# Presentation: 665781

## Retirement and OWCP Best Practices, Tools, and Techniques For Effective OWCP Case Management

- presented by
- Elaine Lumsden

## Background & Responsibilities

- CSRS - Developed in 1920’s
- FERS - Became effective January 1, 1987
- OPM has overall responsibility for administering CSRS and FERS
- Agencies bear overall responsibility for the quality and timeliness of submissions to OPM

## CSRS Retirement Eligibility

- Employees are eligible for retirement if the following conditions are met:
- Age & service requirement;
- Minimum creditable civilian service requirement;
- Separate from a position subject to retirement contributions; and
- Meet “1 out of 2” requirement

## CSRS Voluntary Retirement 

- Minimum Age   	Service Requirement
- 	55				30 Years
- 	60				20 Years
- 	62 	  			  5 Years
- A CSRS employee must have at least 5 years of creditable civilian service for any retirement option.

## CSRS Special Provisions

- Minimum Age   	Service Requirement
- 	50				20 Years*
-  *20 Years Special Coverage as a Law  Enforcement Officer/Fire Fighter.
- Does not have to be in a LEO/FF covered position    at the time of retirement.
- Mandatory retirement at age 57 with 20 years special provision service

## CSRS Early Out/Discontinued Service

- Minimum Age   	Service Requirement
- 	50				20 Years
- 	Any				25 Years
- There is a permanent penalty reduction of 1/6  of one percent for each full month retiree is under age 55 (2% for each full year.)

## CSRS Disability Retirement

- Minimum Age   	Service Requirement
- 	Any				5 Years
- Covered by and disabled while subject to retirement contributions
- Document disability criteria
- Periodic medical review may be required
- If found medically recovered or restored to earning capacity

## CSRS Deferred Retirement

- Minimum Age   	Service Requirement
- 	62				5 Years
- Employees must not take a refund of their retirement contributions upon leaving federal service or they forfeit any future retirement benefit unless they return to federal service.

## FERS Retirement Eligibility

- Employees are eligible for retirement if following conditions are met:
- Age & service requirement;
- Minimum creditable civilian service requirement;  and
- Separate from a position subject to retirement contributions.

## FERS Voluntary Retirement

- Minimum Age   	Service Requirement
- 	MRA			   30 Years
- 	   60			   20 Years
- 	   62 	  		    5 Years
- Employees must have at least 5 years of creditable civilian service for any type of retirement except disability for which the service requirement is only 18 months.

## Minimum Retirement Age (MRA)

- If Year of Birth Is...	The Minimum Retirement Age Is...
- Before 1948		55 years
- 		1948			55 years and   2 months
- 		1949			55 years and   4 months
- 		1950			55 years and   6 months
- 		1951			55 years and   8 months
- 		1952			55 years and 10 months
- 		1953 to 1964		56 years
- 		1965			56 years and   2 months
- 		1966			56 years and   4 months
- 		1967			56 years and   6 months
- 		1968			56 years and   8 months
- 		1969			56 years and 10 months
- 		After 1969		57 years

## FERS MRA + 10

- Minimum Age   	Service Requirement
- 	MRA				10 Years
- There is a permanent penalty reduction of  5/12’s of one percent for each full month   retiree is under age 62 (5% for each full year.)  Retiree can postpone retirement   commencement date to reduce penalty.

## FERS Special Provisions

- Minimum Age   	Service Requirement
- 	50			20 Years*
- 	Any Age			25 Years**
-  *20 Years Special Coverage as a Law  Enforcement Officer/Firefighter.
- **25 Years Special Coverage as a Law Enforcement Officer/Firefighter.
- Does not have to be in a LEO/FF covered position at the time of retirement.
- Mandatory retirement at age 57 with 20 years special provision service

## FERS Early Out/Discontinued Service

- Minimum Age   	Service Requirement
- 	50				20 Years
- 	Any				25 Years
- There is NO penalty reduction if retiree is   under age 55.

## FERS Disability Retirement

- Minimum Age   	Service Requirement
- 	Any				18 Months
- Covered by and disabled while subject to retirement contributions
- Document disability criteria
- Periodic medical review may be required
- If found medically recovered or restored to earning capacity

## FERS Deferred Retirement

- Minimum Age   	Service Requirement
- 	   62			      5 Years
- 	MRA			     10 Years
- Employee must not take a refund of their retirement contributions upon leaving federal service or they forfeit any future retirement benefit unless they return to federal service.

