both computations

 Estimated SSA benefit that supplements the FERS annuity until age 62  Eligibility Requirements  Must be under age 62.  Vol retirement without age reduction.  Early Out/DSR may receive once they reach their MRA.  Must have one calendar year (Jan-Dec) of FERS coverage.

 All honorable active duty  Nat’l Guard Svc performed under Title 10 RETIRED MILITARY  Regular Retirement - service not creditable unless retired pay is waived & deposit is paid.  Reserve Retirement - service is creditable without waiver, deposit may be required.

 FIRST EMPLOYED BEFORE  Deposit not required if not eligible for Social Security.  RETIRE BEFORE AGE 62 ▪ Receive credit until age 62 ▪ If deposit not paid & eligible for SSA benefits, annuity recomputed to exclude military svc ▪ OPM only checks with SSA at age 62

 FIRST EMPLOYED BEFORE  RETIRE AFTER AGE 62 ▪ If eligible for SSA benefits and deposit is not paid, svc will not be used to compute annuity. ▪ OPM only checks eligibility at time of retirement.  FIRST EMPLOYED AFTER  Deposit is required

AMOUNT OF DEPOSIT  7% of earnings during military svc plus interest charged at a variable rate.  7.25% for svc performed to  7.4% for svc performed to  Deposits must be paid to employing agency prior to retirement.

 Deposit is required to receive FERS Retirement credit.  Deposit is 3% of earnings during military service plus interest.  Deposits must be paid to employing agency prior to retirement.

SERVICE PERFORMED BEFORE  Amount of deposit  Deductions for CSRS that would have been made plus interest charged at 3%.  Payment is optional  If not paid, receive credit for svc but annuity reduced by 10% of unpaid deposit.

SERVICE PERFORMED AFTER  Deposit must be paid to receive credit for service  Amount of deposit ▪ Deductions for CSRS that would have been made plus interest charged at a variable rate.

 PRE SERVICE  Deposit must be paid in order to receive credit.  Deposit is 1.3% of base pay plus interest charged at a variable rate.  POST SERVICE  Not creditable under FERS.

 PRE SERVICE  Redeposit is optional  Annuity will be actuarially reduced if refund is not repaid.  POST SERVICE  Redeposit must be paid to receive credit for refunded service.

 First covered under FERS on or after  Can redeposit refunded FERS contributions.  First covered under FERS prior to  Cannot redeposit refunded FERS contributions  Cannot receive retirement credit for refunded service

CSRS Used to extend svc for computation purposes. Cannot be used to extend svc for eligibility. FERS 100% of unused sick leave beginning 01/01/14. TransFERS – Frozen sick leave amount is applied to CSRS component and remaining amount is applied to FERS component.

SCD: Sick Leave: 1067 hrs USE 968 HOURS YR MO DAY = ONLY YEARS & MOS OF SERVICE ARE USED TO COMPUTE ANNUITIES. Retirement Date: Total Svc: 37yr 3mos 14day USE 1067 HOURS YR MO DAY HOURS OF EXCESS SICK LEAVE

CSRS  COLA = FULL CPI 1ST COLA IS PRORATED  1/12 FOR EACH MONTH ON RETIREMENT ROLLS  EFF DEC 1, PAYABLE IN JAN FERS  BEGIN AT AGE 62  “DIET COLA” CPICOLA UP TO 2% FULL CPI 2 - 3%2% 3% & UPCPI-1%

Available only to CSRS and CSRS offset. Cannot owe any deposits or redeposits. Limit on contributions is 10% of career earnings. Earnings can be tax deferred at withdrawal. Can use to purchase additional annuity. – Increases annuity $7 a year for each $100. – Additional 20 cents for each year over age 55. Current interest rate is 2%

 Survivor Benefits  Death in Service Benefits  Disability Retirement  Health Insurance  Life Insurance  TSP

 Refund of contributions  Benefit payable to current spouse  Court ordered benefit payable to former spouse  Children’s benefit  Insurable interest

