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The
COMPLETE GUIDE
to Federal Employee Benefits
How To Avoid Going Broke After Working Your Entire Life For The Government russell Armstrong
by
“It’s good to have money and the things that money can buy, but it’s good, too, to check up once in a while and make sure that you haven’t lost the things that money can’t buy.” --George Horace Lorimer
CHAPTER ONE Federal Employees Health Benefits Program (FEHB)
H
ealth insurance is a hot topic these days, with many under- and uninsured individuals suffering because they can’t afford adequate healthcare. The Federal Employees Health Benefits Program (FEHB) is one of the most important benefits you’ll receive as a federal worker. Through it, you’ll be able to enroll in health, dental, vision and life insurance programs, while also taking advantage of flexible spending accounts and long-term care insurance options. The FEHB umbrella covers a big chunk of your benefits as an employee. Understanding what you are (or, aren’t) eligible for, and knowing how to apply for and take advantage of these benefits, is extremely important. Here’s a rundown of the various benefits that make up the FEHB:
* Health: Federal employees, retirees and survivors can choose coverage from the widest selection of health plans in the country. * Dental: Eligible employees and annuitants can choose among four nationwide and three regional dental plans. Nationwide plans also offer international coverage. * Vision: Eligible employees and annuitants can choose among three nationwide vision plans. Nationwide plans also offer international coverage. * Life: The government offers the largest group life insurance program in the world, covering employees, retirees and family members. (This option is covered in detail in Chapter Two.) * Flexible Spending Accounts: Eligible employees can choose to enroll in up to three different flexible spending accounts during “open season” (the period in which new applicants can submit their applications). * Long Term Care: Most federal and U.S. Postal Service employees and annuitants, active and retired members of the uniformed services, and their qualified relatives are eligible to apply for insurance coverage under the FLTCIP (Federal Long Term Care Insurance Program).
2 The Complete Guide to Federal Employee Benefits
As you can see, federal employees, retirees and/or survivors are entitled to a wide range of plans through the FEHB program. As an eligible individual, you can select from consumer-driven and high deductible offers, for example, that offer catastrophic risk protection, health savings/reimbursable accounts and lower premiums. More traditional plans are also available, and include Fee-for-Service (FFS) plans, Preferred Provider Organizations (PPO), and/or Health Maintenance Organizations (HMO). The latter are typically available to those eligible individuals who live (or sometimes work) within the area serviced by the plan. The government has set up a website where you can compare the costs, benefits and features of various plans. From the site http://www.opm.gov/insure/health/search/ plansearch.aspx, you can input in a few pieces of information and sit back while the system develops a list of the best options for your individual situation. A postal worker residing in the Tampa Bay area of Florida who receives biweekly paychecks, for example, would be eligible for either of the two funds outlined in the chart below. (This detailed information is available on the OPM website for a wide variety of plans and options.)
Aetna HealthFund -CDHPMost of Florida
APWU Health Plan -CDHP- Nationwide
Florida
Nationwide
Enrollment Code - Self
221
474
Enrollment Code - Self & Family
222
475
Carrier Code
22
47
CDP
FFS
1-877-459-6604
866-833-3463
Overall Plan Satisfaction
64.8%
62.5%
Getting Needed Care
84.2%
87.0%
Getting Care Quickly
83.8%
89.8%
How Well Doctors Communicate
93.5%
95.0%
Customer Service
85.4%
79.9%
Claims Processing
86.5%
78.1%
Shared Decision Making
53.2%
52.8%
Plan Information On Costs
53.8%
63.7%
Links to Survey Results
Adult
Adult
Plan Profile/Comparison General Information State
Plan Type Telephone Number Quality
Federal Employees Health Benefits Program (FEHB) 3
Aetna HealthFund -CDHPMost of Florida
APWU Health Plan -CDHP- Nationwide
Self
$28.17
$22.53
Family
$67.23
$50.69
Plan Profile/Comparison Rates (Postal Category 1, Biweekly)
Benefits
In-Network
Out-Network
In-Network
Out-Network
Catastrophic Limit Per Person
$3,000
$4,000
$3,000
$9,000
Catastrophic Limit Per Family
$6,000
$8,000
$4,500
$9,000
Calendar Year Deductible Per Person
$750
$750
$600
$600
Hospital Inpatient Per Admission Deductible/Copay
10%
40%
None
None
Hospital Inpatient Room & Board Charges
None
None
15%
40%+diff.
Doctor Outpatient Surgery
10%
40%
15%
40%+diff.
Primary Doctor Office Visits
10%
40%
15%
40%+diff.
CY Applies
CY Applies
None
None
Rx Generic Local Pharmacy
$10
40%+
25%
Not Covered
Rx Generic Mail Order
$20
N/A
25%
Not Covered
Rx Brand Local Pharmacy
$30
40%+
25%
N/A
Rx Brand Mail Order
$60
N/A
25%
N/A
90 days
N/A
90 days
90 days
Rx Deductible Per Person
Rx Mail Order --Supply Size Per Copay
To enroll in the FEHB, you can use the Health Benefits Election form (SF 2809) or use an agency self-service system such as employee Express, MyPay, Employee Personal Page or Employee Benefits Information System (EBIS). For more specific information, contact your agency’s Human Resources Office (HRO). Your SF 2809 can be processed by your HRO and Payroll Office, which, according to enrollment guidelines, will determine your effective date of coverage, complete the bottom portion of the form, make the appropriate payroll premium deductions and forward a copy to the Federal Employees Health Benefits plan you chose. The plan will process your health care information and send you a health care identification card. If you do not receive an ID card or need to check the status of your health care enrollment, contact the plan or your HRO. Once you are enrolled in the plan, you do not need to reenroll each year.
4 The Complete Guide to Federal Employee Benefits
Dental Insurance If you are a Federal or U.S. Postal Service employee, the Federal Employees Dental and Vision Insurance Program (FEDVIP) provide comprehensive dental insurance at competitive group rates. There are four nationwide dental plans and three regional dental plans from which to choose. Nationwide plans provide benefits for eligible employees, and for their families living overseas. Dental premiums are based on where you live. Premiums are paid on a pre-tax basis (premium conversion) if you are an active employee and your salary is sufficient to make the premium withholding. If you live inside the United States, your rates are determined based on where you live. This is called a “rating area.” To find your bi-weekly or monthly dental premium, you must first find your rating area online at: http://www.opm.gov/insure/dental/rates/FEDVIPRatingRegion.asp. Once you get to the website, you’ll want to:
1. Find your state and your corresponding zip code (first three digits). 2. Look under the plan name and locate the corresponding rating area. In keeping with the 34698 zip code example used earlier in this chapter, the postal employee’s rating code for dental coverage would be three. There are several provider options, but using Aetna PPO as an example, here’s what that employee can expect to pay out in premiums: Plan: High (In and Out of Network Benefits) Biweekly payment $15.75 (self) $31.51 (self + one) $47.26 (self + family)
Monthly payment $34.13 (self) $68.27 (self + one) $102.40 (self + family)
This is just one option. The government offers a wide range of plans to meet its employees’ needs and budgets. To enroll, visit BENEFEDS at www.BENEFEDS. com. If you don’t have access to a computer, you can enroll by phone at 1-877-888FEDS (3337), TTY 1-877-889-5680. You may check your dental enrollment on the website above, or by calling the toll-free number. When it comes to dental insurance, you do not have to reenroll every year. Your coverage continues unchanged, unless you make a change or cancel coverage during open season. However, there are limited Qualifying Life Events that permit changes outside of open season.
Federal Employees Health Benefits Program (FEHB) 5
Insurance It’s important to protect you and your family’s vision – a luxury that many Americans cannot afford because their basic health plans don’t offer this type of coverage. The Federal Employees Dental and Vision Insurance Program (FEDVIP) provide comprehensive vision insurance at competitive group rates. There are three vision plans to choose from. FEDVIP offers vision benefits to eligible individuals. The vision plans feature comprehensive eye examinations and coverage for lenses, frames and contact lenses. Other benefits such as discounts on LASIK surgery may also be available. There are no pre-existing condition limitations and no waiting periods for vision services. A vision insurance plan is much like a health insurance plan in that you may be required to meet a deductible and provide a co-pay or coinsurance payments for your vision services. With any plan choice, you should look at all the information and find a plan that will best fit your needs. You should also review your Federal Employees Health Benefits (FEHB) plan brochure to determine what vision coverage the FEHB plan provides. To get an idea of what you can expect to pay for your vision coverage, visit www. opm.gov/insure/vision/rates/index.asp. This site provides estimates and allows you to compare the various plans that are available side-by-side. Here’s an example: Provider: FEP Blue Vision Biweekly Premium
Monthly Premium
Standard Option
$3.92 (self) $4.92 (self + one) $11.76 (self + family)
$8.49 (self) $16.99 (self + one) $25.48 (self + family)
High Option:
$7.84 (self) $9.84 (self + one) $14.76 (self + family)
$10.66 (self) $21.32 (self + one) $31.98 (self + family)
To enroll in the government’s dental program, visit www.BENEFEDS.com. Those without access to a computer can call 1-877-888-FEDS (3337), TTY 1-877-889-5680. The website and phone number can also be used to check your vision enrollment status. Much like the dental program, you do not have to reenroll in your vision program every year. Your coverage continues unaffected, unless you make a change or cancel coverage during open season. However, there are limited Qualifying Life Events that permit changes outside of open season.
6 The Complete Guide to Federal Employee Benefits
Flexible Spending Accounts Flexible spending accounts have grown in popularity over the last few years as more consumers take on responsibility for their own health and wellbeing. Through the Federal Flexible Spending Account Program (FSAFEDS), you contribute money from your salary, before taxes are withheld, incur eligible expenses and get reimbursed. This is a fairly new concept for many employees, but one that goes a long way in helping employers and workers reduce premiums while at the same time increasing program flexibility. FSAs provide a way to save money on dependent care for your children and health care services and items for you and your family, and also lower your tax bill. There are three types of FSAFEDS accounts. Each type has a minimal annual election of $250 and a maximum annual election of $5,000. Here’s an overview of each:
* The Dependent Care Flexible Spending Account (DCFSA) will reimburse you for eligible dependent care expenses for your child(ren) under age 13 and/or for any person you claim as a dependent on your federal income tax return who is mentally or physically incapable of self-care. You (and your spouse, if married) must be working, looking for work (income must be earned during the year) or attending school fulltime to be eligible for a DCFSA. The $5,000 maximum annual election is the total combined amount for your household, including any child care subsidy amounts, in accordance with Internal Revenue Service (IRS) regulations. The maximum is $2,500 for those married filing separately. * The Health Care Flexible Spending Account (HCFSA) will reimburse you for eligible out-of-pocket health care expenses for you and your dependents which are not covered or reimbursed by the Federal Employees Health Benefits (FEHB) Program, the Federal Employees Dental and Vision Insurance Program (FEDVIP) or any other insurance. The $5,000 maximum annual election is in addition to any amount your spouse may have in a separate HCFSA, even if your spouse’s account is part of the FSAFEDS Program. It is not a household limit. * The Limited Expense HCFSA (LEX HCFSA) is for individuals who are enrolled in, or covered as a dependent by, a High Deductible Health Plan (HDHP) with a Health Savings Account (HAS). Eligible expenses are limited to dental and vision care expenses for you and your dependents, which are not covered or reimbursed by FEHBP or FEDVIP coverage or any other insurance. Using a LEX HCFSA allows you to preserve the funds in your HSA to use or save for other purposes. Eligible expenses associated with your pre-existing condition are covered. There is no waiting period.
Federal Employees Health Benefits Program (FEHB) 7
There is no cost for federal employees who wish to enroll in any of these three options; your agency pays the administrative fees on your behalf. As an employee, you decide how much you want to set aside from your salary each year. The minimum is $250 and the maximum is $5,000 for each type of FSA. Go to www.FSAFEDS.com and refer to “Savings Calculator” for additional information. The amount that you decide on – your annual election – will be deducted from your salary in equal allotments spread across the number of pay dates remaining in the calendar year. To enroll in an FSA, go to www.fsafeds.come and click on the “enrollment” button. You can check on your enrollment by visiting the site and clicking on My Account Summary or by calling an FSAFEDS Benefits Counselor toll-free, at 1-877FSAFEDS (372-3337), TTY: 1-800-952-0450, Monday through Friday, 9:00 a.m., until 9:00 p.m., Eastern Time. If you are interested in continuing your participation in FSAFEDS, you must reenroll each year during the annual open season. Enrollments do not carry forward automatically from year to year.
Continuation of Coverage You may be wondering what happens to your health coverage when you are no longer an active federal employee. Here’s the answer: when you retire, you are eligible to continue FEHB coverage if you meet all of the following requirements:
* You are entitled to retire on an immediate annuity under a retirement system for civilian employees (including FERS MRA + 10 retirements); and * You have been continuously enrolled (or covered as a family member) in any FEHB plan(s) for the 5 years of service immediately before the date your annuity starts, or for the full period(s) of service since your first opportunity to enroll (if less than 5 years). Note that coverage under Medicare does not count in determining continuous coverage, and that service as a non-appropriated fund employee does not count in determining continuous coverage (since it is not federal service and not subject to FEHB coverage). Breaks in service are not counted as interruptions when the five years of service requirement is determined, as long as you reenroll within 60 days after your return to Federal service. For example:
8 The Complete Guide to Federal Employee Benefits
Lisa elected FEHB coverage on February 11, 1990, and had a break in service from January 1, 1994 through January 1, 1996. Upon her return to service, she again elected to enroll. She retires on December 31, 1997. She is eligible to continue her health benefits coverage into retirement, since she has been continuously enrolled for the five years of service prior to retirement. At retirement, your employing office will tentatively determine if you are eligible to continue your enrollment. OPM’s Office of Retirement Programs (or your retirement system) will review your retirement and health benefits documents and make a final determination of your eligibility to continue your FEHB enrollment into retirement.
Your Next Step Visit OPM’s website www.opm.gov/insure/health to learn the particulars of your eligibility and exactly which health, dental, vision and FSA plans are available to federal employees in your region. In the next chapter we’ll walk you through the process of obtaining life insurance coverage through FEGLI, the Federal Employees Group Life Insurance program.
“I worked for the Post Office for over 25 years and never had anyone go over my benefits or pension options. Not only did Government Benefit Advisors help me stop paying for benefits I didn’t need, but they also helped me with my one-time inservice TSP rollover. That move increased my retirement income by thousands of dollars.” – Thomas G., Hammond, Ind.
CHAPTER TWO Federal Employees Group Life Insurance (FEGLI)
T
he Federal Employees’ Group Life Insurance (FEGLI) Program covers over 4 million federal employees and retirees, as well as many their family members. This is an extremely important benefit for all workers who want the peace of mind in knowing that their dependents, spouses and affairs will be taken care of upon their passing. FEGLI’s group term life insurance comprises basic life insurance coverage and three types of optional insurance. Here are the details: Basic: In most cases, when you were a new employee you were automatically covered by Basic life insurance and your payroll office deducted premiums from your paycheck unless you waived the coverage. Optional: There are three types of optional insurance. You must have basic insurance in order to elect any of the options. Unlike basic, enrollment in optional insurance is not automatic; you must take action to elect the options. If you didn’t elect optional coverage as a new employee, your opportunities to do so later are limited: during an open season, by providing medical information, or by experiencing a life event. Here are the three types of optional insurance:
* Option A—(Standard Optional Insurance) Federal employees covered under the Basic life insurance program have the option of purchasing an additional $10,000 worth of FEGLI life insurance. The employee pays the full cost of this “standard optional insurance” coverage. The amount of the premium depends on the employee’s age and is withheld from the worker’s salary. For covered employees (not retirees), selection of the Option A life insurance coverage also results in an equal amount of accidental death and dismemberment protection. Retirees who reach age 65 no longer have to pay premiums, but the $10,000 optional insurance starts to decline at this point at the rate of two percent for each full calendar month until it reaches $2,500, or one-fourth of the face value.
10 The Complete Guide to Federal Employee Benefits
* Option B—(Additional Optional Insurance) Federal employees who are insured for the Basic coverage may elect “additional optional insurance” in an amount equal to one, two, three, four, or five times their actual rate of annual basic pay (rounded to the next $1,000). The employee pays the full cost of the additional optional insurance. The premium depends on the employee’s age and is withheld from salary. Accidental death and dismemberment coverage is not included in this coverage. Retirees at age 65 no longer have to pay premiums for additional optional insurance, but the amount of their coverage starts to decrease at this point at the rate of two percent each month for 50 months, at which point coverage ceases. However, a retiree may elect to keep the full amount of the additional optional insurance in force and continue to pay the full premium. Such an election may be cancelled at a later date. * Option C—(Family Optional Insurance) Federal employees insured for the Basic insurance coverage may elect family optional insurance to cover eligible family members. Eligible family members are an employee’s spouse and unmarried dependent children under age 22. The coverage amount is an amount equal to up to five multiples of $5,000 for a spouse and up to five multiples of $2,500 for each eligible child. The employee pays the full cost of the family optional insurance. The premium depends on the employee’s age and is withheld from the worker’s salary. Accidental death and dismemberment coverage is not included in this coverage. Retirees at age 65 no longer have to pay premiums for family optional insurance, but their coverage amount starts to decrease at this point at the rate of two percent each month for 50 months, at which point coverage ceases. However, a retiree may elect to keep the full amount of the family optional insurance in force and continue to pay the full premium. Such an election may be cancelled at a later date. The Federal Government pays one-third of the cost of basic insurance, and the employee shares costs $0.15 cents per $1,000 worth of coverage (note that basic is free for Postal employees). Your age does not affect the cost of basic insurance, and there is no additional cost for the extra benefit for those under age 45. There is no extra cost for Accidental Death and Dismemberment (AD&D) coverage. The premium for basic insurance does not change on a regular basis. The OPM reviews the premiums periodically and will announce premium changes prior to their effective date. Premium changes are published in a Federal Register notice and are also sent to agencies and retirement systems. The premiums are also updated on the FEGLI website.