## Questions???

- Retirement Eligibility

## Electing OWCP or OPM Annuity

- Must elect between OWCP compensation or OPM annuity.  If OWCP is elected, OPM will put annuity payable into suspend status
- Can switch between compensation and OPM annuity at any time
- OWCP generally provides a greater benefit

## Annuity Suspended – Return to Work

- If OPM disability annuity has not ended due to recovery (medical or administrative) or restored to earning capacity, they will be subject to rules governing re-employed annuitants

## Annuity Suspended - Return To Work

- If a re-employed annuitant
- Time on comp rolls does not count unless they work an additional 5 years and elect a re-determined annuity.
- Can earn a supplemental or re-determined  annuity only if retirement deductions are  withheld from earnings

## Supplemental or Re-determined Annuity?

- Supplemental annuity is earned by completing 1 year of full-time service or its equivalent in part-time service
- Entitled to re-determined annuity if  employed for 5 years of full-time service or its equivalent in part-time service

## Annuity Suspended - Return To Work

- If disability annuity ends when rehired:
- Must establish new title to an annuity based on the latest period of retirement-covered employment including all time on OWCP rolls.
- A former disability annuitant who with the crediting of all OWCP time, meets optional retirement eligibility, may     transfer to FERS and retire as soon as the FERS transfer is effective.  (If no transfer to FERS is made, the employee must work at least 1 year to meet the 1-out-of-2 year eligibility requirement under CSRS.)

## No Annuity In Suspend Status - Return To Work

- Time on OWCP rolls is creditable for retirement purposes as follows:
- Credit for all periods in non-pay status.  Six months per calendar year rule does not apply  for OWCP
- Credit granted during separation if return to Federal Civilian service, even if returned to part-time duty status

## Computing High-3 Average Salary

- If returned to work and work less than three years, use the full-time rate at the time compensation was awarded (adjusted by regular pay raises)
- DO NOT use any compensation paid to a rehired employee that supplements the difference in compensation and salary actually earned

## Computing High-3 Average Salary

- If compensationer did not return to work,   and had a disability annuity in suspend  status, annuity will be based on the individual’s service and high-3 average  salary as of date of separation, plus all applicable COLA’s

## Questions???

- Rehired vs Re-employed Annuitant

## Federal Employees’ Health Benefits and OWCP

- Best Practices, Tools, and Techniques For Effective OWCP Case Management

## Eligibility to Continue FEHB While Receiving OWCP

- FEHB will continue:
- For up to 365 days in non-pay status **unless** separated from agency
- When enrollment is transferred to OWCP, OWCP must determine if Compensationer meets 5 year requirement and is unable to  return to duty

## Premium Withholdings and Contributions

- OWCP makes withholdings and contributions whether the enrollment is transferred to  OWCP unless employee receives compensation for less than 29 days, then agency is responsible
- Withholdings and contributions begin when  the compensationer’s benefits begin, or the date the employing offices’ withholdings and contributions ended, whichever is later

## Premium Withholdings and Contributions

- Continued
- If compensation lasts longer than 29 days,  the enrollment is transferred to OWCP if:
- OWCP requests the enrollment;
- 10 months on LWOP has elapsed without OWCP requesting the transfer; or
- Employee separates before OWCP requests    the transfer

## Premium Withholdings and Contributions

- Continued
- OWCP normally requests transfer if compensation is payable for 6 months or longer
- Enrollment must be transferred to OWCP if compensation will continue beyond 365 days of continuous LWOP

## OWCP Transfers FEHB Enrollment Back To Agency

- When:
- Compensationer returns to full-time duty and pay status
- Compensation ends, and employee doesn’t return to duty, employee’s  enrollment continues for 365 days after date compensation ends.  If employee is not eligible for continued coverage, agency must terminate enrollment

## OWCP Transfers FEHB Enrollment Back To Agency

- Continued
- When compensation does not end before  employee returns to full-time duty and pay status.
- If Compensationer returns to duty part-time, enrollment stays with OWCP for as long as compensation is payable.

## Electing OPM Annuity In Lieu Of OWCP Compensation

- If compensationer’s enrollment has been transferred to OWCP, OPM will request transfer from OWCP
- If compensationer is still on agency rolls      in LWOP, agency must note under Remarks on Individual Retirement Records (IRR)    that enrollment was transferred to OWCP, and send IRR to OPM.

