Civil Service Federal Employees Federal Employees Federal Employees

Retirement Group Life Health Benefits Retirement

System Insurance Program System

United States

Office of Personnel Management

Retirement and Insurance Service

Benefits Administration Letter

Number: 99-101 Date: January 6, 1999

Subject: Common Problems Encountered in Documentation for Retirements Under the

Federal Employees Retirement System (FERS)

This Benefits Administration Letter (BAL) shares information on some of the problems OPM has

encountered with FERS applications for retirement and survivor benefits, and supporting

documentation, and suggests ways to avoid these problems. When we do not receive the correct

application or all of the documentation needed to process a retirement claim, we must obtain the

missing information. In each instance where this occurs, the primary result is a delay in

authorizing payments to the applicant. We believe the attached information will eliminate any

confusion that may still exist concerning the proper application to use and the documentation

required in support of an application for retirement or survivor benefits.

Attachment 1 contains 13 sections, which outline specific problems we have encountered, as well

as suggestions on how to avoid the problem. Each section also provides the appropriate

CSRS/FERS Handbook reference(s). The sections cover the following subjects:

Section Number Subject

Section 1 FERS Disability and Social Security Benefits

Section 2 FERS Retirements and OWCP

Section 3 FERS Disability Retirements Involving Deposits and Redeposits for Civilian

Service

Section 4 The Last Day of Pay in FERS Disability Retirements

Section 5 Post-1956 Military Service Deposit

Section 6 Commencing Date of FERS Annuities

Section 7 Forms-Applications for Death Benefits

Section 8 FERS Death-in-Service With Basic Employee Death Benefit Payable - Deceased in

Additional Pay Status (APS) at the Time of Death

Section 9 Life Insurance Eligibility

Section 10 Documenting Part-Time Service

Section 11 Requirements for Retiring With 5 Years of Service

Section 12 Crediting Sick Leave With a CSRS Component

Section 13 Federal Employees Health Benefits (FEHB) Documentation
Civil Service Federal Employees Federal Employees Federal Employees

Retirement Group Life Health Benefits Retirement

System Insurance Program System

Attachment 2 contains two handouts that should be shared with employees contemplating

disability retirement. They are “FERS Disability Facts” and “FERS Disability Computation

Facts”. The handouts provide important information on FERS disability retirement. We have

learned over time that there is still quite a bit of confusion surrounding certain aspects of FERS

disability retirement. We believe the two handouts will help potential disability retirees better

understand all aspects of FERS disability retirement.

We hope that by working together, we can eliminate many of the problems that cause delays in

processing and improve the timeliness of service provided retirees and survivors.

Sidney M. Conley

Assistant Director for

 Retirement Programs
FERS DISABILITY AND SOCIAL SECURITY BENEFITS

Problem The most frequent Social Security problems that occur in FERS disability

cases are:

• No documentation that the retiree has applied for SOCIAL SECURITY

DISABILITY benefits is provided with the retirement application.

• Incomplete or incorrect Social Security documentation is provided with

the retirement application.

• Retirees fail to keep OPM informed of changes in their Social Security

disability status. A change in Social Security disability status can affect

the retiree’s payment.

Each of these situations can result in delayed payment and/or overpayment of

benefits.

Rules • FERS disability benefits must be reduced when a retiree receives

SOCIAL SECURITY DISABILITY benefits.

• FERS disability applicants must apply for SOCIAL SECURITY

DISABILITY benefits upon separating from their agency.

• OPM must receive a copy of the SSA application receipt and a copy of the

notice of approval (providing the effective date and monthly gross) or

disapproval of SOCIAL SECURITY DISABILITY benefits.

NOTE: Supplemental Security Income (SSI) benefits from the Social

Security Administration do not have any effect on FERS disability benefits.

OPM only needs information about Social Security Disability benefits.

Example Proof that the employee has applied for SSA DISABILITY benefits is not

submitted along with the application for retirement.

Action by OPM

and Agency

OPM must contact SSA and confirm whether the retiree has applied for

Social Security disability benefits. OPM must contact the retiree and request

that the retiree file for SSA disability benefit, if it’s determined that they have

not applied already. OPM must wait for confirmation before completing the

processing of the retiree’s application for retirement. Failure to receive this

information could also impact the retiree’s interim annuity payments.