Federal Employees Group Life Insurance (FEGLI) 11
As a federal employee, you pay 100 percent of the cost of optional insurance. The premiums for the three optional insurance coverages are based on your age and also on the number of Option B and/or Option C multiples (up to five) you elect. Unlike other insurance options available to you as a federal employee, you do not choose from a selection of plans in the FEGLI program, as there is only one such program. You can, however, pick the amount and types of life insurance coverage you wish to have. The amount of basic life insurance provided under FEGLI begins to decrease once an individual retires or reaches age 65, whichever comes later. The rate of decrease is two percent per month, until 25 percent of the amount you had at the time of retirement is reached. However, FEGLI-covered employees are given an opportunity at the time of retirement to elect either a lower rate of reduction or no coverage reduction after attaining age 65 in exchange for their agreement to make additional premium payments. Accidental death and dismemberment coverage is not available to retirees. The amount of basic life insurance available to each eligible employee under age 45 was increased commencing with the first pay period beginning on or after October 1, 1981, at no additional cost to the employee. The increase is graduated according to the employee’s age. Employees under age 36 are eligible for basic insurance coverage in an amount equal to their annual salary rounded to the next higher thousand dollars, plus $2,000, multiplied by two. For employees in this under-36 category, a worker’s FEGLI premium cost remains the same. Beginning at age 36, the multiplication factor for the amount of Basic insurance will decline by 0.1 each year, until it reaches 1.0 for employees age 45 and over. For example, if the employee’s age is 34, then the appropriate factor is 2.0. To enroll in the FEGLI program, complete form SF 2817 “Life Insurance Election” and submit it to you agency’s Human Resources Office. (Some agencies allow electronic enrollment. Check with your Human Resources Office to see whether this is available to you). Coverage for optional insurance is effective the first day you are in a pay and duty status after you submit the election to your Human Resources Office. It is important for you to check your Leave and Earnings Statement (pay stub) afterwards to see if your election has been processed. If you think you should have coverage but don’t see it yet, contact your Human Resources Office. With FEGLI, no individual “policy” is issued. Your copy of the SF 2817 “Life Insurance Election,” and the FEGLI Program Booklet is your certificate of proof of insurance. In addition, you do not have to reenroll every year. Your coverage continues automatically each year unless you change it.
12 The Complete Guide to Federal Employee Benefits
Your Next Step Boot up your computer and visit the new/prospective employee page of the FEGLI website at http://www.opm.gov/insure/new_employ/index.asp?ProgramId=4 (existing employees and retirees can access their respective pages by clicking on the appropriate link on the right side of the page). In the next chapter you’ll learn about the Federal Employees Retirement System (FERS) and get insights and tips on how to prepare now for your post-work life.
“If you think nobody cares if you’re alive, try missing a couple of car payments.” --Earl Wilson
CHAPTER THREE Federal Employees Retirement System (FERS)
A
s we pointed out in the first chapter of this book, Americans are woefully unprepared for retirement. The good news for you is that all federal and postal employees hired after January 1, 1984 (or CSRS-covered employees that opted for FERS coverage in one of the open seasons in 1987 or 1998) are eligible for the government’s retirement program. Congress created FERS in 1986, and it became effective on January 1, 1987. Since that time, new Federal civilian employees who have retirement coverage are covered by FERS. FERS is a retirement plan that provides benefits from three different sources: a Basic Benefit Plan, Social Security (covered in Chapter Seven of this book) and the Thrift Savings Plan (TSP) (covered in Chapter Six). Two of the three parts of FERS (Social Security and the TSP) can go with you to your next job if you leave the Federal Government before retirement. This portability provides peace of mind for those of you who don’t put all of your work years into a government job, but who want to retain some or all of the benefits that job afforded you.
The Basic Benefit and Social Security parts of FERS require you to pay your share each pay period. Your agency withholds the cost of the Basic Benefit and Social Security from your pay as payroll deductions. Your agency pays its part too. Then, after you retire, you receive annuity disbursements each month for the rest of your life. FERS’ Thrift Savings Plan component is an account that your agency automatically sets up for you. Each pay period your agency deposits into your account an amount equal to 1 percent of the basic pay you earn for the pay period. You can also make your own contributions to your TSP account and your agency will also make a matching contribution. These contributions are taxdeferred. The Thrift Savings Plan is administered by the Federal Retirement Thrift Investment Board, and is covered in more depth in a later chapter. The four categories of benefits in the FERS Basic Benefit Plan are: Immediate, Early, Deferred, and Disability. Eligibility is determined by your age and number of years of creditable service. In some cases, you must have reached the Minimum Retirement Age (MRA) to receive retirement benefits. Use the following chart to figure your Minimum Retirement Age.
14 The Complete Guide to Federal Employee Benefits
If you were born
Your MRA is
Before 1948
55
In 1948
55 and 2 months
In 1949
55 and 4 months
In 1950
55 and 6 months
In 1951
55 and 8 months
In 1952
55 and 10 months
In 1953-1964
56
In 1965
56 and 2 months
In 1966
56 and 4 months
In 1967
56 and 6 months
In 1968
56 and 8 mo
In 1969
56 and 10 month
In 1970 and after
57
Immediate Retirement: An immediate retirement benefit is one that starts within 30 days from the date you stop working. If you meet one of the following sets of age and service requirements, you are entitled to an immediate retirement benefit: Age
Years of Service
62
5
60
20
MRA
30
MRA
10
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.
Early Retirement: The early retirement benefit is available in certain involuntary separation cases and in cases of voluntary separations during a major reorganization or reduction in force. To be eligible, you must meet the following requirements: Age
Years of Service
50
20
Any Age
25
Federal Employees Retirement System (FERS) 15
Deferred Retirement: Refers to delayed payment of benefit until criteria are met, as follows: If you leave Federal service before you meet the age and service requirements for an immediate retirement benefit, you may be eligible for deferred retirement benefits. To be eligible, you must have completed at least 5 years of creditable civilian service. You may receive benefits when you reach one of the following ages: Age
Years of Service
62
5
MRA
30
MRA
10
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.
Disability Retirement Disability Federal Employees Retirement System (FERS) Annuity Requirements Age Any Age
Years of Service 18 months
To be eligible for disability, you must have become disabled, while employed in a position subject to FERS, because of a disease or injury, for useful and efficient service in your current position. The disability must be expected to last at least one year. Your agency must certify that it is unable to accommodate your disabling medical condition in your present position and that it has considered you for any vacant position in the same agency at the same grade/pay level, within the same commuting area, for which you are qualified for reassignment. To compute your retirement benefits, your basic annuity is based on your length of service and “high-3” average salary. To determine your length of service for computation, add all your periods of creditable service, and then eliminate any fractional part of a month from the total.
16 The Complete Guide to Federal Employee Benefits
High-3 Average Salary Your “high-3” average pay is the highest average basic pay you earned during any three consecutive years of service. These three years are usually your final three years of service, but can be an earlier period, if your basic pay was higher during that period. Your basic pay is the basic salary you earn for your position. It includes increases to your salary for which retirement deductions are withheld, such as shift rates. It does not include payments for overtime, bonuses, etc. (If your total service was less than three years, your average salary was figured by averaging your basic pay during all of your periods of creditable Federal service.)
Computation for Non-Disability Retirements Here is how the basic FERS annuity formula is calculated: FERS Basic Annuity Formula Under Age 62 at Separation for Retirement Or Age 62 or Older With Less Than 20 Years of Service
1 percent of your high-3 average salary for each year of service
Age 62 or Older at Separation With 20 or More Years of Service
1.1 percent of your high-3 average salary for each year of service
Your benefit will be computed differently if you retired under one of the provisions below: Special Provision for Air Traffic Controllers, Firefighters, Law Enforcement Officers, Capitol Police, Supreme Court Police or Nuclear Materials Couriers 1.7% of your high-3 average salary multiplied by your years of service which do not exceed 20, plus 1% of your high-3 average salary multiplied by your service exceeding 20 years Member of Congress or Congressional Employee (or any combination of the two). Must have at least 5 years of service as Member of Congress and/or Congressional Employee 1.7% of your high-3 average salary multiplied by your years of service as a Member of Congress or Congressional Employee which do not exceed 20, plus 1% of your high-3 average salary multiplied by your years of other service
Transferred to the Federal Employees At time of transfer, you had at least five years of creditable civilian service covered by either:
Federal Employees Retirement System (FERS) 17
At time of transfer, you had at least five years of creditable civilian service covered by either:
* Civil Service Retirement System (CSRS) * Social Security (but not both – a situation that excludes service during which partial CSRS deductions were withheld) Annuity will have 2 components:
* FERS Component * CSRS Component Computation of FERS Component Under Age 62 at Separation for Retirement Or Age 62 or Older With Less Than 20 Years of Service
1 percent of your high-3 average salary for each year of service
Age 62 or Older at Separation With 20 or More Years of Service
1.1 percent of your high-3 average salary for each year of service
Computation of CSRS Component (For retirements under the special provision for firefighters, law enforcement officers, nuclear materials couriers, Members of Congress or Congressional employees, see below) First 5 years of CSRS service
1.5% of your high-3 average salary for each year of service
Second 5 years of CSRS service
1.75% of your high-3 average salary for each year of service
All years of CSRS service over 10
2% of your high-3 average salary for each year of service
Computation of CSRS Component If retired under the special provision for firefighters, law enforcement officers or nuclear material couriers % of your high-3 average salary, multiplied by up to 20 years of CSRS law enforcement officer, firefighter or nuclear material courier service, plus 2% of your high-3 average salary multiplied by all remaining service in the CSRS component Computation of CSRS Component If retired under the special provision for Members of Congress or Congressional Employees 2.5% of your high-3 average salary multiplied by your years and months of service as a Member of Congress and/or Congressional Employee, your military service while on a leave of absence as a Member and up to 5 years of other military service, plus 1.75% of your high-3 average salary multiplied by your years of other service, which when added to your years of 2.5% service, do not exceed 10 years, plus 2% of your high-3 average salary multiplied by your years of other service in excess of 10 years
FERS Disability Computation if* Age 62 or older at retirement, or * Meet the age and service requirements for immediate voluntary retirement
18 The Complete Guide to Federal Employee Benefits
You receive your “earned” annuity based on the general FERS annuity computation, as follows— If age 62 or older at retirement with less than 20 years of service, or under age 62 qualified for an immediate voluntary retirement
1 percent of your high-3 average salary for each year of service
If age 62 or older with 20 or more years of service
1.1 percent of your high-3 average salary for each year of service
FERS Disability Computation if* Under age 62 at retirement, and * Not eligible for voluntary immediate retirement For the first 12 months
60% of your high-3 average salary minus 100% of your Social security benefit for any month in which you are entitled to Social Security benefits However, you are entitled to your “earned” annuity, if it is larger than this amount.
After the first 12 months
40% of your high-3 average salary minus 60% of your Social Security benefit for any month in which you are entitled to Social Security disability benefits However, you are entitled to your “earned” annuity, if it is larger than this amount.
When you reach age 62 Your annuity will be recomputed using an amount that essentially represents the annuity you would have received if you had continued working until the day before your 62nd birthday and then retired under FERS.
If your actual service, plus the credit for time as a disability annuitant equals less than 20 years: 1 percent of your high-3 average salary for each year of service If your actual service, plus the credit for time as a disability annuitant equals 20 or more years: 1.1 percent of your high-3 average salary for each year of service Total Service used in the computation will be increased by the amount of time you have received a disability annuity Average Salary used in the computation will be increased by all FERS cost-of-living increases paid during the time you received a disability annuity.
Cost of Living Adjustments Your annuity will be increased for cost-of-living adjustments, if:
* You are over age 62; or * You retired under the special provision for air traffic controllers, law enforcement personnel or firefighters; or * You retired on disability, except when you are receiving a disability annuity based on 60% of your high-3 average salary. This is generally during the first year of receiving disability benefits; or * Your retirement includes a portion computed under Civil Service Retirement System (CSRS) rules.
Federal Employees Retirement System (FERS) 19
FERS retirees under age 62 who do not fall into one of the categories above, are not eligible for cost-of-living increases until they reach age 62. If you’ve been receiving retirement benefits for less than one year and are eligible for a cost-of-living adjustment, you’ll get a percentage of the cost-of-living increase. The percentage depends on how long you were receiving your annuity before the effective date of the increase.
Age and Service Requirements for Voluntary Retirement Eligibility is based on your age and the number of years of creditable service and any other special requirements. If you meet one of the following sets of requirements, you may be eligible for a voluntary immediate retirement benefit. An immediate annuity is one that begins within 30 days after your separation. Type of Retirement
Voluntary (Optional)
Minimum Age
Minimum Service
62
5
None
60
20
None
MRA*
30
None
MRA*
10
None (Note: Annuity is reduced by 5% for each year the employee is under age 62.)
Any age
25
50
20
Any age
25
50
20
*Determine Your MRA
Special Requirements
You must retire under special provisions for air traffic controllers, law enforcement or firefighter personnel. OPM must have determined that your agency is undergoing a major reorganization, reduction-in-force or transfer of function.
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If your year of birth is…
Your Minimum Retirement Age is…
Before 1948
55 years
1948
55 years, 2 months
1949
55 years, 4 months
1950
55 years, 6 months
1951
55 years, 8 months
1952
55 years, 10 months
1953 to 1964
56 years
1965
56 years, 2 months
1966
56 years, 4 months
1967
56 years, 6 months
1968
56 years, 8 months
1969
56 years, 10 months
After 1969
57 years
MRA (Minimum Retirement Age) + 10 Retirement Age Reduction If you have 10 or more years of service and are retiring at the Minimum Retirement Age, your annuity will be reduced for each month that you are under age 62. The reduction is 5 percent per year (5/12 of a percent per month). However, your annuity will not be reduced if you completed at least 30 years of service, or if you completed at least 20 years of service and your annuity begins when you reach age 60. You can reduce or eliminate this age reduction by postponing the beginning date of your annuity. But what happens if you leave your Government job before becoming eligible for retirement? If this occurs, here are you options:
* You can ask that your retirement contributions be returned to you in a lump sum payment, or * You can wait until you are retirement age to apply for monthly retirement benefit payments. This is called a deferred retirement.
Federal Employees Retirement System (FERS) 21
Payment of a refund of your FERS deductions will permanently eliminate your retirement rights for the period of service that the refund covers. You will not be permitted to pay the money back, even if you are later reemployed in the government. The refunded FERS service cannot be used in computing annuity benefits that you may later become entitled to receive under FERS and it cannot be used in determining the length of service for future annuity eligibility purposes.
Your Next Step Download the appropriate Civil Service Retirement System (CSRS) Publications and/or Federal Employees Retirement System (FERS) from www.opm.gov/retire/ pubs/pamphlets/index.asp. In the next chapter we’ll look more closely at civil service retirement and how to navigate that aspect of the retirement system for federal employees.
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“I was paying $125 per pay period for a benefit that I didn’t even need, and that I’d forgotten about. Government Benefit Advisors was able to stop the deduction from being taken from my check, and increase my net pay by over $300 per pay period! I was very happy, to say the least.” – Barbara K., Chicago.
CHAPTER Four Civil Service Retirement
W
hen the Civil Service Retirement Act went into effect in 1920, it established a retirement system for certain federal employees. It was later replaced by the Federal Employees Retirement System (FERS) (for federal employees who first entered covered service on and after January 1, 1987), but still applies to a large number of current and retired workers. The Civil Service Retirement System (CSRS) is a defined benefit, contributory retirement system. Employees share in the expense of the annuities to which they become entitled. CSRS covered employees contribute 7, 7 1/2 or 8 percent of pay to CSRS and, while they generally pay no Social Security retirement, survivor and disability (OASDI) tax, they must pay the Medicare tax (currently 1.45 percent of pay). The employing agency matches the employee’s CSRS contributions. CSRS employees may increase their earned annuity by contributing up to 10 percent of the basic pay for their creditable service to a voluntary contribution account. Employees may also contribute a portion of pay to the Thrift Savings Plan (TSP) (covered in detail in Chapter Seven of this book). There is no government contribution, but the employee contributions are taxdeferred. Eligibility is based on your age and the number of years of creditable service and any other special requirements. You must also have served in a position subject to CSRS coverage for one of the last two years before your retirement. There are five categories of benefits under the Civil Service Retirement System (CSRS). They are: optional, special optional, early optional, discontinued service and disability. Here’s a detailed look at each:
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Optional and Special Optional If you leave federal service before you meet the age and service requirements for an immediate retirement benefit, you may be eligible for deferred retirement benefits. To be eligible, you must have at least five years of creditable civilian service and be age 62. Here are the requirements for optional and special optional:
Optional Age
Special Optional
Years of Service
Age
Years of Service
62
5
50
20
60
20
Any Age
25
55
30
Early Optional You must retire under special provisions for air traffic controllers or law enforcement and fire fighter personnel. Air traffic controllers can also retire at any age with 25 years of service as an air traffic controller. Early Optional Age
Years of Service
50
20
Any Age
25
Discontinued Service Your agency must be undergoing a major reorganization, reduction-in-force or transfer of function determined by the Office of Personnel Management. Your annuity is reduced if you are under age 55. Discontinued Service Age
Years of Service
50
20
Any Age
25
Civil Service Retirement 25
Disability Your separation is involuntary and not a removal for misconduct or delinquency. Disability Age Any Age
Years of Service 5
You must be disabled for useful and efficient service in your current position and any other vacant position at the same grade or pay level within your commuting area and current agency for which you are qualified. The disability must have onset prior to retirement and should be expected to last for at least one year.
Doing the Math With CSRS, your basic annuity is computed based on your length of service and “high-3” average salary. You also receive credit for unused sick leave if you retire on an immediate annuity. To determine your length of service for computation, use the following calculation:
* Add all your periods of creditable service * Include the period represented by your unused sick leave * Eliminate any fractional part of a month from the total * The resultant number will be your length of service Your “high-3” average pay is the highest average basic pay you earned during any three consecutive years of service. These three years are usually your final three years of service, but can be an earlier period, if your basic pay was higher during that period. Your basic pay is the basic salary you earn for your position. It includes increases to your salary for which retirement deductions are withheld, such as shift rates. It does not include payments for overtime, bonuses, etc. Here is how the CSRS annuity formula is calculated:
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CSRS Annuity Formula Years of Service
What You Receive
First 5 years of service
1.5 percent of your high-3 average salary for each year
Second 5 years of service
Plus 1.75 percent of your high-3 average salary for each year
For all years of service over 10
Plus 2 percent of your high-3 average salary for each year.