CSRS MAX BENEFIT = 55% OF BASIC ANNUITY LESSER BENEFIT = 55% OF ELECTED BASE. – REQUIRES SPOUSAL WAIVER FERS 50% OF BASIC ANNUITY 25% OF BASIC ANNUITY – REQUIRES SPOUSAL WAIVER

CSRS  2.5% OF FIRST $3600 OF SURVIVOR BASE PLUS  10% OF THE AMOUNT OVER $3600 FERS  10% - FULL ANNUITY  5% - REDUCED ANNUITY

 Affect 3 forms of benefits  Refund  Apportionment  Survivor benefits  Takes precedence over employee elections

Named person can expect to receive some financial benefit from continued life of employee. Examples: parent, disabled child or sibling Benefit is 55% of annuity (both CSRS & FERS) AGE OF NAMED PERSON IN RELATION TO EMPLOYEECOST LESS THAN 5 YRS 10% 5 T0 1015% 10 TO 1520% 15 TO 2025% 20 TO 2530% 25 TO 3035% 30 OR MORE40%

Automatic Payable to age 18, age 22 if a full time student Living Parent: Lesser of $510*/mo per child or $1,532*/no. eligible children. No Living Parent: Lesser of $613*/mo per child or $1,839*/no. eligible children. FERS: benefit is reduced by SSA benefits payable. In many cases, benefit is reduced to zero. * 2015 Rate

CSRS Must have 18 mos svc Receive greater of 55% of accrued benefit or 55% of guaranteed minimum. FERS Must have 18 mos svc Basic death benefit: $32,326.58* + 1/2 final salary With 10 yrs svc: – Receive annuity = 50% of accrued benefit * 2015 amount

A built in feature of both CSRS and FERS Designed to allow employees not eligible for optional retirement benefits to retire because of disability Applicants must submit medical evidence and OPM has to approve the retirement

CSRS  Any Age  5 years of creditable civilian service FERS  Any age  18 months of creditable civilian service

 Receive the greater of your earned annuity or the guaranteed minimum.  Guaranteed minimum is the lesser of:  40% of your high 3 average salary or  Benefits computed as if you retire at age 60

 Year 1  60% of your high 3, less 100% of your SSA benefit  Year 2  40% of your high 3, less 60% of your SSA benefit  Age 62  Benefit is re-computed using the general FERS formula. Years on the disability rolls count as creditable service and high 3 is increased by intervening COLAs.

Eligibility Requirements  Must retire on an immediate annuity  Must be enrolled at time of retirement.  Must be enrolled since 1st opportunity to enroll or at least the 5 yrs preceding retirement. Gov’t continues to pay their portion of premium.

 FEHBP coverage primary as long as you work  Once retired and reach age 65, Medicare Pt B is primary and FEHBP is secondary  Should I elect Medicare Pt B (if 65 and retired)?  Fee for service plans ▪ Only pay for what Medicare does not pay  HMO ▪ Continue to pay copayments

Eligibility Requirements  Can continue those options for which you were enrolled since first opportunity to enroll or for at least the 5 yrs preceding retirement.  Must be enrolled in those options at retirement.

 75 % Reduction  Maintain pre-retirement coverage until age 65  At 65, coverage reduces 2% per month until coverage reduces by 75% and you pay no premium  50% Reduction  Maintain pre-retirement coverage until age 65  At 65, coverage reduces 1% per month until coverage reduces by 50%  No Reduction  Maintain pre-retirement coverage forever

 Monthly Premiums OptionBefore 65After 65 75% Reduction.3250No Cost 50% Reduction No Reduction (All premiums are per $1,000 of coverage)

Option A provides $10,000 of coverage  Coverage continues until age 65.  At 65, coverage begins to reduce 2% per month until coverage reduces to $2,500. Premiums end.  Monthly Premiums: Age $3.03/moAge $5.85/mo Age $13/mo

Option B (Multiples of Pay)  Full Reduction  Coverage continues until age 65. At 65, coverage reduces 2% per month until coverage ends.  No Reduction  Continue coverage for rest of your life.  May reduce the number of multiples you want to continue into retirement.