Continued on next page
FERS DISABILITY AND SOCIAL SECURITY BENEFITS, continued

How to Avoid

the Problem

The agency should inform the employee of the requirement to apply for SSA

disability benefits, that OPM must receive proof that the employee has

applied, and that a copy of the SSA award or disapproval notice should be

sent to OPM as soon as possible after it is received.

• A denial based on gainful employment is not adequate information for

OPM. Usually this means the employee was still in a pay and duty status

when he/she applied for Social Security benefits. If the employee is

denied for gainful employment he/she must reapply to SSA after

separation.

• A verbal denial from Social Security is not acceptable proof of application

or a denial of SSA benefits. The retiree must insist upon receiving a

written notice of receipt of the application and a formal denial letter.

The agency should make sure the employee understands the importance of

keeping OPM informed of changes in Social Security disability status and the

effect Social Security has on FERS disability annuity. This is very important

because FERS disability annuity is subject to SSA offset until the retiree's

62nd birthday.

NOTE: The employee should also know that if SSA makes a retroactive

award of disability benefits, OPM cannot adjust the FERS disability annuity

until notified of the gross monthly amount and effective date of the SSA

disability benefit. The employee should also be told that any retroactive

payment from SSA will cause an overpayment of FERS disability annuity and

that they should set aside a portion of any retroactive SSA award because

OPM will be contacting them concerning recovery of the FERS annuity

overpayment.

CSRS/FERS

Handbook

References

Chapter 60, Part B2, Section 1-1.

Chapter 60, Part B6, Section 1-3.

See the two handouts in Attachment 2. Reproduce and give them to

employees considering FERS disability retirement.
FERS RETIREMENTS AND OWCP

Problem 1 OPM receives retirement packages for individuals who have also applied for

or are receiving compensation from the Office of Worker’s Compensation

(OWCP) with no documentation indicating the current status of the OWCP

application or award.

Rule 1 FERS retirees cannot receive total or partial disability benefits (nonscheduled compensation) from the Office of Workers’ Compensation and

FERS annuity at the same time. It is very important that the most current

information on the status of the OWCP application or award be provided with

the retirement package. No payment can be made until we know the current

status of the application or the award.

Example 1 In January an individual files for FERS retirement and OWCP benefits

simultaneously. The applicant completed the Schedule C, Federal

Employees’ Compensation Information section on the SF 3107, Application

For Immediate Retirement, indicating that an application is pending with

OWCP. In April, OPM is ready to begin final adjudication of the FERS

claim. However, no additional information concerning OWCP benefits has

been received.

Action by OPM

and Agency

OPM must contact the OWCP and the retiree to request current information

on the status of the OWCP claim.

How to Avoid

Problem 1

The agency should advise the retiree to keep OPM informed of the status of

their OWCP claim. This is true, even if the retiree intends to elect to receive

OWCP benefits, instead of FERS benefits.

NOTE: If the agency becomes aware of any changes in the retiree’s OWCP

status they should notify OPM.

Continued on next page
FERS RETIREMENTS AND OWCP, continued

Problem 2 FERS disability retirees are often not aware of how disability benefits are

paid. If OWCP benefits stop more than one year after the effective date of

eligibility for FERS disability annuity, the FERS disability will be paid at the

rate of 40% of the average salary.

Rule 2 Usually FERS disability annuity is 60% of the “high-3”average salary less

100% of any Social Security disability benefit during the first year of

entitlement to the FERS annuity, and 40% of the average salary less 60% of

the Social Security disability benefit during the second and subsequent years

before age 62. The election of OWCP benefits does not delay the adjustment

of the FERS benefit after the first year.

NOTES: A FERS disability annuitant is entitled to the “earned annuity”

(generally 1% x Average Salary x Years/Months of Service) without age

reduction, if the “earned annuity” is greater than the disability annuity

computed under the 60% or 40% formulas above. There is no adjustment

after one year if the “earned annuity” is paid.

How to Avoid

Problem 2

The agency should make every effort to ensure that employees retiring on

account of disability understand that a FERS disability annuity is adjusted

after one year and that the receipt of OWCP benefits does not delay the

adjustment.

CSRS/FERS

Handbook

Reference

Chapter 102, Part A2, Section, 1-1.

Chapter 61, B2.