Your annuity will be reduced if:
* You retire before age 55 (unless you retire for disability or under the special provisions for law enforcement officers, air traffic controllers and firefighters); * Your annuity will be reduced by one-sixth of 1 percent for each full month you are under age 55. * You didn’t make a deposit for service performed prior to October 1, 1982, during which no deductions were taken from your pay (non-deduction service after that date is not used in the computation of benefits if the deposit is not paid); * You didn’t make a redeposit of a refund for a period of service that ended before October 1, 1990; * You provide for a survivor. To provide a full survivor benefit for your current or former spouse, your annuity will be reduced by 2.5 percent of the first $3,600, plus 10 percent of the annuity over $3,600. To provide a survivor annuity for a person who has an “insurable interest” in you, your annuity would be reduced from 10 to 40 percent, depending on the difference in your age and the age of the person named. There are other factors that affect your annuity. For example, it will be increased periodically by cost-of-living increases that occur after your retire. Your initial costof-living increase will be prorated based on how long you have been retired when that cost-of-living increase is granted. It’s important to note (particularly for those employees who have 41+ years of service upon retirement) that the maximum benefit you can receive from CSRS is 80 percent of your high-3 average salary, plus credit for your sick leave. The CSRS annuity formula is slightly different for law enforcement officers, fire fighters and nuclear materials couriers:
Civil Service Retirement 27
CSRS Annuity Formula If retired under the special provision for firefighters, law enforcement officers or nuclear material couriers Years of Service
What You Receive
First 20 years of CSRS law enforcement officer, firefighter and/or nuclear material courier service
2.5% of your high-3 average salary for each year
All remaining CSRS service
Plus 2% of your high-3 average salary for each year
Disability Retirement Computation If you retire for disability, you may be guaranteed a minimum annuity equal to the smaller of:
* 40 percent of your “high-3 average salary,” or * the regular annuity obtained after increasing your service by the time between your retirement and your 60th birthday. The guaranteed minimum applies if you are under age 60 when you retire and your earned annuity based on your actual service is less than this minimum. There is an exception to this rule: the guaranteed minimum does not apply if you are receiving military retired pay and/or compensation from the Veterans Administration in lieu of all or part of the military retired pay. However, if your earned annuity plus your military benefit (or compensation) is less than what it would have been under the guaranteed minimum, the annuity is increased to bring it up to that level.
Voluntary Retirement If you opt for voluntary retirement, eligibility in CSRS is based on your age and the number of years of creditable service and any other special requirements. In addition, you must have served in a position subject to CSRS coverage for one of the last two years before your retirement. If you meet one of the following sets of requirements, you may be eligible for a voluntary immediate retirement benefit. An immediate annuity is one that begins within 30 days after your separation.
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Type of Retirement
Voluntary (Optional)
Minimum Age
Minimum Service
62
5
Subject to CSRS coverage for one of the last two years before your retirement
60
20
Subject to CSRS coverage for one of the last two years before your retirement
55
30
Subject to CSRS coverage for one of the last two years before your retirement
50
20
Any Age
25
You must retire under special provisions for air traffic controllers or law enforcement and firefighter personnel. Air traffic controllers can also retire at any age with 25 years of service as an air traffic controller. Subject to CSRS coverage for one of the last two years before your retirement
50
20
Any Age
25
Special Requirements
Your agency must be undergoing a major reorganization, reduction-in-force or transfer of function determined by the Office of Personnel Management. Your annuity is reduced if you are under age 55. Subject to CSRS coverage for one of the last two years before your retirement
Your agency will guide you through the retirement process, supplying all of the information you need about retirement and insurance. The government advises employees to start planning for retirement five years prior to their termination date, namely because you must have insurance coverage for five years immediately before retirement to keep it after retirement.
Your Next Step Regardless of how many years you have until retirement, you should review your Official Personnel Folder (OPF) to make sure that there is verification of all of your military and civilian service. If any of the records are missing, your employer should help you document the service and obtain any missing records. It’s time to turn the page and learn everything you need to know about the government’s military buyback plan.
“I met with Government Benefit Advisors for a Personal Benefit Analysis. They picked up on the fact that even though my wife had passed on, I was still paying for her insurance. Not only was I able to stop paying for a benefit that I no longer needed, but I also found out that I never received payment for my wife’s death claim. That’s $10,000 that I wouldn’t have, had I not met with Government Benefit Advisors.” – Jimmy K., Austin, Texas.
CHAPTER Five Buying Back Military Time
I
f you ever served in the military, then you may be able to make military service credit payments for creditable military service to prevent your annuity from decreasing when you reach 62 years of age. If you served on active duty and will be eligible at age 62 to collect Social Security, your CSRS annuity will be reduced by the number of years that you served unless you buy back that time. For example: if you served in the armed services for 5 years, when you reach age 62 your CSRS annuity will be reduced by 10 percent. You can buy back your military time to avoid this reduction and collect your entire annuity and whatever Social Security benefits that you are entitled to. Here are the two different scenarios you’ll want to consider, based on when you served:
* Military Service before 12/31/1956: If your active duty military service is prior to December 31, 1956, you receive full credit for your military service in determining both your retirement eligibility and your annuity computation, without making a deposit for the service.
* Military Service after 1/1/1957: If your military service is after January 1, 1957, credit for the military service depends on the date on which you were first employed as a federal civilian employee:
Civilian hire date on or after October 1, 1982 - You must make a deposit to receive credit for the military service. Civilian hire date before October 1, 1982 – Your military service will automatically be credited for retirement eligibility, but not necessarily for the annuity. You must next determine if you will be eligible to receive Social Security at age 62. If you will not be eligible for Social Security at age 62, then no deposit is required for the military service to be included in your retirement annuity.
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If you will be eligible to collect Social Security at age 62, you must either make a military deposit or your CSRS annuity (and/or spousal annuity) will be reduced to exclude your military service at age 62. This is often referred to as “Catch 62.” The reduction to your CSRS annuity is 2 percent for each year of military service. For example, if you have 4 years of military service, when you reach age 62 your CSRS annuity will be reduced by 8 percent. If you made your military deposit, there will not be a reduction in your CSRS annuity at age 62, you continue to collect your full CSRS annuity and your entitlement to Social Security benefits.
Amount of the Deposit For CSRS employees, the military deposit equals 7 percent of military base pay, plus interest. There is a 2-year interest-free grace period on all military deposits. After the 2-year grace period interest is accrued and compounded annually. The interest rate is an annual variable rate. The first possible interest accrual date is 10-1-1986. It’s important to note that military deposits must be made before you retire. Contact your agency Human Resource department and arrange to pay back your military time. Complete form SF-3108 or SF-2803 to get the process rolling. You can make payments through payroll deduction or pay a lump sum if you desire.
Doing the Math An easy way to determine if it makes sense to make your military deposit is to obtain retirement estimates with and without the military service. However, if you are a new federal employee retirement estimates may be difficult to obtain. Large personnel centers are often too busy to calculate projections. Luckily, the retirement calculation for a FERS employee is simple enough:
1. Determine how much additional you would receive by making the military deposit: Multiply your years of military service X 1% x your projected high three when you retire. Or use 1.1% if you are waiting until age 62 to retire. Example: If you had 20 years military service and you thought your average pay for your final 3 years of civilian service might be $80,000: 20 years military service x 1% x $80k = $16,000
Buying Back Military Time 31
2. For more information on the annuity calculation go to the FERS Annuity page online at: http://federalretirement.net/annuity.htm. Determine if the amount you would receive in the FERS calculation (above) is more than the amount you are projected to receive in your military retirement, because you would have to waive your retired military pay to receive credit in the civilian retirement. 3. If the military pay is higher - do not combine the service or make the deposit. If your FERS annuity amount is higher than your military retirement annuity, the next step is to determine how much the military deposit will cost. In accordance with Public Law 97-253, employees covered under the Federal Employee’s Retirement System (FERS) will receive credit for their Post-56 military service if a deposit is made under FERS. For FERS employees, the deposit is 3 percent of basic military pay. An interest-free grace period will extend for three years after the date of the career appointment. At the end of the 3-year grace period, interest will accrue on the unpaid balance. All military service must be honorable in order to complete a buy back.
Your Next Step You can figure out your military buyback credits by using the free online calculator provided by FedCalc at www.fedcalc.com. If you are approaching retirement, and you bought back your military time, confirm that your payroll statement of earnings and leave lists that payback amount on your biweekly statements. In the next chapter we’ll walk you through the intricacies of the Thrift Savings Plan, and show you why it’s an important component of many federal employees’ retirement plans.
32 The Complete Guide to Federal Employee Benefits
“I had no idea what my pension was going to be when I retired. Government Benefit Advisors explained the situation and helped me arrange my benefits in a way that would allow me to retire on time. The services they provided were invaluable.” – Harold C., North Carolina.
CHAPTER Six Thrift Savings Plan
T
he Thrift Savings Plan (TSP) is another retirement savings and investment plan for federal employees. Designed to provide retirement income, the TSP offers federal employees the same type of savings and tax benefits that many private corporations offer their employees under “401(k)” plans. Within the civilian component of the TSP, employees covered by the Federal Employees’ Retirement System (FERS) and the Civil Service Retirement System (CSRS) can contribute to the TSP. (The participation rules are different for FERS and CSRS employees.) Participating in the TSP does not affect the amount of your Social Security benefit or your FERS Basic Annuity. The money that you save and earn through your TSP account will provide retirement income, and is particularly important to FERS employees because the formula used to compute your FERS Basic Annuity is less generous than the formula used to compute the CSRS annuity. Here are two important points about the TSP:
1. As a FERS employee, you may elect to contribute any dollar amount or percentage (1 to 100) of your basic pay to the Thrift Savings Plan. 2. However, your annual dollar total cannot exceed the Internal Revenue Code limit, which is $16,500 for 2010. Once you are eligible as a FERS employee, you are entitled to receive agency contributions. Your agency makes two different types of contributions to your TSP account as part of your FERS benefits. These contributions are not taken out of your pay, nor do they increase your pay for income tax or Social Security purposes. There are two different types of contributions. Here are the details on each:
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* Agency Automatic 1% Contributions: When you become eligible for agency contributions, your agency will automatically contribute to your TSP account an amount equal to 1 percent of your basic pay each pay period. These are your agency automatic (1%) Contributions. You will receive these contributions whether or not you contribute your own money to your TSP account.
* Agency Matching Contributions: If you are contributing to your TSP account, your agency will also make matching contributions once you are eligible for them. If you do not contribute your own money, you will not receive these agency-matching contributions. Matching contributions apply to the first five percent of pay that you contribute each pay period. Your contributions are matched dollar-for-dollar on the first three percent of pay you contribute each pay period and 50 cents on the dollar for the next two percent of pay. Your agency will not match the contributions that you make above five percent of your pay. However, you will still benefit from before-tax savings and tax-deferred earnings on those contributions. The fact that your agency adds to your contributions will make your TSP account grow faster. Your Agency Automatic (1%) and Matching Contributions can add up to five percent of your basic pay.
Deciphering the Annuity Annuities are confusing for most investors, which is why we’ve devoted a section to helping you better understand them, and the role they play in your retirement package. A Thrift Savings Plan (TSP) annuity provides monthly payments for as long as you are alive. If you elect an annuity with survivor benefits, it will provide payments as long as you (or your joint annuitant) are alive. A TSP annuity is one of your options for withdrawing your TSP account after you separate from federal service. If you want a guaranteed stream of payments for as long as you (or your joint annuitant) are alive, an annuity may be the right choice. You can use your entire account balance to purchase a TSP annuity, or you can use a portion of your account balance to purchase an annuity and choose a different withdrawal option or options to withdraw the rest. The factors that affect the amount of your monthly annuity payments include:
* The annuity option you choose * Your age when your annuity is purchased (and the age of your spouse or other joint annuitant if you choose a joint annuity)
Thrift Savings Plan 35
* The amount used to purchase your annuity * The interest rate index when your annuity is purchased If you choose a TSP annuity, the balance in the account to which your annuity request applies must be at least $3,500 at the time your annuity is purchased. If you are using only a portion of your account for an annuity, the percentage you choose when requesting your withdrawal must equal $3,500 or more of your vested account balance. As a CSRS or FERS federal employee, you can invest any portion of your account in any of the Thrift Savings Plan investment funds:
* G Fund (Government Securities Investment) * F Fund (Fixed Income Index Investment) * C Fund (Common Stock Index Investment) * S Fund (Small Capitalization Stock Index Investment) * I Fund (International Stock Index Investment * L Funds (Lifecycle) You can allocate any whole percentage of your future contributions (including loan payments and transfers from traditional IRAs or eligible employer plans) to any of the TSP investment funds by making a contribution allocation. You can redistribute your existing account balance among the funds by making an interfund transfer. Of the funds you can choose from, five are individual funds (one comprising government bonds and the other four tracking specific market indices) while the other five are “Lifecycle Funds” designed to professionally change the allocation mix of investments among the individual funds during various stages of the employee’s Federal service. All TSP funds are trust funds that are regulated by the Office of the Comptroller of the Currency (and not the Securities and Exchange Commission). Here’s a quick breakdown of each option:
* G Fund: Government Securities fund. These are unique government securities not available to the general public and are backed by the full faith and credit of the US Government. * F Fund: Fixed Income Index fund. Invested in BlackRock’s U.S. Debt Index Fund. Tracks the Barclays Capital Aggregate Bond Index. * C fund: Common Stock Index fund. Invested in BlackRock’s Equity Index Fund. Replicates the total return version of the S&P 500 index.
36 The Complete Guide to Federal Employee Benefits
* S Fund: Small Capitalization Stock Index fund. Invested in BlackRock’s Extended Market Index Fund, which tracks the Dow Jones U.S. Completion TSM index. * I Fund: International Stock Index fund. Invested in BlackRock’s EAFE Index Fund. Replicates the net version of the MSCI EAFE index. * Lifecycle Funds: These funds allow for automatic reallocation of assets from more-risky stock funds (the C, I, and S Funds) into less-risky income funds (the F and G Funds) as an employee reaches retirement age, as an employee may lack the time, interest, and/or expertise to determine suitable investments at various life stages. The current Lifecycle Funds are:
* L2040: Retirement date in 2035 or thereafter * L2030: Retirement date between 2025–2034 * L2020: Retirement date between 2015–2024 * L2010: Retirement date between now and 2014 * L Income: Individuals currently receiving monthly payments
Single Life Annuities It’s important to note that a TSP annuity is not the “basic annuity” that you will receive as a result of your retirement coverage under FERS or CSRS, or the retired pay that members of the uniformed services receive. The TSP, through its annuity provider, offers the single life annuities (with level or increasing payments: joint life annuities with your spouse (with level or increasing payments), and joint life annuities with someone other than your spouse (with level payments). Here’s a description of your annuity options:
* Single life annuity: An annuity that provides monthly payments only to you as long as you live.
Thrift Savings Plan 37
* Joint life annuity: An annuity that provides monthly payments to you while you and the person with whom you choose to share your annuity (your “joint annuitant”) are alive. (In most cases, the joint annuitant is the participant’s spouse.) When you or your joint annuitant dies, monthly annuity payments will be made to the survivor for his or her lifetime. The amount of the payment while you and your joint annuitant are alive and the amount of the payment to the survivor depend on whether you choose a 100 percent or a 50 percent survivor annuity. (Note that if you choose an annuity that provides for a joint annuitant other than your spouse, the joint annuitant must be either a former spouse or someone with an insurable interest in you. This means that the person is financially dependent on you and could reasonably expect to derive financial benefit from your continued life.) * 100 percent survivor annuity: The amount of the monthly annuity payment to the survivor is the same as the annuity payment made while both you and your joint annuitant are alive. However, the amount of the monthly payment that you receive while you are both alive is generally less than it would be if you had selected the 50 percent survivor annuity. * 50 percent survivor annuity: The amount of the monthly annuity payment to the survivor -- whether the survivor is you or your joint annuitant -- is cut in half (that is, cut to 50 percent) of the annuity payment made while both you and your joint annuitant are alive. If you name a joint annuitant who is more than 10 years younger than you, you must choose a joint life annuity with the 50 percent survivor benefit. The only exception is for a former spouse to whom all or a portion of your TSP account is payable under a retirement benefits court order. Once you have chosen either a single life or a joint life annuity, you must decide whether you want to receive level or increasing payments. Here’s a description of each option:
* Level payments. The amount of the monthly annuity payment remains the same from year to year. Thus, with a single life annuity, you receive the same monthly payment for as long as you live. With a joint life annuity, you receive the same monthly payment for as long as you and your joint annuitant are alive. The monthly payment to the survivor will depend on whether you have chosen a 100 percent survivor annuity or a 50 percent survivor annuity, but it will remain at the same level for the life of the survivor.
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* Increasing payments. The amount of the monthly annuity payment can change each year on the anniversary date of the first payment. The amount of the change is based on the change in inflation, as measured by the consumer price index. Increases cannot exceed three percent per year, but monthly annuity payments cannot decrease. When annuity payments start, they are smaller than they would have been if you had selected level payments, but they usually increase each year. Increasing payments can be combined with either the single life annuity or the joint life annuity with spouse. You cannot choose increasing payments when the joint annuitant is not your spouse. There are two additional annuity features available: the cash refund feature, and the 10-year certain feature. Under certain circumstances, these features will provide payments to your named beneficiary. When you choose one of these features, your monthly payments will be less than they would have been if you had chosen an annuity without either of these features. Here are descriptions of these special annuity features:
* Cash refund. If you (and your joint annuitant, if applicable) die before the amount used to purchase your annuity has been paid out, the remaining amount will be paid to your beneficiary in a lump sum. This feature can be combined with either a single life or a joint life annuity, and with level or increasing payments. * Ten-year certain. If you die before receiving annuity payments for a 10-year period, payments will continue to your beneficiary for the rest of the 10-year period. If you live beyond the 10-year period, you will continue to receive payments, but no payments will be made to a beneficiary when you die. This feature can be combined with a single life annuity with either level or increasing payments. It cannot be combined with a joint life annuity. When you’re reviewing your annuity options, it’s important that you understand that the value of the total expected payments under all of the annuity options is comparable, but the amounts of each monthly payment that you receive -- and the provision for continuing payments to a survivor or beneficiary -- are different. For example, a monthly annuity payment under a single life annuity will generally be more than the monthly payment under a joint life annuity. However, there will generally be fewer payments under a single life annuity than under a joint life annuity. This is because payments continue under the joint life annuity after the death of one of the joint annuitants until the survivor dies.