 Monthly Premiums AgeCost per $1, and up5.2

Option C (Family Coverage) Full Reduction – Coverage continues until age 65. At 65, premiums end and coverage begins to decrease 2% per month until coverage ends. No Reduction – Coverage continues for rest of life. Can decrease the number of multiples you want to continue into retirement.

 Monthly Premiums AgePremium per multiple 50-54$1.95/mo 55-59$3.14/mo 60-64$5.63/mo 65-69$6.50/mo 70-74$7.37/mo 75-79$9.75/mo 80 and up$13.00/mo

 FEDVIP – Coverage continues in retirement  Long Term Care – Coverage continues in retirement  Flexible Spending Accounts – If you retire before the end of plan year, you cannot receive a refund of monies in your account but you can receive reimbursement for services performed before retirement.

 Pre-tax contributions  Can contribute up to $18,000 for 2015  Catch Up Contributions ▪ Must be at least age 50 by end of calendar year ▪ Can contribute additional $5,500

 After-tax (Roth) contributions  No income restrictions like Roth IRAs  May contribute $18,000 in regular Roth contributions  May make $5,500 in Catch Up contributions  Combined Contribution Limits (pre-tax and Roth)  Contributions to both cannot exceed $18,000  Catch Up Contributions to both cannot exceed $5,500

 General Information  Cannot convert your existing pre-tax account to a Roth  Matching agency contributions go your traditional acct  May transfer Roth 401(k), Roth 403(b), and Roth 457(b) to your Roth account.  Cannot transfer a Roth IRA into your Roth account  Earnings from Roth are tax-free if 5 yrs have passed since Jan 1 of the year you made 1 st contribution and you are 59 ½ or older or permanently disabled

 Leave money in account until age 70 ½  If retiring after 70 ½ withdrawal must begin by April 1 of the year following retirement.  Take a lump sum payment  Receive monthly payments  Purchase an annuity  Rollover to an IRA

Types of TSP Annuities ▪ Single Life Annuity (with level or increasing payments) ▪ Joint With Spouse Annuity (with level or increasing payments) ▪ Joint With Someone Other than Spouse Annuity (with level payments only) ▪ Person must be a former spouse or someone with an insurable interest. ▪ Blood or adopted relatives closer than a 1 st cousin are assumed to have an insurable interest.

 Provides a monthly payment to you as long as you live.  Two types of payments.  Level Payments – monthly payments remain the same.  Increasing Payments – monthly payments increase based on the change in the CPI. Payments can never increase more than 3% and can never decrease.

 Two types of joint annuities  100% Feature  The survivor (whether you or your spouse) continues to receive the annuity without reduction.  50% Feature  The survivor (whether you or your spouse) receives 50% of the annuity.

CASH REFUND  If you and your joint annuitant die before the amount used to purchase your annuity has been paid out, the remaining amount will be paid to your beneficiary.  This feature is available with a single life and joint life annuity. TEN YEAR CERTAIN If you die before receiving 10 years of payments, payments will continue to your beneficiary for the remainder of the 10 years. If you live beyond the 10 year period, you continue to receive payments but no payments are made to your beneficiary. Only available with single life annuities.

 Benefits paid to your designated beneficiary  Designate beneficiaries on a TSP-3  Maintained by TSP  If no beneficiary, benefits paid according to standard order of precedence

If spouse’s share is $200 or more – TSP establishes beneficiary participant account – Entire balance is invested in G fund until spouse chooses different investment choice or withdraws account – Monies are not taxed until they are withdrawn

 Withdrawing Spouse Beneficiary Account  Single Payment ▪ May be rolled over to an IRA or eligible employer plan ▪ Payments not rolled over are subject to 20% tax withholding  Purchase a Life Annuity  Elect Monthly Payments

Death benefit payment is made directly to the beneficiary – Non-spouses cannot retain a TSP account Benefits may be rolled into an inherited IRA.

 Review eOPF to ensure all service is present   Analyze options for deposit and redeposit svc  Talk to a financial planner  Analyze TSP investment mix  How can you make up any retirement shortfalls  Review insurance needs  Request a retirement estimate