Expert's View

At the turn of the year, I wrote an article about the changes in benefits for 2010. Now, at last, OPM has gotten around to officially confirming what I wrote, and adding a few items that escaped my notice. I thought it would be worth your time to review both the old and the new.

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First, if you are an employee, there was a 2.5 percent increase in pay, with .5 percent being allocated through locality pay adjustments.

Second, if you are a retiree or survivor, you didn’t get any cost-of-living adjustment; nor did you get one if you are receiving Social Security benefits.

Third, there were a host of benefits and caps that remained unchanged from 2009 to 2010:

* Children’s benefits. If a child has a living parent who was married to an employee or retiree, the monthly payment continues to be the lesser of $469 per child or $1,409 divided by the number of eligible children. If there isn’t any living parent, the monthly amount is the lesser of $563 per child or $1,691 divided by the number of eligible children.

* FERS basic employee death benefit. That amount remains at $29,722.95.

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* The Social Security maximum taxable wage. It’s still $106,800.

* The Social Security earnings limit from wages and self-employment. Holding steady at $14,160, it affects both FERS retirees who are receiving the special retirement supplement and Social Security beneficiaries who haven’t yet reached their full retirement age, which ranges between 65 and 67. 

* The TSP elective deferral limit. Still holding at $16,500 for tax year 2010.

* TSP catch-up contributions limit. Unchanged at $5,500

Other items of interest include a website where employees whose salaries have been capped can learn what the biweekly limits are for their geographic area. You’ll find it at www.opm.gov/oca/pay/HTML/10GSCap.asp. Not only do these caps affect the amount of your salary, they also affect your future retirement benefits, which are based on retirement deductions taken from the capped amount, not the full amount.

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If you are considering making a deposit for your active duty time in the armed forces, you are reminded that for most years, the deposit to get credit is 7 percent of your military base pay for CSRS and 3 percent for FERS. However, for service performed in 1999, it’s 7.25 percent and 3.25 percent, and in 2000, it’s 7.40 and 3.40. As always, deposits must be paid in full to the employing agency before retiring.

If you are retired military, as a rule you must not only make a deposit for that time but waive your military retired pay to get credit in determining your eligibility to retire from your civilian job and in your annuity computation. To do that, you’ll have to send a letter to the Defense Finance and Accounting Service, U.S. Military Retired Pay, London, KY 40742-7130 at least 30 days before you retire.