Thrift Savings Plan 39
To estimate annuity payments, you must first estimate your TSP account balance at the expected annuity purchase date. You can do so by using the Projecting Your Account Balance calculator on the TSP website at http://www.tsp.gov. Then use the TSP Annuity Calculator to estimate the amounts of monthly annuity payments for the different annuity options using the current interest rate index (which is posted on the TSP website). Remember that the exact amount of your monthly annuity payment cannot be determined until the date of purchase, as opposed to the date the money is withdrawn from your account. To request an annuity, complete Form TSP-70, Request for Full Withdrawal, indicating that you want a TSP annuity (available at: https://www.tsp.gov/forms/ formsPubs.shtml) If you choose a joint life annuity, you will have to provide proof of your joint annuitant’s age. You can do so by providing a copy of your joint annuitant ‘s birth certificate. If the birth certificate is unavailable, refer to the form for other documents that may be used. If you are a married TSP participant, spouses ‘ rights apply. If you are a Thrift Savings Plan (TSP) participant age 59 1/2 or older and are currently employed by the federal government, you can request a payment of all or part of your TSP account. You may make only one age-based in-service withdrawal. The minimum withdrawal is $1,000 (or the account balance, if smaller). For married FERS employees and uniformed service members the spouse must consent to the withdrawal; for married CSRS employees the spouse need only be notified. An employee over age 59 1/2 may request this “age-based” withdrawal. The withdrawal is not subject to any penalties (other than income tax and loss of potential future earnings on the investment); however, the employee may not then request a post-employment partial withdrawal. An employee may make only one such withdrawal. An employee may also request a “financial hardship” withdrawal, which is limited to one of four specific needs:
* Negative monthly cash flow, * Medical expenses (including household improvements needed for medical care), * Personal casualty losses, or * Legal expenses for separation or divorce.
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Financial hardship withdrawals aren’t cheap, and should be considered carefully. In addition to the permanent withdrawal of funds (the funds cannot be repaid to the TSP) and the permanent loss of potential future earnings on the investment:
1. The employee cannot contribute to TSP for the following six months and loses any matching contributions during this time (however, the employee will still receive automatic contributions); thus, the employee loses both the tax-deferral advantages and the potential future earnings), 2. After six months the contributions are not automatically renewed; the employee must submit paperwork to renew them, and 3. The withdrawal is subject to both income tax and, if the employee is under age 59 1/2, the early withdrawal penalty tax. A financial hardship withdrawal can be made only once every six months.
A Viable Alternative You aren’t locked into using the government’s TSP annuity plan to fund your golden years. In fact, at Government Benefit Advisors we encourage federal employees to explore their options and consider using an alternative investment vehicle once you reach the age of 59-1/2 (as opposed to leaving your money in the TSP). Using an S&P 500 fixed indexed annuity with annual reset, for example, when the index falls, your contract value remains level. When the index rises, your annuity is credited with interest based in part on the index movement. So if the market falls again, you can rest easier knowing your retirement savings won’t fall with it. And regardless of whether or not the market falls, the value of your fixed indexed annuity is guaranteed not to fall with it. You can accumulate money for your retirement without the risks of market downturns by purchasing this type of fixed indexed annuity. It works like this: During market upswings, a portion of the interest linked to the performance of a market index, such as the S&P 500, is credited to your accumulated value. When the market goes down, your accumulated value stays put until another upswing— guaranteed. Thanks to the annual reset process, the interest credited each contract year is “locked in” and will not be affected if the index falls.
Thrift Savings Plan 41
As you explore your options, keep in mind that fixed indexed annuities are not registered securities or stock market investments and do not directly participate in any stock or equity investments. Market indices do not include dividends paid on the underlying stocks, and therefore do not reflect the total return of the underlying stocks; neither an index nor any market-indexed annuity is comparable to a direct investment in the equity markets. Federal employees who purchase market-indexed annuities are not directly investing in a stock market index.
Your Next Step Check out the TSP Annuity Guide online at www.myfederalretirement.com/ public/142.cfm. Use the information gleaned from this chapter, and the additional insights found on the website, to make the best possible decisions regarding your TSP. In the next section, we will look at Social Security and how the program applies to federal employees.
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“After a consultation with Government Benefit Advisors, I learned that I could work another 10 years, and that my monthly retirement dollars would be $400 (versus retiring immediately). I decided to retire immediately!” – Bob J., Houston, Texas.
CHAPTER Seven Social Security
S
ocial security is a social insurance program providing social protection, or protection against socially recognized conditions, including poverty, old age, disability, unemployment and others. President Roosevelt signed the Social Security Act into law in 1935, and taxes were collected for the first time in January 1937 (the first one-time, lump-sum payments were made that same month). Regular ongoing monthly benefits started in January 1940. Some federal employees and employees of state or local government agencies may be eligible for pensions that are based on earnings not covered by Social Security. If you didn’t pay Social Security taxes on your government earnings and you are eligible for Social Security benefits, the formula used to figure your benefit amount may be modified, giving you a lower Social Security benefit. No matter what your full retirement age (also called “normal retirement age”) is, you may start receiving benefits as early as age 62 or as late as age 70. You can retire at any time between age 62 and full retirement age. However, if you start benefits early, your benefits are reduced a fraction of a percent for each month before your full retirement age. The chart below reflects age 62 reduction amounts and includes examples based on an estimated monthly benefit of $1000 at full retirement age:
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Full Retirement and Age 62 Benefit By Year Of Birth
Year of Birth 1
1937 or earlier
Full (normal) Retirement Age
Months between age 62 and full retirement age
At Age 62 2 A $1000 retirement benefit would be reduced to
The retirement benefit is reduced by 3
A $500 spouse’s benefit would be reduced to
The spouse’s benefit is reduced by 4
65
36
$800
20.00%
$375
25.00%
1938
65 and 2 months
38
$791
20.83%
$370
25.83%
1939
65 and 4 months
40
$783
21.67%
$366
26.67%
1940
65 and 6 months
42
$775
22.50%
$362
27.50%
1941
65 and 8 months
44
$766
23.33%
$358
28.33%
1942
65 and 10 months
46
$758
24.17%
$354
29.17%
66
48
$750
25.00%
$350
30.00%
1955
66 and 2 months
50
$741
25.83%
$345
30.83%
1956
66 and 4 months
52
$733
26.67%
$341
31.67%
1957
66 and 6 months
54
$725
27.50%
$337
32.50%
1958
66 and 8 months
56
$716
28.33%
$333
33.33%
1959
66 and 10 months
58
$708
29.17%
$329
34.17%
67
60
$700
30.00%
$325
35.00%
1943-1954
1960 and later
1. If you were born on January 1st, you should refer to the previous year. 2. If you were born on the 1st of the month, we figure the benefit as if your birthday was in the previous month. You must be at least 62 for the entire month to receive benefits. 3. Percentages are approximate due to rounding. 4. The maximum benefit for the spouse is 50% of the benefit the worker would receive at full retirement age. The percent reduction for the spouse should be applied after the automatic 50% reduction. Percentages are approximate due to rounding.
As a general rule, early or late retirement will give you about the same total Social Security benefits over your lifetime. If you retire early, the monthly benefit amounts will be smaller to take into account the longer period you will receive them. If you retire late, you will get benefits for a shorter period of time but the monthly amounts will be larger to make up for the months when you did not receive anything.
Social Security 45
There are advantages and disadvantages to taking your benefit before your full retirement age. The advantage is that you collect benefits for a longer period of time. The disadvantage is your benefit is reduced. Each person’s situation is different. Here are a few points to keep in mind:
* Remember that, if you delay your benefits until after full retirement age, you may be eligible for delayed retirement credits that would increase your monthly benefit; * Keep in mind that there are other things to consider when making the correct decision about your retirement benefits and * Contact Social Security before you decide when to retire. There’s an easy-to-use social security calculator online at http://www.ssa.gov/retire2/ AnypiaApplet.html. You can enter a number of variables (age, yearly salaries, and so forth) to come up with a retirement benefit estimate.
Specifics for Government Workers So far in this chapter we’ve walked you through the same basic steps and parameters that would apply to any worker in the U.S. Now we’re going to look at the Social Security issues that are specific to federal employees. The Government Pension Offset should be of particular concern because some of an employee’s spousal Social Security benefit may be offset if the employee has a government pension from work not covered by Social Security. The offset does not apply to the employee’s own Social Security benefit, only the benefit that comes from a spouse’s employment. If the Government Pension Offset applies, the spousal Social Security benefit will be reduced by two-thirds of any federal pension based on employment not covered by Social Security. Some employees are exempt from the Government Pension Offset, including employees who are automatically covered by the Federal Employees Retirement System (FERS), Civil Service Retirement System (CSRS) Offset, and those who elected to transfer to FERS before January 1, 1988, or during the belated transfer period, which ended June 30, 1988. Employees who were covered by CSRS and who elected FERS coverage after June 30, 1988, must have five years of Federal employment covered by Social Security to be exempt from the offset.
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There is also a Windfall Elimination Provision, which means that if you receive a Federal pension and are also eligible for Social Security benefits based on your own employment record, a different formula may be used to compute your Social Security benefit. This formula will result in a lower benefit. The Windfall Elimination Provision affects workers who reach age 62 or become disabled after 1985 and are first eligible after 1985 for a Federal pension. The Windfall Elimination Provision does not apply if:
* You were eligible to retire before January 1, 1986; or * You were first employed by the government after December 31, 1983; or, * You have 30 or more years of substantial earnings under Social Security. To get an estimate of the amount of government pension offset and windfall elimination provision reduction, contact your local Social Security office. They will be best equipped to provide this information in a timely, accurate manner. There’s another consideration that you’ll want to keep in mind when estimating your Social Security benefits. Federal employees hired or rehired on or after January 1, 1984, who are covered by both CSRS and Social Security at the same time are called CSRS Offset Employees. CSRS offset employment time is used to compute the annuity that is paid out to you. However, your CSRS annuity will be reduced when you become eligible for Social Security benefits. The offset applies when the basic requirements for Social Security are met, generally at age 62, even if you do not apply for those benefits. If you are not eligible for Social Security benefits at age 62, there is no offset unless you become eligible later. The offset reduction is the lesser of the: Difference between the SSA monthly benefit amounts with and without CSRS offset service or Product of the SSA monthly benefit amount with Federal earnings multiplied by a fraction where the numerator is the employee’s total CSRS offset service rounded to the nearest whole number of years and the denominator is 40. If you are under age 62 and your annuity benefits were computed using either 60% or 40% of your “high-3” average salary, OPM will reduce your monthly annuity by all or a portion of your Social Security benefits. While you are receiving an annuity computed using the 60% computation, OPM must reduce your monthly annuity by 100% of any Social Security disability benefit to which you are entitled.
Social Security 47
While you are receiving an annuity calculated by using the 40% computation, your monthly annuity will be reduced by 60% of any Social Security disability benefit to which you are entitled. This reduction only applies for months in which you are concurrently entitled to both FERS and Social Security benefits. The final point that could affect your Social Security earnings as a federal employee involves the receipt of Social Security benefits which affects a child’s entitlement to a FERS survivor benefit. The total FERS benefits payable to all children are reduced by the total Social Security benefits payable to all children. The remaining amount is divided by the total number of children payable under FERS. Each eligible child receives this amount. If the Social Security benefits equal or exceed the FERS benefits, no FERS benefits are be paid. In many cases, the payments from Social Security will eliminate the FERS benefit altogether.
Your Next Step Ask for a form SSA-7004-PC, Request for Earnings and Benefit Estimate Statement, from your local Social Security Office or visit the SSA online at http://www.ssa. gov. If you submit this form, you will get a statement that provides information on your future eligibility for Social Security benefits and estimates of these benefits at specified dates. These estimates do not reflect any reduction for the Government Pension Offset or the Windfall Elimination Provision (WEP). Now it’s time to set your sites on a federal benefit program that’s become more and more important as life expectancies grow, and as the 78-million-strong Baby Boomer population moves into retirement age: long term care insurance. Flip to the next page to find out how the program works, and how you can take advantage of it.
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“I was a federal prison guard, and I wanted to maximize the income potential from my TSP. I didn’t want to risk losing my savings. Government Benefit Advisors helped me get a higher interest rate and guaranteed savings that I could count on. I watched my retirement savings grow annually. I was so impressed by Government Benefit Advisors’ services that I referred all of my co-workers to them.” – Tim S., Chicago.
CHAPTER eight Federal Long Term Care Insurance Program (FLTCIP)
T
he Long Term Care Security Act authorized the development of a long-term care insurance program designed exclusively for federal employees. OPM regulates the Federal Long Term Care Insurance Program (FLTCIP) and ensures that the program remains up-todate and competitive. Several groups are eligible to apply for coverage under the FLTCIP, including federal employees and annuitants. Also eligible are current and retired members of the uniformed services, as well as qualified relatives. The FLTCIP offers the following:
* Home, assisted living and nursing care: You can choose your care setting, whether at home, in an assisted living facility, in a nursing home or in a variety of other settings. It also covers care provided in the home by friends, family members and other unlicensed caregivers. * Stay-at-home benefit: The LTCIP offers a stay-at-home benefit which can pay benefits for numerous options that support care in a home environment such as care planning visits, home modifications, an emergency medical response system, durable medical equipment, caregiver training and home safety checks. * Portable coverage: Once you have coverage, it is portable. You can keep it as long as you continue to pay the required premiums and have not exhausted your maximum lifetime benefit, even if you are no longer a member of an eligible group (for example, if you leave government employment). * Guaranteed renewable: Your insurance coverage is guaranteed renewable. It can never be canceled by the insurance carrier as long as you pay your premiums. It cannot be canceled due to your age or a change in your health. * Waiver of premium: Your coverage includes a waiver of premium. Once you have completed you waiting period, the waiver of premium feature allows you to stop paying premiums while you are receiving benefits.
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If you initiate a claim and are approved for benefits, care coordinators will work with you and/or your family members to develop a plan of care to meet your individual care needs. They can also help you find high-quality care providers in your area and relay the results of state survey reports regarding service availability, quality, costs and licensing. Care coordinators can also arrange for discounted services, monitor the care you’re receiving and assist with changing your plan of care as your needs change. This service is personal because you can talk to the same care coordinator who knows your particular situation each time you call. The FLTCIP also provides certain care coordination services to qualified relatives of enrollees at no cost.
Here are your FLTCIP plan options: * Plan A: Consider this plan if you want protection but are looking for a lower-cost option, if you will be living in an area where long term care costs are low, or if you plan to pay out of pocket for some of the costs of long term care in the future, if needed: • • • • •
Daily Benefit Amount: $150 Benefit period: two years Maximum Lifetime Benefit: $109,500 Waiting period: 90 calendar days Inflation period: 4% Automatic Compound Inflation Option, 5% Automatic Compound Inflation Option or Future Purchase Option
* Plan B: Consider this plan if you want protection for at least three years, which corresponds to the average length of stay in a nursing home, or if you will be living in an area where long term care costs are low. • • • •
Daily Benefit Amount: $150 Benefit period: three years Maximum Lifetime Benefit: $164,250 Waiting period: 90 calendar days
• Inflation protection: 4% Automatic Com1pound Inflation Option, 5% Automatic Compound Inflation Option or Future Purchase Option
* Plan C: Consider this plan if you want protection for at least three years, which corresponds to the average length of stay in a nursing home, or if you will be living in an area where long term care costs are around the national average.
Federal Long Term Care Insurance Program (FLTCIP) 51
• • • • •
Daily Benefit Amount: $200 Benefit period: three years Maximum Lifetime Benefit: $219,000 Waiting period: 90 calendar days Inflation protection: 4% Automatic Compound Inflation Option, 5% Automatic Compound Inflation Option or Future Purchase Option
* Plan D: Consider this plan if you will be living in an area where long term care costs are around the national average but you want protection for a longer period of time. • • • • •
Daily Benefit Amount: $1200 Benefit period: five years Maximum Lifetime Benefit: $365,000 Waiting period: 90 calendar days Inflation protection: 4% Automatic Compound Inflation Option, 5% Automatic Compound Inflation Option or Future Purchase Option
What the FLTCIP Covers The Federal Long Term Care Insurance Program (FLTCIP) provides long term care insurance to help pay for costs of care when enrollees need help with activities they perform every day, or have a severe cognitive impairment, such as Alzheimer’s disease. Long term care insurance helps pays for long term care services in many settings, such as at home, a nursing home, assisted living facility and an adult dependent care facility. This is extremely important coverage, and helps to ensure that you don’t deplete your savings should you require long term care services. The FLTCIP is medically underwritten, which means you will need to answer questions about your medical history when applying for it. Certain medical conditions, or combinations of conditions, will prevent some people from being approved for coverage. You need to apply to find out if you qualify for coverage under the FLTCIP. If you are approved for coverage, pay your premiums, and you meet the insurance carrier’s criteria for benefit payment, you will be reimbursed for covered long term care services up to the amount of your daily benefit after you satisfy the waiting period.
52 The Complete Guide to Federal Employee Benefits
Your Next Step Visit the FLTCIP website at www.opm.gov/insure/archive/ltc/. The FLTCIP is medically underwritten. This means you will be asked to answer questions about your medical history. Certain medical conditions, or combinations of conditions, will prevent some people from being approved for coverage. You apply for coverage by filling out an application either online or on paper. To check the status of your application, call Long Term Care Partners at 1-800-LTCFEDS (1-800-582-3337). Now it’s time to take a look at the various Employee Assistance Programs (EAPs) available to you as a federal employee. Click over the next chapter to learn what your options are in this category of benefits.