See examples in Chapter 61 for FERS disability sample computations.
FERS DISABILITY RETIREMENTS INVOLVING DEPOSITS

AND REDEPOSITS FOR CIVILIAN SERVICE

Problem 1 There is some confusion about the importance of advising employees not yet

age 62, who apply for disability retirement, about the consequences of

making a deposit and/or redeposit. The FERS disability annuity rate payable

to retirees under age 62 is normally based on a percentage of the individual’s

“high-3” average salary (60% reduced to 40% after one year). In these cases

the years of service has no impact on the computation, unless the earned

annuity rate is higher. However, when a retiree whose annuity is based on a

percentage of their average salary reaches age 62, the annuity is recomputed

using the individual’s creditable years of service.

NOTE: Employees who apply for disability retirement also need to be

informed of their right to make a deposit for any active honorable post-1956

military service. This is very important since the deposit must be made to the

agency before separation. As with civilian service, paid post-56 military

service will matter when the retiree becomes age 62 or is eligible to receive

the earned annuity benefit.

Rule Deposit and redeposit amounts should be calculated and the impact of paying

or not paying for the service involved should be explained to the retiring

employee.

Example 1 During retirement counseling no mention is made of the impact of paying or

not paying a deposit and/or redeposit. The retiree first hears about the impact

the deposit or redeposit will have on the annuity payable at age 62 when OPM

completes the processing of the retiree’s application for retirement. (The

retiree has 30 days from the date of OPM’s notice to pay the amount due.)

Continued on next page
FERS DISABILITY RETIREMENTS INVOLVING DEPOSITS AND

REDEPOSITS FOR CIVILIAN SERVICE, continued

Problem 2 Deposit service is often not properly documented on the “Certified Summary

of Federal Service (SF 3107-1)”.

• The dates of deposit service are shown on the front of the SF 3107-1, but

the rates of pay associated with the service are not provided on the reverse

side of the form.

• Information on deposit service shown on the front the SF 3107-1 often

conflicts with information provided on the reverse side of the form.

• Changes in basic rates of pay (i.e., pay adjustments, WIGIs, promotions,

etc.,) are often missing from the SF 3107-1.

• Part-time service is often identified as full-time.

• Periods of service are listed as part-time, but the tour of duty is not shown.

• Intermittent and when-actually employed (WAE) service is commonly

identified as full-time. The days or hours worked during intermittent and

WAE service are often not provided.

• Intermittent and WAE service is sometimes identified as part-time

service.

OPM cannot provide retirees with information explaining their options in a

timely manner when these problems occur.

Rule A retiree has the option to pay any deposit/redeposit owed at the time of

retirement. It is critical that the “Certified Summary of Federal Service (SF

3107-1)” always provides ALL the information needed to compute amounts

due for any deposit and/or redeposit.

Example 2 A 45-year-old employee needs to retire under FERS disability rules. The

employee has 16 years of covered service and 3 years of service under a

FICA appointment. No ending date or rates of pay were provided for the

FICA service.

Action by OPM

and Agency

OPM must contact the agency to obtain the ending date for the FICA

appointment and the basic rates of pay in effect during the period. The

agency will need to review the Official Personnel Folder (OPF) for the

information. This will cause a significant delay in the final processing of the

retiree’s application for retirement.

Continued on next page
FERS DISABILITY RETIREMENTS INVOLVING DEPOSITS AND

REDEPOSITS FOR CIVILIAN SERVICE, continued

How to Avoid

the Problems

The agency should:

• Make sure employees applying for disability retirement are aware of the

consequences of paying or not paying for deposit and redeposit service.

• Review the “Certified Summary of Federal Service (SF 3107-1)” to make

sure it provides the beginning and ending dates and all of the earnings or

rates of pay for each period of deposit service.

• Ensure that the SF 3107-1 also provides all part-time tours of duty or

hours worked and time worked for any intermittent or WAE service for

each period of deposit service, when applicable.

CSRS/FERS

Handbook

Reference

Chapter 60, Part B1, Section 1-2.

Chapter 20, Appendix A.

Chapter 21, Part B.

Chapter 22, Part B3, Section 1-1.

Chapter 23, Part B.
THE LAST DAY OF PAY IN FERS DISABILITY RETIREMENTS

Problem OPM uses the last day of pay (LDOP) certified by the agency to determine

the commencing date of a disability annuity. Problems with LDOP that occur

in FERS disability retirements are:

• Retiring employees do not understand that accepting donated leave may

have an impact on their LDOP. Donated leave is often posted on the final

SF 3100 in the pay period that it was paid, rather than the pay period for

which it was intended, and the posting date is recorded as the LDOP. The

posting date may occur many months after the actual LDOP.

