Retirement Misenrollments

Last week, I spelled out the rules governing whether you are covered by CSRS, CSRS Offset or FERS. It all seems so simple. However, in those tumultuous times following December 31 1986, a lot of mistakes were made by personnel offices and far too many employees ended up in the wrong retirement system.

It may sound ridiculous, but 30 years after FERS went on line, there are still employees who are in the wrong retirement system and are only now having their records corrected. If you haven’t either worked continuously for the government since 1983 or have had changes in your appointment type or retirement plan, you need to ask your agency to make sure that the retirement system you are in is the right one. If a change is necessary it will be made under the Federal Erroneous Coverage Corrections Act (FERCCA).

If you have been put in the wrong retirement system, the FERCCA law provides you with one or all of the following:

• a choice between retirement systems;

• an opportunity for make-up contributions to your Thrift Savings Plan account;

• lost earnings on make-up contributions already made as well as those made in the future;

• payment for certain expenses and losses related to correction of your retirement coverage; and

• an opportunity to receive credit for civilian or military deposit service by taking an actuarial reduction in your retirement benefit instead of making a deposit.

Of course, the range of these options depends on what the coverage error was and how long you were in the wrong retirement system. For example, FERRCA won’t apply if:

• you worked under the wrong plan for less than three years after December 31, 1986;

• you belonged in FERS and your agency corrected your records when it discovered the error and you left government and asked for a refund of your FERS retirement contributions; or

• you belonged in FERS and you agency corrected your records when it discovered the error and you chose to withdraw your TSP contributions.

In addition, FERCCA won’t apply if you received a payment ordered by a court or provided as settlement of a claim for losses resulting from a retirement coverage error. In that case, you won’t be allowed to make a coverage election unless you repay the amount you received from OPM or OPM waives the repayment.

Next week, I’ll explain the kinds of service that are considered creditable when calculating your years of service, one of the two basic elements that determine your eligibility to retire.