“Upon meeting with Government Benefit Advisors I learned that the money I was paying for on my FEGLI was actually more expensive, and came with fewer long-term benefits than other options. I saved money and got more benefits as a result of that meeting and the advice I received at that consultation.” – Mary P., Kansas City.
Chapter nine Employee Assistance Programs (EAPs)
A
ll Federal agencies provide Employee Assistance Programs (EAP) for employees. Basic EAP services include free, voluntary, short-term counseling and referral for various issues affecting employee mental and emotional well-being, such as alcohol and other substance abuse, stress, grief, family problems and psychological disorders. EAP counselors also work in a consultative role with managers and supervisors to help address employee and organizational challenges and needs. Many EAPs are active in helping organizations prevent and cope with workplace violence, trauma and other emergency response situations. The FOH (Federal Occupational Health) manages the largest EAP in the country, covering more than 700,000 federal workers each year. The EAP is a comprehensive program that helps employees resolve personal problems that may adversely impact their work performance, conduct, health and wellbeing. FOH’s EAP addresses problems in the quickest, least restrictive, and most convenient manner while minimizing cost and protecting client confidentiality. Among the services it offers are:
* Let’s Talk Newsletter * Leadership Today * Advance Directives * What to Expect When Contacting the Employee Assistance Program * The Value of Employee Assistance Programs * EAP Website * Assessment, counseling and referral services * Courses, Seminars, and Workshops * Critical Incident Stress Management (CISM)
54 The Complete Guide to Federal Employee Benefits
* Employee risk management (supervisor and union consultation) * “Continuous Quality Improvement” reviews * Financial services * Legal services * Management reports (utilization and trend analyses) * Program promotion * Law Enforcement EAP The U.S. Office of Personnel Management’s (OPM) maintains government-wide responsibility for providing policy guidance and technical assistance to agencies in establishing and improving EAPs. In the development and implementation of EAPs, the OPM works closely with the following agencies that share responsibility for alcohol and/or drug abuse activities:
1. The Division of Federal Occupational Health (DFOH) provides professional consultation and technical assistance to agencies in the development and oversight of EAP programs and delivers comprehensive EAP services to agencies through interagency agreements. Federal professionals monitor and evaluate the delivery of program services and provide quality assurance that employee and agency needs are being met. 2. The Substance Abuse and Mental Health Services Administration (SAMHSA) provides assistance to agencies on facilitating and extending programs for the prevention of drug abuse and for the treatment and rehabilitation of drug abusers. In terms of the Drug-Free Federal Workplace Program, for example, SAMHSA is responsible for enforcing the Mandatory Guidelines on Drug Testing and coordinating the review of agency drug plans under E.O. 12564. SAMHSA also provides technical assistance to Federal agencies on drug testing, medical review, laboratory certification and overall drug program implementation. SAMHSA compiles the Semi-annual Report on Drug Testing. Federal agencies are responsible for:
* Developing agency policy on EAP goals and training; * Providing top management support and endorsement for EAPs; * Determining the extent of services to be provided through the EAP and the methods for providing them;
Employee Assistance Programs (EAPs) 55
* Negotiating or consulting with unions, as appropriate, on the provision of EAP services to bargaining unit employees; * Publicizing the EAP through internal memos, newsletters, posters, etc.; * Encouraging employee utilization of the EAP by making these services convenient and available to employees.
Q&A Here’s a useful Q&A that you will help you decipher the government’s EAPs: What is an Employee Assistance Program (EAP)? An Employee Assistance Program (EAP) is a service available to all employees at no cost. It is staffed by professional counselors who will help you address problems that can adversely affect job performance, reliability and personal health. A counselor will discuss the problem with you and after helping you assess the problem, provide short-term counseling. If needed, the counselor will also refer you to other professional services and resources within your community for further information and assistance. What kinds of problems do EAPs help resolve? A EAP counselors will work with you to help resolve a wide variety of problems including alcohol and drug abuse, work and family pressures, legal and financial problems, job stress, and other concerns which can affect your work performance and personal health. Do EAPs offer more than counseling services? In addition to counseling employees on an individual basis, EAPs often sponsor lunchtime seminars, send out employee newsletters and provide information designed to help you and your co-workers establish a healthier and more rewarding lifestyle. Will matters I discuss with the EAP counselor be kept confidential? Yes, your privacy is protected by strict confidentiality laws and regulations and by professional ethical standards for counselors. The details of your discussions with the counselor may not be released to anyone without your written consent. How successful are EAPs in helping employees? Periodic evaluations conducted by the U.S. Office of Personnel Management indicate that the vast majority of the thousands of employees who annually seek assistance from their EAPs are helped in overcoming their problems.
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How much will the EAP cost me? There is no cost to employees who receive counseling and other services provided by the agency’s EAP. Costs for outside treatment and professional services, which can result in personal expense, may be covered by your Federal Employee Health Benefits plan or private insurance. The EAP counselor will work with you to identify the best available outside treatment program and services in line with your individual finances.
Your Next Step A telephone call is normally all it takes to make an appointment with an EAP counselor. EAP operating hours usually are flexible so the employees can make appointments before, during and after the workday. For specific information on hours of operation and procedures for making appointments, you should check your agency’s bulletin board, telephone directory or call your agency’s EAP office. In the final chapter of this book we’ll look at a potpourri of other benefits that are available to federal employees, including student loan repayment and child care subsidy.
“I met with Government Benefit Advisors for a Personal Benefit Analysis. During the meeting I learned exactly how my TSP-matching program works, and how to guarantee that I wouldn’t lose any money from my retirement fund. I sleep a lot better at night, thanks to Government Benefit Advisors.” – Sue H., South Carolina.
CHAPTER TEN Other Important Benefits
T
here are a bevy of other benefits that you’re entitled to as a federal employee, retiree or family member. They range from student loan repayment to child care subsidies to family-friendly leave options. We’ll go through each of them in this chapter to help you decipher your options and pick the ones that are applicable to your situation.
Student Loan Repayment The federal student loan repayment program permits agencies to repay federally insured student loans as a recruitment or retention incentive for candidates or current employees of the agency. Any federal employee is eligible, with the exception of those occupying a position excepted from the competitive civil service because of their confidential, policy-determining, policymaking or policy-advocating nature Loans eligible for payment are those made, insured or guaranteed under parts B, D, or E of title IV of the Higher Education Act of 1965 or a health education assistance loan made or insured under part A of title VII or part E of title VIII of the Public Health Service Act. There are certain limitations within this program. Although the student loan is not forgiven, for example, agencies may make payments to the loan holder of up to a maximum of $10,000 for an employee in a calendar year and a total of not more than $60,000 for any one employee. And, as with any incentive, this authority is used at the discretion of the agency. Each agency must develop a plan to describe how the program will be implemented.
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An employee receiving the student loan repayment benefit must sign a service agreement to remain in the service of the paying agency for a period of at least three years. An employee must reimburse the paying agency for all benefits received if he or she is separated voluntarily or separated involuntarily for misconduct, unacceptable performance or a negative suitability determination under 5 CFR part 731. In addition, an employee must maintain an acceptable level of performance in order to continue to receive repayment benefits. Understand that periods of leave without pay, or other periods during which the employee is not in a pay status, do not count toward completion of the required service period. The service completion date must be extended by the total amount of time spent in non-pay status. However, as provided by 5 CFR 353.107, absence because of uniformed service or compensable injury is considered creditable toward the required service period upon reemployment.
Q&A Here’s a Q&A that will help you understand some of the idiosyncrasies of the student loan repayment program: What is the student loan repayment program? Under 5 U.S.C. 5379 and 5 CFR part 537, agencies are authorized to establish a program under which they may agree to repay certain types of Federally made, insured or guaranteed student loans as a recruitment or retention incentive for highly qualified personnel. Are employees entitled to a student loan repayment? No. An agency has discretionary authority to repay certain types of Federally made, insured or guaranteed student loans as a recruitment or retention incentive for highly qualified candidates or current employees. How does a candidate or current employee go about applying for a student loan repayment? Current federal employees or potential candidates may contact their current or potential employing agency for further information. Each participating agency must develop a plan that describes how the agency will implement the student loan repayment program. What is the maximum amount of a student loan repayment? For any one individual, an agency may agree to provide student loan repayment benefits of up to $10,000 per calendar year, subject to a cumulative maximum of $60,000 per employee.
Other Important Benefits 59
Who receives the actual loan repayment check? The employing agency makes student loan payments directly to the loan holder. Student loan payments are not paid to employees. May an agency make a loan repayment for a student loan that was previously repaid by the employee? No. An agency may not make a loan repayment for a student loan that was previously repaid by the employee. (See 5 U.S.C. 5379(b)(3).) Student loan repayments may be paid only for outstanding student loans. May an agency agree to repay any future student loans accrued by an employee? No. An agency may agree only to make payments on those student loans taken out prior to the student loan repayment agreement. (See 5 U.S.C. 5379(b)(1).) May an agency offer student loan repayment benefits in addition to existing bonuses and incentives? Agencies may offer student loan repayment benefits in conjunction with recruitment, relocation and retention incentives. Agencies may also use student loan repayment benefits in conjunction with a physicians’ comparability allowance (PCA). However, 5 CFR 595.105(e) requires that the amount of the PCA be reduced by the amount of the student loan repayment. May an agency offer a student loan repayment benefit to recruit an individual from another federal agency? No. An agency may not use this authority to recruit an individual from outside the agency who is currently employed in the federal service. (See 5 CFR 537.105(c).) May an agency offer a student loan repayment benefit to retain an employee likely to leave for a position in another federal agency? Agencies may not offer to repay a student loan for an employee who is likely to leave for any position in any branch of the Federal Government. Are employees not covered by the General Schedule (GS) pay system eligible for student loan repayment benefits? Yes. All “highly qualified” personnel, regardless of job series, including Senior Executive Service members, Federal Wage System employees and employees covered by administratively determined pay systems, are eligible unless specifically excluded by law or regulation.
60 The Complete Guide to Federal Employee Benefits
May a parent who bears a PLUS loan obligation for his son or daughter qualify for loan repayment benefits under the student loan repayment program? The statute authorizing this program states that this incentive is to be used for employees of a given agency who have outstanding student loans. Thus, if the employee has a PLUS loan for his or her child, the loan would qualify for repayment. However, if a PLUS loan is held by an employee’s parent, the employee is not eligible for loan repayment benefits for the parent’s PLUS loan. While a PLUS loan an employee has previously taken out to help pay for his or her child’s education is a qualifying student loan under 5 U.S.C. 5379(a)(1)(B) and 5 CFR 537.102, an agency may specify in its agency loan repayment plan that it will not offer to repay PLUS loans under its student loan repayment program. Are employees who have defaulted on their student loans eligible for this program? The student loan repayment authority itself does not preclude payments for employees who have defaulted on their student loans. However, agencies may exclude them by so specifying in their agency plans. What are examples of the loans that qualify under the student loan repayment program? Loans made or insured under the Higher Education Act of 1965 include the following:
* Federal Family Education Loans (FFEL) • • • •
Subsidized Federal Stafford Loans Unsubsidized Federal Stafford Loans Federal PLUS Loans Federal Consolidation Loans
* William D. Ford Direct Loan Program (Direct Loans) • • • • •
Direct Subsidized Stafford Loans Direct Unsubsidized Stafford Loans Direct PLUS Loans Direct Subsidized Consolidation Loans Direct Unsubsidized Consolidation Loans
* Federal Perkins Loan Program • National Defense Student Loans (made before July 1, 1972) • National Direct Student Loans (made between July 1, 1972, and July 1, 1987) • Perkins Loans (made after July 1, 1987)
Other Important Benefits 61
* Loans made or insured under the Public Health Service
Act include the following: • • • • •
Loans for Disadvantaged Students (LDS) Primary Care Loans (PCL) Nursing Student Loans (NSL) Health Professions Student Loans (HPSL) Health Education Assistance Loans (HEAL)
Child Care Subsidy Program Child care can be expensive, especially for working and lower-income families. Day care costs alone can eat up any discretionary income that could have been put to a different use. Unfortunately, quality child care arrangements are a top concern for all young families, which is why federal agencies – at their own discretion – are allowed to use appropriated funds, including revolving funds otherwise available for salaries, to assist lower income employees with the costs of child care. OPM issued final regulations (5 CFR Part 792) effective March 24, 2003 implementing the Child Care Subsidy Program legislation, entitled “Agency Use of Appropriated Funds for Child Care Costs for Lower Income Employees.” The authority was first established as a pilot program by Congress in Public Law 106-58, sec. 643 (September 29, 1999) and was made permanent in Public Law 107-67, sec. 630 (November 12, 2001). The federal government’s Child Care Subsidy Program applies to employees whose children are under the age of 13, or disabled and under the age of 18, and are enrolled, or will be enrolled, in licensed family child care homes or center-based child care. The child care must be licensed and/or regulated by state and/or local authorities.
Dependent Care Flexible Spending Accounts Flexible Spending Accounts (FSAs) are a newer option that many employers are offering to their workers in this challenging age of healthcare. FSAs are offered by most employers that allow an employee the opportunity to put some of his/her salary aside before taxes to pay for many common out-of-pocket expenses. OPM sponsors The Federal Flexible Spending Account Program, also known as FSAFEDS on behalf of all Executive branch agencies, as well as other agencies that wish to offer this benefit to their employees.
62 The Complete Guide to Federal Employee Benefits
Nearly all federal employees can elect to participate in one or both Flexible Spending Accounts. (Note: some agencies, such as the U.S. Postal Service and the Federal Judiciary, offer their own FSA program for their employees. The benefits of an FSA are the same, but eligibility and other program rules may be slightly different.) FSAFEDS offers two types of FSAs: a health care flexible spending account (HCFSA) and a dependent care flexible spending account (DCFSA). The HCFSA is described elsewhere on this website. You can use a Dependent Care Flexible Spending Account (DCFSA) to pay for eligible dependent care expenses that allow you (and your spouse if you’re married) to work, look for work or attend school full-time. You may elect up to $5,000 each year. That $5,000 limit is a total combined amount for your household, including any child care subsidy amounts, in accordance with Internal Revenue Service regulations. A DCFSA covers eligible expenses for the care of:
* Dependent children under age 13 * A person of any age you claim as a dependent on your Federal Income Tax return, and who is mentally or physically incapable of self-care. This would include an elder or other adult dependent.
Family and Medical Leave Flexible work arrangements are growing in popularity in the U.S., and the federal government is no exception to the rule. Under the Family and Medical Leave Act of 1993 (FMLA), most federal employees are entitled to a total of up to 12 workweeks of unpaid leave during any 12-month period for the following purposes:
* The birth of a son or daughter of the employee and the care of such son or daughter; * The placement of a son or daughter with the employee for adoption or foster care; * The care of spouse, son, daughter or parent of the employee who has a serious health condition; or * A serious health condition of the employee that makes the employee unable to perform the essential functions of his or her position.
Other Important Benefits 63
Under certain conditions, an employee may use the 12 weeks of FMLA leave intermittently. An employee may elect to substitute annual leave and/or sick leave, consistent with current laws and OPM’s regulations for using annual and sick leave, for any unpaid leave under the FMLA. (The amount of sick leave that may be used to care for a family member is limited.) FMLA leave is in addition to other paid time off available to an employee. Here are the job benefits and protection offered by the FMLA:
* Upon return from FMLA leave, an employee must be returned to the same position or to an “equivalent position with equivalent benefits, pay, status, and other terms and conditions of employment.” * An employee who takes FMLA leave is entitled to maintain health benefits coverage. An employee on unpaid FMLA leave may pay the employee share of the premiums on a current basis or pay upon return to work. * There are several advance notice and medical certifications associated with the FMLA, including: * An employee must provide notice of his or her intent to take family and medical leave not less than 30 days before leave is to begin or, in emergencies, as soon as is practicable. * An agency may request medical certification for FMLA leave taken to care for an employee’s spouse, son, daughter or parent who has a serious health condition or for the serious health condition of the employee.
Support for Caregiving Providing care for children and/or dependent adults is a normal part of life, but it can get expensive and challenging. Employed caregivers can face difficult choices as they try to meet the sometimes-competing demands of personal and professional life. Workplace support can not only have a tremendous impact on the work/life and well being of caregivers, it can also help employers to recruit and retain the best possible workforce, and ensure that employees are productive in their work.
64 The Complete Guide to Federal Employee Benefits
The federal government offers a number of benefits and support for employees who are responsible for others. Specific Federal laws, such as the Family and Medical Leave Act (FMLA) (see previous section), and various leave programs specific to the Federal workforce, enhance the ability of employees to give care to family members. Additionally, all federal agencies have Employee Assistance Programs (EAP) (See Chapter Nine) which offer counseling and referral for managing stress and other mental health issues related to caregiving. Some agencies also provide resource and referral programs, which can link employees to community resources for child and elder care. To find an EAP and/or Work/Life contact in your agency, visit the OPM Work/Life website at www.opm. gov/employment_and_benefits/worklife/ and search the contacts database. Although Federal Equal Employment Opportunity (EEO) statutes do not prohibit employment discrimination based solely on parental or other caregiver status, there may be circumstances under which discrimination against a working parent or other caregiver constitutes unlawful disparate treatment under Federal EEO statutes. The U.S. Equal Employment Opportunity Commission (EEOC) has issued the following guidance addressing these issues:
* Enforcement Guidance: Unlawful Disparate Treatment of Workers with Caregiving Responsibilities * Questions and Answers about Unlawful Disparate Treatment of Workers with Caregiving Responsibilities
Protections for Federal Employees Federal employees, former Federal employees and applicants for Federal employment who believe they have been subjected to illegal discrimination or prohibited personnel practices, should promptly contact the relevant office(s) within their agencies. In addition,
* For an EEO claim, see 29 CFR § 1614.105(a) and Federal EEO Complaint Processing Procedures * For a Merit Systems Protection Board (MSPB) appeal, see 5 U.S.C. § 2302(b) and Processing Appeals * For an Office of Special Counsel complaint, see Prohibited Personnel Practices
Other Important Benefits 65
Kinship Care The number of children who are living with a grandparent or other relative has increased dramatically in the past two decades. More than 5 percent of all children in the United States live in such arrangements. Rising divorce rates, teenage pregnancy, child abuse or abandonment, and parental substance abuse, health problems, death or incarceration are some of the factors linked to this trend. The federal government recognizes the vital role many of their employees play in the lives of their grandchildren or other relatives when they assume the role of parent to these children. There are many ways to provide support to employees at minimal cost, such as providing information and resources; offering counseling; establishing a workplace support group; and sponsoring special events. The benefits to organizations of offering such programs are improved morale, work performance and retention; and decreased tardiness and absenteeism. The benefits to the employees’ families, as a result of the information and support they receive through work/life programs, can also be significant. The federal government defines kinship care as “the full-time care, nurturing and protection of children by relatives, members of their tribes or clans, godparents, stepparents or any adult who has a kinship bond with a child. This definition is designed to be inclusive and respectful of cultural values and ties of affection. It allows a child to grow to adulthood in a family environment.” Agencies set up their own individual programs for kinship care, so check with yours to see what options are available to you as an employee. Information about existing support groups for grandparents raising grandchildren is available from the AARP Grandparent Information Center at 202-434-2296, or local human service agencies.