• The LDOP is sometimes not included on the SF 3100. This often occurs in

situations where the employee resigns, is terminated or removed and

subsequently applies and is approved for disability retirement.

• The LDOP certified on the SF 3100 does not agree with other information

provided (e.g. deductions do not support LDOP certified).

Rule An annuity can begin as early as the day after the individual’s pay stops. The

agency must certify the correct last day of pay on the final SF 3100 in order

for OPM to commence benefits on the earliest possible date.

NOTE: Agencies may credit donated leave retroactively, when the employee

has been in a leave without pay (LWOP) status under 5 CFR 630.1009(d).

Example An employee is placed in a LWOP status on December 12, 1997 and never

returns to work. On August 12, 1998, 17 hours of donated leave were

credited to the employee and the employee is later separated for disability

retirement. The LDOP certified on the SF 3100 is 8/12/98. No LWOP is

recorded on the SF 3100 for 1998, but $2.44 in retirement deductions is

shown for 1998.

Continued on next page
THE LAST DAY OF PAY IN FERS DISABILITY RETIREMENTS, Continued

Action by OPM

and Agency

OPM will question whether the LDOP is correct because related data (low

retirement deductions and no LWOP entered for calendar year 1998) does not

support the LDOP certified. OPM must contact the agency to resolve the

problem.

How to Avoid

the Problem

Suggestions for Personnel Office on how to avoid problems concerning

donated leave:

• Credit the donated leave retroactively to the date the employee exhausted

his/her unused leave balances.

• Advise employees applying for disability retirement of the consequences

accepting donated leave may have on their annuity commencing date.

Suggestions for Payroll Office on how to avoid problems related to the

LDOP:

• Verify the LDOP posted on the final SF 3100 for accuracy.

• If the SF 3100’s show retirement deductions for any years after the year in

which the LDOP occurs, correct or explain the reason on the SF 3100.

• Record the LDOP on all separation SF 3100’s, including resignations,

removals and terminations.

• Record all LWOP on the SF 3100’s, regardless of duration. Only LWOP

that occurred prior to the LDOP should be posted for the year in which pay

stops.

CSRS/FERS

Handbook

Reference

Chapter 81, Part A2, Section 3-2 and 3-3.
POST-1956 MILITARY SERVICE DEPOSIT

Problem Often in FERS cases involving a CSRS component, the post-1956 military

deposit is billed at the wrong rate.

Rule In cases involving a CSRS component, the post-1956 military service deposit

is billed at different rates, depending on whether the military service is

credited under FERS or CSRS rules.

• If the post-1956 military service is credited under FERS rules, the deposit

is 3%*, plus interest.

• If the post-1956 military service is credited under CSRS rules, the deposit

is 7%*, plus interest.

*This rate will increase for military service performed from January 1, 1999

through December 31, 2002, by the increase in employee deduction rates for

these years, in accordance with Public Law 105-33, Balanced Budget Act of

1997. (See Benefits Administration Letter 97-106, dated August 13, 1997.)

Example An employee wants to pay his post-1956 military deposit. The post-1956

military service was performed before the employee’s election to transfer to

FERS; therefore it is credited in the CSRS component of his annuity. The

agency bills the employee for a deposit of 3% of the military earnings, plus

interest. The SF 3100 documenting the military deposit comes to OPM at the

time of retirement and OPM notices that the deposit was 3% of military

earnings when it should have been 7% of military earnings.

Action by OPM

and Agency

______________________________________________________________

OPM must suspend processing the retiree’s case and contact the former

employing agency to correct the records. The agency must recompute the

amount due and either bill the former employee for any additional money

due, or refund any overpayment. The agency must also correct the original

certification sent to OPM.

How to Avoid

the Problem

Make sure that the correct rate is used when computing post-1956 military

service deposits for FERS employees with CSRS components.

CSRS/FERS

Handbook

Reference

Chapter 23, Part B.
COMMENCING DATE OF FERS ANNUITIES

Problem Many FERS employees separate from service for voluntary retirement on one

of the first 3 days of the month and expect their annuity to begin on the next

day. These retirees are surprised and often upset when they learn their

annuity will not begin until the first day of the following month.

