Expert's View

Reg Jones

Whether or not you followed the advice to begin retirement preparations well in advance, at some point just ahead of the event you’ll be coming down to the wire. That’s around now or will come soon for many federal employees, given the popularity of retiring late in the calendar year.

Before you submit your retirement application – and even if you’ve already submitted it – you need to take a deep breath and check to see if you’ve covered all the bases. Here are a few of the key ones.

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Creditable civilian service

Have you claimed credit for all your periods of civilian service? You won’t be the first person to lose credit for periods of employment before you became a federal employee (or even during a break in service).

For example, have you been a Peace Corps or as a VISTA volunteer, a Non-Appropriated Fund (NAF) Instrumentality employee, engaged in certain contract services or been employed by other contributory retirement systems, such as the Tennessee Valley Authority? If you have, by making a deposit to the CSRS or FERS retirement system – or having contributions you made to the other system transferred over – your retirement annuity might be a lot larger than you had anticipated. To find out about these and other kinds of creditable service, go to https://www.opm.gov/retirement-services/publications-forms/csrsfers-handbook/c020.pdf.

Creditable military service

Have you gotten credit for active duty service in the U.S. armed forces? Whether you served on active duty before or after you became a government employee, you can get credit for that time in determining your length of service. To learn more about this form of creditable service, go to https://www.opm.gov/retirement-services/publications-forms/csrsfers-handbook/c022.pdf.

Depending on when that service occurred, you may or may not have to make a deposit to get credit for that time. To find out which situation would apply to you, go to https://www.opm.gov/retirement-services/publications-forms/csrsfers-handbook/c022.pdf.

Health insurance

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Are you enrolled in the Federal Employee Health Benefits (FEHB) program? Most employees are. If you are one of them and are planning to retire, you need to be aware of the 5-year rule. To carry that FEHB coverage into retirement, you have to be enrolled in the program for the 5 consecutive years before you retire or from your first opportunity to enroll. If you meet that requirement, your coverage will continue and your premiums will be the same as they were when you were an employee.

On the other hand, if you decide to retire, haven’t met that requirement, and haven’t been offered an early retirement opportunity by your agency, you’ll be given 31 days of coverage at no cost to yourself. After that you’ll have the option of continuing in that plan (or another plan of your choice) under the Temporary Continuation of Coverage (TCC) provision for up to 18 months. If you do, you’ll pay 100 percent of the premiums, plus 2 percent to cover the administration cost incurred by your agency. After that, you’re on your own.

Life insurance

The 5-year or first opportunity to enroll requirements also applies to the Federal Employees’ Group Life Insurance (FEGLI) program. Assuming that you meet that requirement, your Basic coverage will continue at the same level you had when you retired, and it will stay at that level until the end of the calendar month that follows your 65th birthday. If you elect to let the level of coverage decline to 25 percent of its face value, you will no longer have to pay the premiums. On the other hand, if you want to keep it at its full value or elect a 50 percent reduction, you’ll have to continue paying the premiums for that level of coverage. Elections may also be made at retirement about any coverage you have under Options A, B, and C.

If you aren’t eligible to carry your life insurance into retirement, you’ll receive a 31-day premium-free extension of coverage for your Basic insurance. You will also be offered an opportunity to enroll in a private sector plan for which you’d pay the entire premium.

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Other insurance

Coverage under the Federal Dental and Vision Insurance Plan continues into retirement with no 5-year rule and (unlike in the FEHB) retirees further can newly enroll during the annual open season each autumn.

Coverage under the Federal Long-Term Care Insurance Program similarly continues with no length of coverage requirement, and retirees also can apply to newly enroll in that program.

Note: Retirees are not eligible for two tax breaks for active employees: flexible spending accounts and pre-tax payment of premiums in the FEHB and FEDVIP programs.

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