Your Next Step As you’ve read throughout this book, the number of benefits, programs and retirement programs available to federal employees are plentiful. Their sheer numbers can make the selection and application process challenging, which is why we wrote this book. Our goal is to guide you through your options and help you make the most informed decisions possible. Since these decisions concern your healthcare, retirement and future, we took this project very seriously, and made every effort to ensure that the information is accurate and up to date.
66 The Complete Guide to Federal Employee Benefits
Armed with the information provided in this book, and the specific instructions provided by the agency that you work (or, worked) for, you will be able to make those informed choices. Be sure to confer with your agency, family members and other knowledgeable individuals (such as your financial planner, accountant or attorney) before signing on the dotted line and committing to a program. We wish you the best of luck in your career, retirement and life!
Appendix A Resources for Federal Employees
For Federal Employees http://www.usa.gov/Federal_Employees/Federal_Employees_Gateway.shtml Federal Employee Services http://federaljobs.net/fed.htm U.S. Office of Personnel Management www.opm.gov (includes links to a wide range of government resources) Online forms http://www.opm.gov/forms/ My Federal Retirement http://myfederalretirement.com/ Federal Personnel Handbooks http://www.federalhandbooks.com/ Human Resources Institute http://www.federaltraining.com/ Federal Daily http://www.federaldaily.com/ U.S. Department of Labor www.dol.gov Federal Retirement Planning Guide http://federalretirement.net/ Federal Occupational Health http://www.foh.dhhs.gov/
68 The Complete Guide to Federal Employee Benefits
Appendix b Important Forms
The following pages are a selection of forms you may find useful during your federal benefits planning.
70 The Complete Guide to Federal Employee Benefits
Form
THRIFT SAVINGS PLAN DESIGNATION OF BENEFICIARY
This Form TSP-3, Designation of Beneficiary, Replaces Form TSP-U-3 and Previous Editions of Form TSP-3 Form TSP-U-3 and previous editions of Form TSP-3, Designation of Beneficiary, are no longer available. They have been combined into a single Form TSP-3. This version of Form TSP-3 should be used both by members of the uniformed services and by civilians. (Scroll down to view the form.)
Thrift Savings Plan Form TSP-3 Designation of Beneficiary
August 2010
For Federal civilian employees and members of the uniformed services Use this form to designate a beneficiary or beneficiaries to receive your Thrift Savings Plan (TSP) account after your death. If you would like your TSP account to be distributed according to the order of precedence, do not designate beneficiaries. (See the instructions inside for an explanation of the order of precedence.) This Designation of Beneficiary form will stay in effect until you submit another valid Form TSP-3 or you cancel it. The beneficiary designation(s) you provide on this form will automatically cancel all previous designations you submitted. Complete this form in accordance with the instructions. Do not alter or change any information you provide on the form. Make a copy of this form for your records and send it to the TSP. Do not give this form to your agency or service. Mail the original to: Thrift Savings Plan P.O. Box 385021 Birmingham, AL 35238
Or fax to: 1-866-817-5023
If you have questions, call the toll-free ThriftLine at 1-TSP-YOU-FRST (1-877-968-3778) or the TDD at 1-TSP-THRIFT5 (1-877-847-4385). Outside the U.S. and Canada, please call 404-233-4400 (not toll free). You will receive a confirmation of your designation once your form is processed. Your quarterly participant statements will show the date of your most recent designation. Your primary beneficiaries (if any) are also named in your annual participant statement.
THRIFT SAVINGS PLAN
TSP-3
DESIGNATION OF BENEFICIARY
This form is designed to be read by an optical scanner. To ensure that your request is not delayed, carefully type or print the informa tion requested, using black or dark blue ink. Leave a space between words, but not between the digits in your account number. Type or print legibly inside the boxes. If you print by hand, use simple block letters. (See examples in the instructions.) Limit your responses to the number of available boxes. Do not alter this form or the information you provided. Altered forms may be rejected.
I. participant iNFORMATION
This applies to my:
Civilian Account
Uniformed Services Account
1.
First Name
Last Name
/
/
3. 1 9
2.
5. Foreign address? 6.
4.
Date of Birth (mm/dd/yyyy)
TSP Account Number
Check here.
Middle Name
Daytime Phone (Area Code and Number)
Street Address or Box Number (For a foreign address, see instructions on Page I-1.)
Street Address Line 2
7.
8.
City
9.
State
– Zip Code
Ii. cancellation — To cancel all previous designations without designating new beneficiaries, check the box below.
In the event of your death, payment from the TSP will be made according to the order of precedence set by the United States Code (5 U.S.C. § 8424(d)). If cancelling, submit only this page.
10.
Check here only to cancel all prior beneficiary designations without naming new beneficiaries (see instructions for additional information and complete Section III).
III. signatures — You and your witnesses must complete this section. This entire form is valid only if this page is witnessed
by two persons. A witness must be age 21 or older and cannot be a primary or contingent beneficiary of any portion of this TSP account. By signing below, the witnesses affirm that the participant: (a) signed in their presence, or (b) informed them that the signature is the participant’s own signature. Participant’s Signature
/
/
2 0
/
/
2 0
Witness 1: Signature
Date Signed (mm/dd/yyyy)
Witness 2: Signature
Date Signed (mm/dd/yyyy)
remember to:
/
/
2 0
Date Signed (mm/dd/yyyy)
Witness 1: Print Full Name
Witness 2: Print Full Name
• Enter your full Name and TSP Account Number at the top of each page. • Provide your signature and your witnesses’ signatures above, along with the dates signed. • Sign and date each page, and have your witnesses sign and date each page you complete. • Complete each section in accordance with the instructions. • Make a copy of this form for your records. Do Not Write Below This Line FORM TSP-3, Page 1 (8/2010)
* P I I S 0 0 2 2 8 7 0 1 2 0 0 0 0 0 0 0 0 P I I S
*
PREVIOUS EDITIONS OBSOLETE
Name:
TSP Account Number:
(Last, First, Middle)
IV. primary beneficiary designations
To designate more than three primary beneficiaries, make a copy of this page.
Relationship to you:
Spouse
Other Individual
Trust
Estate
Legal Entity/Corporation
%
SSN/EIN/Tax ID
Name of Individual (Last, First, Middle)/Trust/Estate/Legal Entity or Corporation
/
Name of Trustee/Executor (if applicable)
Foreign address? Check here.
Share:
/
Date of Birth (mm/dd/yyyy)
Street Address or Box Number (For a foreign address, see instructions on Page I-1.)
Street Address Line 2
– City
Relationship to you:
Spouse
Other Individual
Trust
State
Zip Code
Estate
Legal Entity/Corporation
%
SSN/EIN/Tax ID
Name of Individual (Last, First, Middle)/Trust/Estate/Legal Entity or Corporation
/
Name of Trustee/Executor (if applicable)
Foreign address? Check here.
Share:
/
Date of Birth (mm/dd/yyyy)
Street Address or Box Number (For a foreign address, see instructions on Page I-1.)
Street Address Line 2
– City
Relationship to you:
Spouse
Other Individual
Trust
State
Zip Code
Estate
Legal Entity/Corporation
SSN/EIN/Tax ID
Name of Individual (Last, First, Middle)/Trust/Estate/Legal Entity or Corporation
/
Name of Trustee/Executor (if applicable)
Foreign address? Check here.
Share:
/
Date of Birth (mm/dd/yyyy)
Street Address or Box Number (For a foreign address, see instructions on Page I-1.)
Street Address Line 2
– State
City
Participant’s Signature
Date Signed
Check here if naming more than three primary beneficiaries (see instructions for submitting additional pages).
Do Not Write in This Section
Zip Code
Witness 1: Signature
Date Signed
Witness 2: Signature
Date Signed
FORM TSP-3, Page 2 (8/2010) PREVIOUS EDITIONS OBSOLETE
%
Name:
TSP Account Number:
(Last, First, Middle)
V. contingent beneficiary designations
To designate more than three contingent beneficiaries, make a copy of this page.
Relationship to you:
Spouse
Other Individual
Trust
Estate
Name of Contingent: Individual (Last, First, Middle)/Trust/Estate/Legal Entity or Corporation
SHARE of Primary’s
Legal Entity/Corporation Portion:
SSN/EIN/Tax ID
/
Name of Trustee/Executor (if applicable)
Foreign address? Check here.
%
/
Date of Birth (mm/dd/yyyy)
Street Address or Box Number (For a foreign address, see instructions on Page I-1.)
– State
City
Contingent to which primary beneficiary?
SSN/EIN/Tax ID or Date of Birth
Name (Last, First, Middle)/Trust/Estate/Legal Entity or Corporation
Relationship to you:
Zip Code
SHARE of
Spouse
Other Individual
Trust
Estate
Name of Contingent: Individual (Last, First, Middle)/Trust/Estate/Legal Entity or Corporation
Legal Entity/Corporation Primary’s Portion:
SSN/EIN/Tax ID
/
/
Date of Birth (mm/dd/yyyy)
Name of Trustee/Executor (if applicable)
Foreign address? Check here.
%
Street Address or Box Number (For a foreign address, see instructions on Page I-1.)
– State
City
Contingent to which primary beneficiary?
SSN/EIN/Tax ID or Date of Birth
Name (Last, First, Middle)/Trust/Estate/Legal Entity or Corporation
Relationship to you:
Zip Code
SHARE of
Spouse
Other Individual
Trust
Estate
Name of Contingent: Individual (Last, First, Middle)/Trust/Estate/Legal Entity or Corporation
Legal Entity/Corporation Primary’s Portion:
SSN/EIN/Tax ID
/
Name of Trustee/Executor (if applicable)
Foreign address? Check here.
/
Date of Birth (mm/dd/yyyy)
Street Address or Box Number (For a foreign address, see instructions on Page I-1.)
– City
Contingent to which primary beneficiary?
State
SSN/EIN/Tax ID or Date of Birth
Name (Last, First, Middle)/Trust/Estate/Legal Entity or Corporation
Participant’s Signature
Date Signed
Check here if naming more than three contingent beneficiaries (see instructions for submitting additional pages).
Do Not Write in This Section
Zip Code
Witness 1: Signature
Date Signed
Witness 2: Signature
Date Signed
FORM TSP-3, Page 3 (8/2010) PREVIOUS EDITIONS OBSOLETE
%
INFORMATION AND INSTRUCTIONS FOR PAGE 1 This form stays in effect until you submit another valid Form TSP-3 naming other beneficiaries or cancelling all prior designations. It does not affect the disposition of your FERS Basic Annuity, your CSRS annuity, your military retired pay, or any other benefits. Complete this form only if you want payment to be made in a way other than the following order of precedence: 1. To your widow or widower. 2. If none, to your child or children equally, and descendants of deceased children by representation. 3. If none, to your parents equally or to the surviving parent. 4. If none, to the appointed executor or administrator of your estate. 5. If none, to your next of kin who would be entitled to your estate under the laws of the state in which you resided at the time of your death. In this order of precedence, a child includes a natural child (even if the child was born out of wedlock) and a child adopted by the participant; it does not include a stepchild who was not adopted. Note: If your natural child was adopted by someone other than your spouse, that child is not entitled to a share of your TSP account under the statutory order of precedence. “By representation” means that if a child of yours dies before you do, that child’s share will be divided equally among his or her children. “Parent” does not include a stepparent, unless the stepparent adopted you. Making a valid designation. To name specific beneficiaries to receive your TSP account after you die, you must complete this form, and it must be received by the TSP on or before the date of your death. Only a Form TSP-3 is valid for designating beneficiaries to your TSP account(s); a will or court order (i.e., divorce decree) is not valid for the disposition of a TSP account. You may, however, designate your estate or a trust as a beneficiary on Form TSP-3. You are responsible for ensuring that each page of your Form TSP-3 is properly completed, signed, and witnessed. Do not submit an altered form; it may be deemed invalid. If you need to correct or change the information you have entered on the form, start over on a new form. Changing or cancelling your Designation of Beneficiary. This Designation of Beneficiary form will stay in effect until you submit another valid Form TSP-3 naming other beneficiaries or cancelling prior designations. To cancel a Form TSP-3 already on file, follow the instructions for Section II. Keep your designation (and your beneficiaries’ addresses) current. It is a good idea to periodically review how you have designated your beneficiaries — particularly when your life situation changes (e.g., through marriage, divorce, the birth or adoption of a child, or the death of a beneficiary). By law, the TSP must pay your designated beneficiary under all circumstances. For example, if you designated your spouse as your beneficiary, your TSP account must be paid to the spouse designated on Form TSP-3, even if you are separated or divorced from that spouse or have remarried. This is true even if the spouse you designated gave up all rights to your TSP account. Consequently, if your life situation changes, you may want to file a new Form TSP-3 to update or cancel your current beneficiary designation. The share of any primary beneficiary who dies before you do will be distributed proportionally among the surviving designated TSP beneficiaries. If none of your designated beneficiaries is alive at the time of your death, or if you did not designate any other beneficiary, the order of precedence described above will be followed.
SECTION I — Participant Information. For this and all sections of this form, carefully type or print the requested information, using black or dark blue ink. If you print by hand, use simple block letters and numbers. Leave a space between words, but not between the digits in your account number. Type or print legibly inside the boxes.
Examples Correct
Incorrect
Incorrect
CORRECT 3
/
6
3
/1982
/
6
/19
82
Check the box that indicates whether you intend your beneficiary(ies) to receive funds from your civilian or your uniformed services TSP account. If you have both types of TSP accounts and would like to designate the same beneficiaries to receive the same share of both accounts, you need to check both boxes and provide the information requested. If you have both types of accounts and you do not check any box, your form will be rejected. If you use an Air/Army Post Office (APO) or Fleet Post Office (FPO) address, enter your address in the two available address lines (include the unit designation). Enter APO or FPO, as appropriate, in the City field. In the State field, enter AE as the state abbreviation for Zip Codes beginning with 090-098, AA for Zip Codes beginning with 340, and AP for Zip Codes beginning with 962-966. Then enter the appropriate Zip Code. If you have a foreign address, check the box to indicate that this is a foreign address and enter the address as follows: First address line: Enter your street address or post office box number, and any apartment number. Second address line: Enter the city or town name, other principal subdivision (e.g., province, state, county) and postal code, if known. (The postal code may precede the city or town.) City/State/Zip Code Fields: Enter the entire country name in the City field; leave the State and Zip Code fields blank.
EXAMPLE OF FOREIGN ADDRESS
Foreign address? Check here.
2 0 4 5
RUE
RO Y A L E
Street Address or Box Number
0 6 5 7 0
PAR I S
Street Address Line 2
FRANCE City
– State
Zip Code
SECTION II — Cancellation. To cancel a previous Designation of Beneficiary already on file without naming new beneficiaries, check the box in Item 10, sign and date the form, and have it witnessed. If you check this box, your account will be paid according to the order of precedence described earlier. Do not complete this section if you intend to name new beneficiaries in Section IV. Your new designation(s) will automatically cancel any previous designation(s) on file with the TSP. SECTION III — Signatures. Sign and date the form on all pages on the same date. Do not ask the individuals you name as beneficiaries of your TSP account to witness your Form TSP-3. A person named as a primary or contingent beneficiary of your TSP account who is also a witness cannot receive a share of the account. A witness must be age 21 or older.
Page I-1
INFORMATION AND INSTRUCTIONS FOR PAGE 2 SECTION IV — Primary Beneficiary Designations. You may name as a beneficiary any person, trust, corporation, or legal entity, or your estate. Note: If the beneficiary is a minor child, benefits will be made payable directly to the child.
the date of birth boxes blank. Note: Filling out this form will not create a trust; you must have a trust that is already established.
• If the beneficiary is your estate, check the box marked “Estate” and enter the name of the estate and the executor’s name and address in the boxes indicated. Enter the EIN, if available. Leave the date of birth boxes blank.
• If the beneficiary is a corporation or other legal entity, check the box marked “Legal Entity/Corporation.” Enter the name of the entity in the boxes indicated. Enter the legal representative’s name in the boxes marked “Trustee/Executor,” and provide the legal representative’s address. Enter the EIN, if known. Leave the date of birth boxes blank.
To name a primary beneficiary:
• Check the box that indicates the beneficiary’s relationship to you.
• Enter the share for each beneficiary as a whole percentage. Percentages for the primary beneficiaries must total 100 percent. Do not use fractions or decimals.
• For each individual you designate, enter the full name, share, and address. Also enter the date of birth and Social Security number (SSN) or other Taxpayer Identification Number (such as an Employer Identification Number (EIN)). If providing a foreign address, follow the instructions on Page I-1.
If you do not have all of the requested information, you must provide at least the beneficiary’s name and share. If the beneficiary is an individual, you must also provide his or her date of birth or SSN or the form will be rejected.
• If the beneficiary is a trust, check the box marked “Trust.” Enter the name of the trust and the trustee’s name and address in the boxes indicated. Enter the EIN, if available. Leave
If you are naming more than three primary beneficiaries, photocopy Page 2 of this form prior to completing. Enter your name and TSP account number on the top of each page and follow the instructions for completing Section IV. You must sign and date all additional pages; the same two witnesses who signed the form must also sign and date each additional page. If you want to designate contingent beneficiaries, complete Section V on Page 3.