Rule A FERS annuity based on a voluntary retirement generally commences on the

first day of the month following separation. The rule that allows an annuity

to begin on the 2nd, 3rd or 4th day of the month only applies to persons who

retire under the Civil Service Retirement System.

Example A FERS employee separates for optional retirement on August 3rd and

expects her annuity to begin on August 4th. OPM completes her claim and

sends her information stating her annuity began on September 1st – the first

day of the following month. The retiree contacts OPM and challenges the

commencing date of her annuity.

Action by OPM

and Agency

OPM must explain to the retiree the rules governing the commencing date of

a FERS annuity. If the retiree insists on being paid for the month of August,

OPM must further explain that we can only change the commencing date of

an annuity upon receipt of corrected records from the former employing

agency.

How to Avoid

the Problem

The agency should ensure that employees are aware of the FERS annuity

commencing date rule, particularly if their separation occurs on the 1st, 2nd or

3

rd day of the month.

CSRS/FERS

Handbook

Reference

Chapter 41, Part B2, Section 1-1.
FORMS – APPLICATIONS FOR DEATH BENEFITS

Problem We continue to receive obsolete versions of the SF 3104 (Application for

Death Benefits/FERS), SF 3104A (Survivor Supplement/FERS), and

SF 3104B (Documentation and Elections in Support of Application for Death

Benefits). The use of the obsolete editions of these forms delays payment to

the survivor.

Rule An individual who is applying for a survivor benefit should only use the

current edition of these applications.

Example The widow of an employee who dies in service completes and submits, with

the help of the deceased’s employing agency, the December 1991 edition of

the SF 3104B. The widow is entitled to the Basic Employee Death Benefit

(BEDB).

Action by OPM

and Agency

OPM must suspend the processing of the widow’s application and send her

information on the IRA rollover option. OPM must then wait for the widow to

make a decision and notify OPM of that decision. Often the wait can be

lengthy.

How to Avoid

the Problem

The agency should always make sure they provide applicants with the most

recent edition of all applications. The most recent edition of the SF 3104B,

Documentaion and Elections in Support of Application for Death Benefits,

contains a detailed explanation of the rollover option and provides the forms

needed to take advantage of this option.

Any edition of the SF 3104 (which includes the SF 3104A) dated before

January 1997 is obsolete and should not be used. Prior editions of the

SF 3104 do not contain correct direct deposit election information.

Any edition of the SF 3104B dated before December 1995 is obsolete and

should not be used. Prior editions of this form do not contain IRA Rollover

Option Information.

Current editions of the SF 3104 and SF 3104B are available on OPM’s

website at www.opm.gov.

Continued on next page
FORMS – APPLICATIONS FOR DEATH BENEFITS, continued

References Benefits Administration Letter 98-102, dated March 2, 1998.

Availability of Revised FERS Death Benefit Application Form, SF 3104

Benefits Administration Letter 96-113, dated December 26, 1996.

Availability of Revised FERS Death Benefit Application Forms, SF 3104 and

SF 3104B
FERS DEATH IN SERVICE WITH BASIC EMPLOYEE DEATH

BENEFIT PAYABLE - DECEASED IN ADDITIONAL PAY

STATUS (APS) AT THE TIME OF DEATH

Problem Additional Pay Status (APS) on the date of death is not adequately

documented. There may be an indication on the Individual Retirement

Records (SF 3100s) that APS was worked during the year in which the

employee died, but it is not clear whether the employee was in an APS on the

date of death. This could affect the amount of the Basic Employee Death

Benefit (BEDB) payable.

Rule Part of the BEDB is based on 50% of the deceased employee’s final salary or

“high-3” average salary, whichever is higher. Both are based on the basic pay

the deceased received on the date of death. APS is considered when

computing basic pay. If the deceased was in APS during the final year of

service, OPM needs to know the if the employee was in APS on the date of

death.

• If the deceased employee was not in APS on the date of death, then the

final salary is the basic pay on that date.

• If the deceased employee was in APS on the date of death, then the final

salary would be the higher of the basic pay computed using retirement

deductions or the actual final salary. (The number of hours of Leave

Without Pay (LWOP) for the year of death should also be reported, if

applicable.)

Example The surviving spouse of an employee who dies in service meets the eligibility

requirements for the BEDB. The Individual retirement records (SF 3100’s)

forwarded with the survivor’s application show the deceased employee was in

APS during the year of death. However, the SF 3100’s do not indicate

whether the deceased was in APS on the date of death.