## Questions???

- Health Insurance

## Federal Employees’ Group Life Insurance and OWCP

- Best Practices, Tools, and Techniques For Effective OWCP Case Management

## Eligibility to Continue FEGLI While Receiving OWCP

- Basic insurance coverage continues.
- Premiums are withheld from compensation payments up to 12 months in LWOP or to     date of separation, whichever is earlier.
- OWCP will not withhold premiums if receiving compensation for less than 29 days.

## Eligibility to Continue FEGLI While Receiving OWCP

- Optional insurance coverage continues for up to 12 months in LWOP.
- Premiums withheld from compensation  unless  receiving compensation for less than 29 days.
- Coverage terminates due to 12 months LWOP or separation.
- OWCP determines if unable to return to duty,
- OPM determines if 5 year rule is met, and
- He/she does not convert to a private policy.

## Continuation of FEGLI Coverage After Termination

- Upon termination of coverage, give compensationer an SF-2819, Notice of Conversion Privilege.
- If Compensationer wants to continue coverage, HRM will complete SF-2821, Agency Certification of Insurance Status.
- Designation of Beneficiary & all previous coverage elections, along with completed Continuation of Life Insurance Coverage (SF-2818) are sent to OPM.

## Continuation of FEGLI Coverage After Termination 

- Continued
- OPM will contact OWCP to verify that the compensationer is receiving compensation and is unable to return to duty.
- OPM will notify compensationer whether he/she remains insured.

## Amount & Cost Of Insurance      As A Compensationer

- Value of insurance will remain the same as the value at separation from service.
- Cost of basic and optional is same as for retirees.
- Up to age 65, cost will be that applicable to employees.  At age 65, basic insurance cost depends on the after age 65 election.
- Compensationer makes a 75%, 50%, or no reduction election in basic insurance amount.

## Termination of FEGLI Coverage As A Compensationer

- Insurance terminates when compensation stops and the employee is unable to return to duty.
- Insurance terminates when employee is able to return to duty but does not.
- Insurance will not terminate if former compensationer is entitled to coverage as an annuitant or re-employed annuitant.

## FEGLI When Compensationer Returns To Duty

- Employee returns to duty, even on part-time basis, agency withholds FEGLI premiums.
- If a compensationer dies as a re-employed annuitant, FEGLI is payable based on the higher amount of coverage Compensationer had as an employee or as an annuitant.
- If compensationer dies as an employee but not a rehired annuitant, FEGLI is based on pay at death.

## More FEGLI

- Assignment of FEGLI
- Living Benefits
- Incontestability

## Questions???

- Life Insurance

## Thrift Savings Plan and OWCP

- Best Practices, Tools, and Techniques For Effective OWCP Case Management

## Effect Of Non-Pay Status  For Compensationers And TSP

- Compensationer cannot:
- Contribute to TSP account
- Makeup missed TSP contributions
- Compensationer may:
- Make TSP inter-fund transfer elections
- Make In-Service Withdrawals

## Compensationers’ TSP Loan Entitlement

- Compensationer is not eligible to receive a  TSP loan
- Compensationer with TSP loan will have missed loan payments
- TSP Board must be notified when employee    is placed in an approved non-pay status
- If returned to pay status within 90 days, loan payment schedule will be extended

## Compensationers’ TSP Loan Entitlement 

- Continued
- If compensationer returns to pay status after 90 days or more, so that loan payments can be resumed within one year, the loan must   be re-amortized.  If not, the loan must be   pre-paid in full, or a taxable distribution will be declared

## Compensationers’ TSP Loan Entitlement

- Continued
- If compensationer does not return to duty after 90 days or more of approved non-pay status, and loan payments cannot be   resumed within one year, loan must be pre-paid in full at the end of  the first year of  non-pay status or be subject to a taxable distribution

## Compensationers’ TSP Loan Entitlement

- Continued
- If he/she does not return to pay status after  90  days or more of unapproved non-pay status, employee must re-amortize the loan  or pre-pay in full.  If neither, a taxable distribution is declared

## Questions???

- TSP
- Need more information, contact Elaine at _[elaine@elumsden.com](mailto:elaine@elumsden.com)__ _or* *_[www.elumsden.com](http://www.elumsden.com/)__ _