EXAMPLES OF DESIGNATING PRIMARY BENEFICIARIES DESIGNATING A TRUST
DESIGNATING MULTIPLE PRIMARY BENEFICIARIES Relationship to you:
X Other Individual
Spouse
GREENS T E I N
E L EANOR
Trust
Estate
RUTH
9 2 6
3 5
SSN/EIN/Tax ID
Name of Individual (Last, First, Middle)/Trust/Estate/Legal Entity or Corporation
/22/19 Date of Birth (mm/dd/yyyy)
1 0 6 6
CHURCH I L L
3 3 %
8 0 7 2
1 2
Name of Trustee/Executor (if applicable)
Foreign address? Check here.
Share:
Legal Entity/Corporation
8 4
Relationship to you:
Spouse
J OHN
P
MANO
ER I C
P
MANO
Other Individual
Trust
Estate
J ANE
2 1
Share:
Legal Entity/Corporation
9 9
/11/19 Date of Birth (mm/dd/yyyy) L A K EWO O D
3 3 %
2 1 3 5
1 0
NORTH
City
Zip Code
SSN/EIN/Tax ID
Name of Trustee/Executor (if applicable)
NEW
8 5 7 3 5 – 3 0 0 3
9 1 5
Name of Individual (Last, First, Middle)/Trust/Estate/Legal Entity or Corporation
Foreign address? Check here.
City
6 0
ABBOT T
H OWA R D
LA
State
X Other Individual
Trust
K ENNE T H
Estate
J R
Name of Individual (Last, First, Middle)/Trust/Estate/Legal Entity or Corporation
1 5 0 6
City
L ANE
Relationship to you:
E S T A T E
Other Individual
RUTH
R
X Estate
Trust
Legal Entity/Corporation
J ONAH
SSN/EIN/Tax ID
/
MC C L A I N 1 5 0
Share: 1 0 0 %
/
Date of Birth (mm/dd/yyyy)
RO S SMO Y NE
DR I V E
Street Address or Box Number (For a foreign address, see instructions on Page I-1.) Street Address Line 2
Share:
Legal Entity/Corporation
9 0 2
3 7
SSN/EIN/Tax ID
3 4 %
6 6 3 3 9 1
Street Address or Box Number (For a foreign address, see instructions on Page I-1.)
3 3 0 2 8 – 1 2 3 4
CA
A L AME DA
State
City
9 4 5 1 0 – 7 4 8 1
Zip Code
DESIGNATING A LEGAL ENTITY/CORPORATION Relationship to you:
THE
X Y Z
Spouse
Other Individual
Trust
Estate
FOUNDA T I ON
Name of Individual (Last, First, Middle)/Trust/Estate/Legal Entity or Corporation
E L EANOR
State
1 4 6 0 7 – 8 2 9 5
Zip Code
7 0 1 2 4 – 1 9 2 0
ROAD
F L
Spouse
OF
Zip Code
/13/19 Date of Birth (mm/dd/yyyy) ARBOR
NY
State
Name of Trustee/Executor (if applicable)
Street Address Line 2
M I RAMAR
D E L AWA R E
Y ORK
MAR L A
6
Name of Trustee/Executor (if applicable)
Foreign address? Check here.
/
Street Address or Box Number (For a foreign address, see instructions on Page I-1.)
Foreign address? Check here.
ORL EANS
Spouse
/
Date of Birth (mm/dd/yyyy)
Name of Individual (Last, First, Middle)/Trust/Estate/Legal Entity or Corporation
DR I V E
Street Address or Box Number (For a foreign address, see instructions on Page I-1.)
Relationship to you:
SSN/EIN/Tax ID
DESIGNATING AN ESTATE
Street Address Line 2
NEW
Share: 1 0 0 %
Street Address Line 2
State
MO L L Y
Legal Entity/Corporation
TRUS T
1 1 1 1
Foreign address? Check here.
L ANE
A Z
City
PARKE T
Estate
Name of Trustee/Executor (if applicable)
Street Address Line 2
TUCSON
Spouse
X Trust
Name of Individual (Last, First, Middle)/Trust/Estate/Legal Entity or Corporation
Street Address or Box Number (For a foreign address, see instructions on Page I-1.)
Relationship to you: X
Other Individual
Zip Code
7 9
1 0 0 %
9 9 9 9 9 9 9
SSN/EIN/Tax ID
/
J ARV I S
Name of Trustee/Executor (if applicable)
Foreign address? Check here.
X Legal Entity/Corporation Share:
/
Date of Birth (mm/dd/yyyy)
6 4 7 3 0
C ONNE C T I CU T
SU I T E
2 4 0 A
A V ENUE
Street Address or Box Number (For a foreign address, see instructions on Page I-1.) Street Address Line 2
BE THE SDA
City
PRIVACY ACT NOTICE. We are authorized to request the information you provide
on this form under 5 U.S.C. chapter 84, Federal Employees’ Retirement System. We will use this information to identify your TSP account and to process your request. In addition, this information may be shared with other Federal agencies for statistical, auditing, or archiving purposes. We may share the information with law enforcement agencies investigating a violation of civil or criminal law, or agencies implementing a
MD
State
2 0 8 1 5 – 0 6 3 7
Zip Code
statute, rule, or order. It may be shared with congressional offices, private sector audit firms, spouses, former spouses, and beneficiaries, and their attorneys. We may disclose relevant portions of the information to appropriate parties engaged in litigation and for other routine uses as specified in the Federal Register. You are not required by law to provide this information, but if you do not provide it, we will not be able to process your request.
Page I-2
INFORMATION AND INSTRUCTIONS FOR PAGE 3 SECTION V — Contingent Beneficiary Designations. Only complete this page if you are naming contingent beneficiaries. You may designate one or more contingent beneficiaries for each primary beneficiary you name on Page 2. The contingent beneficiary or beneficiaries you name will share the portion of the TSP account that you designated for a specific primary beneficiary who dies before you do — not a percentage of your entire account. For example, Joe Brown is one of your two primary beneficiaries, and his share is 30% of your account. If you designate Mary Brown and Sue Brown (Joe‘s daughters) as his contingent beneficiaries, and each is to get 50%, each would get 50% of Joe‘s portion. Since Joe’s share is 30% of your account, each will get 15% of your account. (You cannot designate contingent beneficiaries for contingent beneficiaries. In this case, you cannot designate contingent beneficiaries for Mary or Sue Brown.) For another example of this situation, see Example 3 below. Check the box that indicates the contingent beneficiary’s relationship to you. If you are only naming one contingent beneficiary for a primary beneficiary, the share for that contingent beneficiary must be 100%. If you name more than one contingent beneficiary for a primary beneficiary, the combined share values for those contingent beneficiaries must equal 100%.
Provide the identifying information for contingent beneficiaries according to the instructions for designating primary beneficiaries in Section IV. For each contingent beneficiary you designate, enter the full name, share, address, and Social Security number (SSN) or other tax ID (such as Employer Identification Number (EIN)). If you do not have all the requested information, you must provide at least the contingent beneficiary’s name and share. If the beneficiary is an individual, you must also provide his or her date of birth or SSN or the form will be rejected. If providing a foreign address, follow the instructions on Page I-1. You must also provide the primary beneficiary’s name and tax ID information (e.g., SSN or EIN, if available) or date of birth. If you are naming more than three contingent beneficiaries, photocopy Page 3 of this form prior to completing. Enter your name and TSP account number on the top of each page and follow the instructions for completing Section V. You must sign and date all additional pages; the same two witnesses who signed the form must also sign and date each additional page. Note: If a named beneficiary dies, you may prefer to submit another Form TSP-3 to update your designation(s).
EXAMPLES OF DESIGNATING CONTINGENT BENEFICIARIES EXAMPLE 3
EXAMPLE 1 Relationship to you:
X
Spouse
GREENS T E I N
Other Individual
AMY
Trust
Estate
9 7 4
J OAN
0 2
SSN/EIN/Tax ID
Name of Contingent: Individual (Last, First, Middle)/Trust/Estate/Legal Entity or Corporation
3
Name of Trustee/Executor (if applicable)
/
1 8
/
CHURCH I L L
HA L T
X Other Individual
Trust
Estate
2 0 0 3
Name of Trustee/Executor (if applicable)
LANE
A Z
State
City
Contingent to which primary beneficiary?
E L EANOR
RUTH
Primary Beneficiary’s Name (Last, First, Middle)/Trust/Estate/Legal Entity or Corporation
8 5 7 3 5 – 3 0 0 3
Zip Code
SSN/EIN/Tax ID
5
MAR I GO L D
CA
R O C K L AWN
9 2 6
3 5
8 0 7 2
SSN/EIN/Tax ID or Date of Birth
Other Individual
A
Trust
X
Estate
PARKE T
MO L L Y
J ANE
Relationship to you:
HA L T
Spouse
ME L I S S A
X Other Individual
Trust
9 1 5
Estate
9 4 2
/
REE L S
Name of Trustee/Executor (if applicable)
Foreign address? Check here.
9 2
OAK
/
S TREE T
Street Address or Box Number (For a foreign address, see instructions on Page I-1.)
Street Address Line 2
I D
BO I S E
State
City
Contingent to which primary beneficiary?
Z ACHAR I A
S I DNE Y
S T E V EN
Primary Beneficiary’s Name (Last, First, Middle)/Trust/Estate/Legal Entity or Corporation
8 3 7 0 9 – 2 1 4 3
Zip Code
9 0 3
2 4
7 6 5 2
SSN/EIN/Tax ID or Date of Birth
In the above example, if the primary beneficiary, Sidney Zacharia, dies before you do, the estate of Betsy A. Lucas would receive 100% of the amount you designated for Sidney Zacharia.
/
6
7 8 9 2
/
1 9 6 2
Date of Birth (mm/dd/yyyy)
2 0 0 7
I R I S
COURT
Street Address Line 2
CA
PARKE T
MO L L Y
9 4 5 1 0 – 9 8 7 7
State
Contingent to which primary beneficiary?
Date of Birth (mm/dd/yyyy)
2 6
SSN/EIN/Tax ID
1 2
5 0%
Share:
Legal Entity/Corporation
E L A I NE
City
SSN/EIN/Tax ID
2 1 3 5
Street Address or Box Number (For a foreign address, see instructions on Page I-1.)
Share: 1 0 0 %
Legal Entity/Corporation
9 9
SSN/EIN/Tax ID or Date of Birth
Name of Contingent: Individual (Last, First, Middle)/Trust/Estate/Legal Entity or Corporation
R O C K L AWN
LUCAS
Name of Contingent: Individual (Last, First, Middle)/Trust/Estate/Legal Entity or Corporation
T I MO T H Y
1 9 5 5
Zip Code
Primary Beneficiary’s Name (Last, First, Middle)/Trust/Estate/Legal Entity or Corporation
Foreign address? Check here.
BE T S Y
/
9 4 5 1 0 – 9 8 7 6
State
City
EXAMPLE 2 Spouse
2 6
A V ENUE
Name of Trustee/Executor (if applicable)
OF
/
Street Address or Box Number (For a foreign address, see instructions on Page I-1.)
Contingent to which primary beneficiary?
In the above example, if the primary beneficiary, Eleanor Ruth Greenstein, dies before you do, Amy Joan Greenstein would receive 100% of her share. Thus, if Eleanor’s share is 33% of your account, Amy would receive all of Eleanor’s share.
E S T A T E
7 7 7 7
Street Address Line 2
Street Address Line 2
TUCSON
Relationship to you:
8 8
Date of Birth (mm/dd/yyyy)
1 4 9 2
Foreign address? Check here.
9 9 9
5 0%
Share:
Legal Entity/Corporation
A L AN
Name of Contingent: Individual (Last, First, Middle)/Trust/Estate/Legal Entity or Corporation
Street Address or Box Number (For a foreign address, see instructions on Page I-1.)
GREENS T E I N
Spouse
R I CHARD
3 9 4 1
Date of Birth (mm/dd/yyyy)
1 0 6 6
Foreign address? Check here.
Share: 1 0 0 %
Legal Entity/Corporation
Relationship to you:
Zip Code
J ANE
9 1 5
9 9
2 1 3 5
SSN/EIN/Tax ID or Date of Birth
Primary Beneficiary’s Name (Last, First, Middle)/Trust/Estate/Legal Entity or Corporation
In the above example, if the primary beneficiary, Molly Jane Parket, dies before you do, Richard and Melissa Halt would each receive 50% of her share. In other words, if Molly Jane Parket’s share is 33% of your account balance, they would each get 50% of what Molly would have received — not 50% of your account.
EXAMPLE 4 Relationship to you: X
J AN I CE
Spouse
Other Individual
Trust
Estate
ROBSON
Name of Contingent: Individual (Last, First, Middle)/Trust/Estate/Legal Entity or Corporation
6 5 4 3
9 7 1
0 8
6 2 3 4
SSN/EIN/Tax ID
1 1
/
3 0
1 0 0%
/
1 9 8 3
Date of Birth (mm/dd/yyyy)
Name of Trustee/Executor (if applicable)
Foreign address? Check here.
Share:
Legal Entity/Corporation
ARKANSAS
DR I V E
Street Address or Box Number (For a foreign address, see instructions on Page I-1.) Street Address Line 2
I L
CH I CAGO
State
City
Contingent to which primary beneficiary?
J E ROME
WH E E L I S
TRUS T
Primary Beneficiary’s Name (Last, First, Middle)/Trust/Estate/Legal Entity or Corporation
6 0 6 0 1 – 1 7 4 8
Zip Code
SSN/EIN/Tax ID or Date of Birth
In the above example, if the primary beneficiary, the Jerome Wheelis Trust, is not in existence at the time of your death, Janice Robson would receive the entire share that you designated for the Jerome Wheelis Trust.
Page I-3
Check to make sure that:
You have provided your name and account number on each page.
You have had the same two witnesses sign and date all pages, including any extra pages, after you have signed and dated the form.
You have not altered this form or any information you provided on it.
If you named contingent beneficiaries, the shares for all contingent beneficiaries for each primary beneficiary add up to 100%.
You have kept a copy of your completed form (and any pages you may have added) for your records.
You have addressed this form to:
You have signed all pages you completed (including any extra pages you may have added) on the same date.
Your primary beneficiaries’ shares add up to 100%. If you named contingent beneficiaries, you named a primary beneficiary for each contingent beneficiary.
Thrift Savings Plan P.O. Box 385021 Birmingham, AL 35238
FORM TSP-3 (8/2010) PREVIOUS EDITIONS OBSOLETE
Important Forms 71
Form
PRIMARY BENEFICIARY DESIGNATIONS
72 The Complete Guide to Federal Employee Benefits
Form
CONTINGENT BENEFICIARY DESIGNATIONS
Important Forms 73
Form
Claim for Death Benefits
Claim for Death Benefits Federal Employees’ Group Life Insurance Program (Do not use this form to claim Option C-Family Benefits. Please use form FE-6 DEP to claim those benefits.)
Instructions General
The Office of Federal Employees' Group Life Insurance (OFEGLI) pays claims under the Federal Employees’ Group Life Insurance Program. “We” and “our” on this form refer to OFEGLI. “I” and “you” refer to the individual completing this form. FEGLI death benefits are not subject to Federal income tax, but the interest that we pay on those benefits is subject to such tax. We will report all interest payments to the Internal Revenue Service.
Who receives the death benefits?
We will pay benefits in the following order of payment: If the deceased assigned ownership of his/her life insurance to someone else (generally by filing an RI 76-10, Assignment form), then we will pay: First, to the beneficiary(ies) the assignee(s) validly designated; Second, if none, to the assignee(s). If the deceased did not assign ownership and there is a valid court order on file with the agency or OPM, as appropriate, we will pay benefits according to the court order. If the deceased did not assign ownership and there is no valid court order on file with the agency or OPM, as appropriate, then we will pay: First, to the beneficiary(ies) the deceased validly designated; Second, if none, to the deceased’s widow or widower; Third, if none of the above, to the deceased’s child or children and descendants of any deceased children (a court will usually have to appoint a guardian to receive payment for a minor child); Fourth, if none of the above, to the deceased’s parents in equal shares, or the entire amount to the surviving parent; Fifth, if none of the above, to the court-appointed executor or administrator of the deceased’s estate; Sixth, if none of the above, to the deceased’s other next of kin, entitled under the laws of the state where the deceased lived.
Don’t skip any questions you’re supposed to answer. That will delay our action on your claim. If a question doesn’t apply, write “N/A” or “not applicable”. If the answer is “No” or “Unknown”, write that. If you are completing this claim on behalf of someone else (such as a minor), complete items 1-3 of Part C with that person’s information, not yours. In part F and page 2, sign your own name “on behalf of ” the other person. Fill in your name, address and phone numbers. However, the Social Security Number should be the other person’s, not yours.
What else do I have to submit?
In addition to this claim form, you must submit a certified copy of the deceased’s death certificate that contains the cause and manner of death. (However, if you know for sure that another claimant is submitting the deceased’s death certificate, you don’t have to). You can get the certificate from your city or state’s Bureau of Vital Statistics or equivalent agency. We cannot process your claim until we receive the certified death certificate. Please submit an English translation of any foreign language death certificate. In addition, send us all Designation of Beneficiary Form(s) (SF 2823 and/or SF 54) that you may have which show the agency receipt date on the bottom. If you are an executor or administrator filing this claim on behalf of the deceased’s estate, send us a copy of the court appointment papers. We will let you know if we need anything else.
Where do I send this form and other documents?
If we are paying you $5,000 or more, we will open a money market account in your name and mail you a checkbook. You may write checks for some or all of the money in your account as soon as you receive the checkbook. See page 2 for details. . we are paying you less than $5,000, we will mail you a check. If
If the deceased was employed at the time of death Send everything to the deceased’s employing office. We will process your claim after we receive certification from the agency. However, if you are the deceased’s widow(er) and the agency told you to send your claim form and other documents directly to us, you should do that. Please include copies of any letters you received from the agency that mention death benefits. If the deceased was retired or receiving Federal Workers’ Compensation benefits at the time of death Send everything to OFEGLI, P.O. Box 6512, Utica, NY 13504-6512.
How do I complete this form?
Instructions to the employing agency
How will I receive benefits?