Action by OPM When there is an indication of APS during the final year of service, OPM

must contact the employing agency’s payroll office to find out whether the

deceased was in APS on the date of death.

Continued on next page
FERS DEATH IN SERVICE WITH BASIC EMPLOYEE DEATH

BENEFIT PAYABLE - DECEASED IN ADDITIONAL PAY

STATUS (APS) AT THE TIME OF DEATH, continued

How to Avoid

the Problem

If the deceased employee is in APS during the year of death, indicate on the

SF 3100 whether or not the deceased was in APS on the date of death.

CSRS/FERS

Handbook

Reference

Chapters 70 Part B2.
LIFE INSURANCE ELIGIBILITY

Problem Retirement packages often do not include the election forms needed to support the coverage

certified on the Certification of Life Insurance Coverage (SF 2821). OPM needs this

information to determine if the employee can continue basic and optional coverage. The

processing of the retirement claim must be delayed until proof of continuous coverage is

established.

Rule The rule for continuing Federal Employees Group Life Insurance (FEGLI)

coverage into retirement and the rule for properly documenting the coverage

are:

• To continue FEGLI into retirement the retiree must have continuous

FEGLI coverage for 5 years preceding separation, or his/her first

opportunity to enroll. This applies to both basic and optional FEGLI.

• To properly document the 5 years of continuous FEGLI coverage (or

enrollment from first opportunity), the agency must provide the FEGLI

certification document (SF 2821) and copies of all of the FEGLI election

forms (SF 2817). If there are no SF 2817’s in cases where optional

insurance is involved, the agency must provide copies of the appropriate

Personnel Actions for the last 5 years. Usually this includes the SF 50’s

or equivalents showing FEGLI enrollment, any FEGLI changes and the

retirement action.

Example A retirement package arrives at OPM with a SF 2821, certifying coverage for

the last 5 years. However, there is no supporting documentation to prove that

the 5 years of continuous coverage requirement has been met.

Action by OPM

and Agency

OPM must contact the agency to obtain the additional documentation.

How to Avoid

the Problem

The agency should include all original Life Insurance forms with the

retirement package. If the SF 2817’s verifying the 5 years of continuous

coverage (or coverage from first opportunity) are missing, copies of the

SF 50’s can be sent to document the coverage. If copies of SF 50’s are sent,

the agency should include a note explaining that the election forms are not on

file.

CSRS/FERS

Handbook

References

Chapter 40, Job Aid #2, Life Insurance Forms. (Also see, The FEGLI

Handbook for Personnel and Payroll Offices – formerly FPM Supplement

870-1.)
DOCUMENTING PART-TIME SERVICE

Problem In many disability and regular retirements involving part-time service, the

actual part time hours are not provided.

Rule If a retiring employee’s FERS service includes part-time service or if the

employee’s CSRS service includes part-time service on or after April 7, 1986,

the agency must certify the tour of duty, the hours equal to a full-time tour of

duty, and the hours worked for each calendar year.

Example OPM receives a retirement package for an employee who worked part-time.

The SF 3100 shows the part-time tour as 24 hours per week. However, the

employee often worked 32 hours per week but the SF 3100 does not reflect

this fact. The employee expects to receive an annuity that reflects the

schedule actually worked. The retiree contacts OPM and questions the

amount of his annuity.

Action by OPM

and Agency

OPM uses the part-time tour information provided to determine the proration

factor for the part-time service, computes the annuity and begins payment.

(The FERS proration factor is computed by dividing the total actual hours

worked by the total full-time hours that could have been worked.) OPM must

contact the agency and request the actual hours worked by the individual for

each year of part-time service. The agency must collect this data and send it

to OPM. OPM recomputes the annuity and notifies the retiree.

How to Avoid

the Problem

Agency personnel staff should:

• Explain to retiring employees, who worked part-time, how their annuity

will be reduced for their part-time service.

Agency payroll staff should:

• Review all SF 3100’s for employees who worked part-time, to insure they

include the tour of duty, the hours equal to a full-time tour, and part-time

hours actually worked.

CSRS\FERS

Handbook

References

Chapter 55, Part A4, Section 1-1. (Applicable CSRS provisions.)

Chapter 55, Part B2, Section 1-1 (Computing FERS Annuities that Include

Part-Time Service)

Chapter 55, Part C1, Section 1-1 (FERS Proration Factor Worksheet)
REQUIREMENTS FOR RETIRING WITH 5 YEARS OF SERVICE

Problem OPM receives applications for non-disability retirement from employees who

have less than 5 years of creditable civilian service.