Please type or print legibly in ink. If you need help completing this form, call our service representatives, toll-free, at 1-800-OFE-GLIA (1-800-633-4542). Here is a summary of what parts of the form you must complete: Then Complete These Parts of the Form:
A
If you are a:
B
C
C
1-3
4-13
✔
Widow or Widower
All Others
Do NOT use previous editions
D
✔
E
✔
F
Page 2
✔
✔
Forward the completed claim, death certificate and court appointment papers, if any, to OFEGLI, P.O. Box 6512, Utica, NY 13504-6512, together with: 1. The original Agency Certification of Insurance Status (SF 2821); 2. The original Designation of Beneficiary form(s) (SF 2823 or SF 54), if any; 3. All court orders on file, if any; and 4. All other FEGLI forms (for example, SF 2817 or RI 76-27 election forms, RI 76-10 assignment form, etc.)
Page 1
Form FE-6 Revised May 2009 OFEGLI Form in Adobe Acrobat PDF (05/09)
IMPORTANT INFORMATION ABOUT
MONEY MARKET ACCOUNTS
AUTOMATIC • If we are paying you $5,000 or more, we will automatically open a money market account in your name and mail you the checkbook. If we are paying you less than $5,000, we will mail you a check. SAFE • The account earns interest starting the first day we open it. • Metropolitan Life Insurance Company guarantees the full amount in the account, including all interest. FREE • You pay nothing for this account. There are no monthly service charges or charges for checks. • You can write checks from $250 up to the full balance at any time. FLEXIBLE • You can withdraw all or part of your money at any time, with no penalty. • You can name a beneficiary for your funds, in case something happens to you.
We will send you detailed information about the account when we open one in your name.
SPECIAL NOTE Please complete, in ink, the information below and sign your name in the first box. We need this information to open a money market account. Even though you may be giving the same information elsewhere on this form, you must also give it here. We cannot process your claim without this information.
Your signature (Do not print)
Your name (Please print)
Address (Number, street, apt. no.)
City, state, ZIP code
Your Social Security Number OR Estate/Trust/Tax ID Number Date (mm/dd/yyyy)
Daytime telephone no.
Evening telephone no.
(
(
) Area Code
Do NOT use previous editions
) Area Code
Page 2
Form FE-6 Revised May 2009 OFEGLI Form in Adobe Acrobat PDF (05/09)
Office of Federal Employees’ Group Life Insurance P.O. Box 6512 Utica, NY 13504-6512
Claim for Death Benefits Federal Employees’ Group Life Insurance Program
Read the instructions carefully before filling out this form.
Part A. Information About the Deceased (Everyone must complete this part.) 1. Deceased’s full name
(Last)
(First)
(Middle)
2. Date of birth (mm/dd/yyyy)
3. Date of death (mm/dd/yyyy)
4. Social Security Number
5. Legal residence at time of death—(City and state)
6. Department or agency in which last employed, including bureau or division
7. Location of last employment (City, state, ZIP code)
8. At the time of death, was the deceased retired and receiving a monthly annuity under any Federal civilian retirement system ? Yes
No
Unknown
If “Yes”, provide the Claim number (CSA, CSF, CSI) _____________________________________ *Special Note: Social Security monthly payments are not Federal civilian retirement annuities.
9. At the time of death, was the deceased receiving Federal Worker’s Compensation benefits ? Yes
No
Unknown
If “Yes”, provide the effective date of Federal Workers’ Compensation benefits ________________ (mm/dd/yyyy)
Part B. Information About the Deceased’s Family (Everyone must complete this part.) 1. How many times was the deceased married?
2. Give the name of each spouse (include ALL marriages)
5. Did the deceased have any living children on the date of his/her death? Yes No If Yes, how many? ___________
❑
❑
3. How did the marriage end? (Check one in each case) Death
Divorce
Death
Divorce
Death
Divorce
4. When did the marriage end? (mm/dd/yyyy)
6. Did the deceased have any children who died before the date of his/her death? Yes No If Yes, how many? __________
❑
❑
Part C. Information About You (Everyone must complete items 1, 2 and 3.) 1. Your name
(First)
(Last)
(Middle)
2. Your relationship to the deceased
3. Your date of birth (mm/dd/yyyy)
Complete Items 4 through 13 only if you are the deceased’s widow or widower. 4. Date of marriage (mm/dd/yyyy)
5. Place of marriage (City and state)
7. Were you living with the deceased at the time of death?
8. Were you divorced from the deceased at the time of death?
6. Marriage was performed by: Clergy or Justice of the Peace Other (specify)
Yes
No
10. How many times were you married?
Do NOT use previous editions
Yes
9. If you were divorced from the deceased, give the date (mm/dd/yyyy) and place of the divorce.
No
11. Give the name of each spouse (include ALL marriages)
12. How did the marriage end? (Check one in each case)
Page 3
Death
Divorce
Death
Divorce
Death
Divorce
13. When did the marriage end? (mm/dd/yyyy)
Form FE-6 Revised May 2009 OFEGLI Form in Adobe Acrobat PDF (05/09)
Everyone must complete Parts D and E unless you are the deceased's widow or widower.
Part D. Information About the Deceased's Next of Kin
1. List below the name, age, relationship and address of : (a) Widow or widower; (b) If there is no surviving widow or widower, list the child or children of all the deceased's marriages (include adopted children and children born out-of-wedlock) and the descendants of any deceased child or children (use additional sheets if necessary);
Name
Age
(c) If there are no children, list the parents; if one or both parents are deceased, so state and give the date of death; (d) If there are no survivors in (a) through (c), list the next of kin who may be capable of inheriting from the deceased (brothers, sisters, descendants of deceased brothers, sisters, etc.). (Use additional sheets if necessary).
Relationship to the deceased
Full address
Fill in items 2 and 3 only if any of the persons listed above are under age 18. 2. If the court appointed a guardian for the estate of any minor children above, give the name and address of the guardian and attach a copy of the court appointment papers. Natural parentage or custody as a result of a divorce do not constitute guardianship.
Name
3. If the court did not appoint a guardian for the estate of any minor children, will it appoint one later?
Address (Number, street, apt. no.) City, state, ZIP code
Yes
No
Part E. Information About the Deceased's Estate 1. If the court appointed an executor or administrator to settle the deceased's estate, give his/her name and address and attach a copy of the court appointment papers.
Name
2. If the court did not appoint an executor or administrator, will it appoint one later?
Address (Number, street, apt. no.) City, state, ZIP code
Yes
No
Part F. Your Certification (Everyone must complete this part.) Are you claiming accidental death benefits (did the deceased die solely through violent, external, and accidental means)? If "Yes", submit coroners and police reports, news clippings, and any other available reports concerning the accident. OFEGLI cannot consider a claim for such benefits if the deceased separated or retired before the accident. If the amount payable to you is $5,000 or more, OFEGLI will open a money market account in your name, giving you complete control of and immediate access to all your funds. You may write checks for all or part of the money in your account when you receive your checkbook. See page 2 for more information, and be sure you complete the information on page 2 under "Special Note".
Yes
No
Your name (Please print) Address (Number, street, apt. no.) City, state, ZIP code Your Social Security Number OR
If the amount payable to you is less than $5,000, OFEGLI will send you a check.
_
Estate / Trust / Tax ID Number
_ _
Under penalty of perjury, I certify: 1. That the number shown on this form is my correct taxpayer identification number; and 2. That I am NOT subject to backup withholding because: (a) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends; or (b) the IRS has notified me that I am no longer subject to backup withholding. If you are currently subject to backup withholding, check this box: Yes No 3. I am a U.S. citizen or a U.S. resident for tax purposes. Check one If you are not a U.S. citizen or resident for tax purposes, we will send you a W-8BEN that you are required to complete to certify your foreign status. The IRS does not require your consent to any provision of this document other than the certifications required to avoid backup withholding. My signature (Do not print)
(
Area Code
)
( Daytime telephone no.
) Area Code
Evening telephone no.
Warning—If you knowingly and willfully make any materially false, fictitious or fraudulent statement or representation on this form, or conceal a material fact related to the requests for information on this form, you may be subject to a monetary fine or imprisonment for not more than five years, or both, under 18 U.S.C. 1001.
Print Form Do NOT use previous editions.
Save Form Page 4
Clear Form
Form FE-6 Revised May 2009 OFEGLI Form in Adobe Acrobat (05/09)
Important Forms 75
Form THRIFT SAVINGS PLAN ELECTION FORM
THRIFT SAVINGS PLAN
TSP-1
ELECTION FORM Use this form to start, stop, or change the amount of your contributions to the Thrift Savings Plan (TSP).
Before completing this form, please read the Summary of the Thrift Savings Plan and the instructions on the back of this form. Type or print all information. Return the completed form to your agency personnel or benefits office. Your agency should return a copy to you after completing Section V. Note: To choose your investment funds, see the instructions in the General Information section on the back of this form.
I. INFORMATION ABOUT YOU
1. 2. 3. 5.
Name (Last)
(First)
Street Address
City
–
Social Security Number
State
4. (
–
(Middle)
)
Zip Code
–
Daytime Phone (Area Code and Number)
Office Identification (Agency and Organization)
II. START OR CHANGE YOUR CONTRIBUTIONS
To start or change the amount of your contributions to your TSP account, enter either a whole percentage of your basic pay per pay period (Item 6) or a whole dollar amount per pay period (Item 7). Skip to Section IV.
III. STOP YOUR CONTRIBUTIONS
To stop your contributions to the TSP, check Item 8 and complete Section IV. (If you are a Federal Employees’ Retirement System (FERS) employee, your Agency Matching Contributions will stop, but Agency Automatic (1%) Contributions will continue. Read the instructions on the back.)
6.
.0%
7. $
OR
.00
8.
I choose not to save for my retirement. Please stop my payroll contributions to my TSP account.
Your payroll contributions will stop no later than the first full pay period after your agency employing office receives this form. If you are a newly hired (or rehired) employee, you can generally stop your automatic employee contributions before they start if you submit this form to your agency before the end of your first full pay period. (See note on back.)
IV. SIGNATURE
9. Participant’s Signature
V. FOR EMPLOYING OFFICE USE ONLY
11.
14.
Payroll Office Number
10.
/
/
13.
/
/
Date Signed (mm/dd/yyyy)
12.
/
/
Receipt Date (mm/dd/yyyy)
Effective Date (mm/dd/yyyy)
Signature of Agency Official
PRIVACY ACT NOTICE. We are authorized to request the information you provide on this form under 5 U.S.C. chapter 84, Federal Employees’ Retirement System. We will use this information to start, change, or stop your TSP contributions. In addition, this information may be shared with other Federal agencies for statistical, auditing, or archiving purposes. We may share the information with law enforcement agencies investigating a violation of civil or criminal law, or agencies implementing a statute,
rule, or order. It may be shared with congressional offices, private sector audit firms, spouses, former spouses, and beneficiaries, and their attorneys. We may disclose relevant portions of the information to appropriate parties engaged in litigation and for other routine uses as specified in the Federal Register. You are not required by law to provide this information, but if you do not provide it, we will not be able to process your request.
ORIGINAL TO PERSONNEL FOLDER Provide a copy to the employee and to the payroll office.
Form TSP-1 (8/2010) PREVIOUS EDITIONS OBSOLETE
INFORMATION AND INSTRUCTIONS GENERAL INFORMATION
You may start, stop, or change your contributions at any time. Your TSP election will stay in effect until you submit another election or until you leave Federal service. (This form only applies to regular contributions. If you are age 50 or older and want to make or change catch-up contributions, use Form TSP-1-C, Catch-Up Contribution Election.) Important note for new TSP participants: All contributions to your account will be invested in the Government Securities Investment (G) Fund until you direct the TSP to allocate your contributions differently. The TSP publication Summary of the Thrift Savings Plan describes all of your investment choices and discusses their risks and advantages. For more information, you can also obtain a copy of the TSP Fund Information sheets. (The most current versions of TSP forms and publications are available on the TSP website at www.tsp.gov.) To choose your investment fund(s), use the TSP website (www.tsp.gov), the ThriftLine at 1-TSP-YOU-FRST (1-877968-3778; outside the U.S. and Canada, call 404-233-4400), or Form TSP-50, Investment Allocation, which you can obtain from your agency or by calling the ThriftLine. If you use the ThriftLine, you will need your TSP account number and your 4-digit ThriftLine Personal Identification Number (PIN). If you use the TSP website, you will need your TSP account number (or user ID) and 8-character Web password. If you are a new participant, your TSP account number, ThriftLine PIN, and Web password will be mailed to you (separately) after your account has been established. If, as a new participant, you choose to submit Form TSP-50, do not do so until you receive a letter from the TSP confirming that your new account has been established. If your account has not been established, your request will not be processed. If you change your address, notify your agency immediately so that your agency can correct your records for your TSP account.
SECTION I
Complete all items in this section.
SECTION II
Complete this section to start your TSP contributions or to change the amount you are contributing to the TSP. Complete either Item 6 or Item 7. Item 6, Percentage of Basic Pay per Pay Period. You may contribute up to the Internal Revenue Code (IRC) annual elective deferral limit ($16,500 in 2010). Since the elective deferral limit may be adjusted annually for inflation, check the TSP website for the most current information. If you specify a percentage, your contribution amount will automatically increase when you receive a pay raise. Item 7, Dollar Amount per Pay Period. The dollar amount you contribute cannot exceed the annual elective deferral limit for the year. You can contribute as little as $1 per pay period. If you specify a dollar amount, it will not change until you submit a new Form TSP-1.
SECTION III
Complete this section to stop your contributions. You may restart your contributions at any time. FERS employees: Your Agency Automatic (1%) Contributions will continue after you stop your employee contributions, but you will no longer receive valuable Agency Matching Contributions. (If you restart your contributions, the Matching Contributions will resume.) You may change the way your Agency Automatic (1%) Contributions are invested even if you are not contributing to your account. You can use the TSP website, the ThriftLine, or Form TSP-50, as described in ‘‘General Information’’ above. Note for newly hired or rehired FERS or CSRS employees: As a new employee, your agency automatically deducts 3 percent of your pay, tax deferred, and deposits the money in your TSP account for your retirement savings. You can stop your automatic employee contributions before they start if you submit this form to your agency before the end of your first full pay period, subject to your agency’s processing deadlines. If your agency has already begun to deduct your automatic employee contributions from your pay each pay period, you are entitled to request a refund of your initial contributions by submitting Form TSP-25, Automatic Enrollment Refund Request. The TSP must receive this form within 90 days of your first contribution.
SECTION IV
You must complete this section.
SECTION V
In Item 12, enter the receipt date. This is the date that a properly completed form is received by the agency personnel office. If the form has not been properly completed, it should be returned to the employee.
(To be completed by personnel or benefits office)
In Item 13, enter the effective date of the election. Requests must be processed immediately for new and rehired employees who want to stop automatic enrollment before it begins. This will help avoid a payroll deduction that may have to be refunded. Other elections should be made effective no later than the first full pay period after receipt of a properly completed form. You should provide the participant with a copy of this completed election for his or her records.
Form TSP-1 (8/2010) PREVIOUS EDITIONS OBSOLETE
76 The Complete Guide to Federal Employee Benefits
Form Federal Employees’ Group Life Insurance (FEGLI) Program Designation of Beneficiary
Print Form
Save Form
Clear Form
Examples of Designations
(DO NOT erase or cross-out. Use a new form.)
Keep Your Designation Current. Submit a New One If the Address oh tO8in9eneficiarie AdChange a One
About Government Benefit Advisors
We’re Here to Help At Government Benefit Advisors, we know how difficult it can be to navigate the benefits and programs available to today’s federal employees. There are retirement plans and annuities, savings options and healthcare plans, dental coverage and myriad other benefits at your avail. But how do you know that you’re making the best possible choices for the present and the future, and for yourself, your family and your heirs? That’s where Government Benefit Advisors comes in. We help federal employees like you understand their pay, benefits and financial options in a way that helps them live more comfortably now, and plan more efficiently for their futures. With very few Americans actually prepared to support themselves through retirement, isn’t it time you enlisted help in planning for your own future? Here are a just a few of the services that we offer:
* Personalized consultations * Critical reviews of both past, current and future options * Financial planning assistance * Solid advice and information provided by a staff armed with decades of experience working with government benefits * Annual checkups If you’re one of the federal employees who hasn’t been adequately informed about your benefits options, or if you feel that you could be “getting more” from the package of options being offered by Uncle Sam, we can help. Maybe you don’t understand your paycheck codes, or perhaps you don’t feel comfortable selecting from the 10 different annuity options within your Thrift Savings Plan.
78 The Complete Guide to Federal Employee Benefits
Whatever your needs, we can fulfill them while also offering you additional support and assistance across your entire benefits package. Government Benefit Advisors’ mission is straightforward: we want to maximize your financial security through better understanding of your benefits. We serve as an extension of your agency’s Human Resources department by delivering relevant, important information that you need to make the best possible financial decisions. If you’re ready to learn more about our services and how they can help you get the benefits that you deserve, visit us online at www.governmentbenefitadvisors.com. We look forward to working with you!
About the Author
R
ussell Armstrong has spent decades deciphering the tangled web of government benefits and helping individuals like you pave their way to successful careers, life transitions and retirements. A Chartered Government Benefit Advisor, Russell is president of Government Benefit Advisors, a firm that’s dedicated to helping its clients strategically manage their government benefits. GBA assists federal employees with critical benefits knowledge and financial planning. Using one-on-one meetings, annual checkups and in-depth consultations, the firm helps its clients understand their benefits and maximize their opportunity for financial security. Acting much like a “proactive” Human Resources department, GBA also provides an array of products and services designed to enhance clients’ financial portfolios. Over the years, Russell has helped thousands of federal employees plan for their retirement using pensions, benefits and savings options that are available to such workers and their families. Unfortunately, he’s heard many stories of hardship from clients who were unaware of their benefits options. “It’s a shame that most federal employees have no idea what their pensions will be when they retire,” Russell says. “The number one comment I hear after I’ve enlightened an employee is, ‘why didn’t I come to you for help years ago?’ The author also trains other benefit consultants across the country, and resides with his family in the Northern Chicago suburbs.