Rule • An employee must complete at least 5 years of creditable CIVILIAN

service in order to be eligible for retirement.

• Military service cannot be used to meet this requirement

• Most post-1988 FERS nondeduction service is not creditable for

retirement.

• A deposit must be paid for Pre-1989 FERS nondeduction service in order

for the service to be used to meet the 5-year requirement.

Example A sixty-two year old federal employee wants to retire. He has 3 years in a

FERS-covered position, 1 year and 6 months of paid post-1956 military

service, and 6 months of noncovered service under a temporary appointment.

The agency separates him for retirement and forwards his retirement package

to OPM.

Action by OPM

and Agency

The retirement claim must be denied because the eligibility requirements for a

FERS retirement are not met. OPM contacts the individual and the agency to

inform them of the error. The agency may be required to reinstate the

employee retroactive to the separation date with pay.

How to Avoid

the Problem

The agency should thoroughly review an employee’s service history to make

sure the minimum service requirement has been met. Although the employee

may have 5 years of total service, there must be a minimum of 5 years of

creditable CIVILIAN service in order to retire.

CSRS/FERS

Handbook

References

Chapter 41, Part B1, Section 1-2.

Chapter 45, Part B1, Section 1-2.

Chapter 20, Part B.
CREDITING SICK LEAVE WITH A CSRS COMPONENT

Problems • A retiring employee’s Unused Sick Leave (USL) balance on the date of

transfer to FERS is not posted on the frozen SF 2806, Individual

Retirement Record.

• A retiring employee’s Unused Sick Leave (USL) balance on the date of

retirement is not posted on the final SF 3100, Individual Retirement

Record.

Rule Individuals who elected to transfer to FERS and who are entitled to have

service prior to the transfer computed under CSRS rules, receive credit for the

amount of USL they had on the date of transfer or the date of retirement,

whichever is less. In order to avoid a processing delay and provide proper

credit to the retiree, OPM must receive both sick leave balances. If one is

zero, a zero balance should be reported.

NOTE: A FERS annuity that does not have a CSRS component receives no

USL credit.

NOTE: Some agencies post the USL balance on all transfer and final

Individual Retirement Records and allow OPM to make the determination on

whether or not the sick leave is creditable. This is very helpful to OPM.

Example OPM receives a retirement package and the SF 3100 shows 300 hours of sick

leave on the day of transfer to FERS, but there is no information provided

about the USL balance on the date of retirement.

Action by OPM

and Agency

OPM must contact the agency payroll office and request the sick leave

balance at retirement. This information is required even if the balance is zero.

The processing of the retiree’s case must be suspended until the information

is received.

Continued on next page
CREDITING SICK LEAVE WITH A CSRS COMPONENT, Continued

How to Avoid

the Problem

Agency Payroll Office staff should:

• Review the SF 3100 to make sure it shows accurate sick leave balances at

the time of transfer to FERS and retirement.

Agency Personnel Office staff should:

• If a retiring employee transferred to FERS while employed with a

different agency or the payroll office has closed, provide a copy of the

transfer to FERS Personnel Action (SF 50) from the employee’s Official

Personnel Folder. Even if the unused sick leave balance is not provided

on the SF 50, OPM will know the personnel office does not have the

information. OPM will go directly to the payroll office to find out where

the old payroll information is now stored. (If the employee has pay stubs

showing unused sick leave at transfer to FERS, they could be helpful.)

NOTE: Although OPM may have Individual Retirement Records for prior

service, these records may not provide this particular information.

CSRS/FERS

Handbook

Reference

Chapter 20, Part B2, Section 1-3.

Chapter 81, Part A2, Section 2-2.B.
FEDERAL EMPLOYEES HEALTH BENEFITS (FEHB)

DOCUMENTATION

Problem 1 Retirement application packages sometimes do not include FEHB forms

needed to support 5 years of continuous coverage prior to retirement or

enrollment at first opportunity.

Rule 1 Retirees must have continuous health benefits coverage for the 5 years prior

to retirement, or must have elected health benefits coverage at their first

opportunity, if less than 5 years prior to retirement.

Example OPM receives a retirement package and Schedule D (Agency Checklist of

Immediate Retirement Procedures) of SF 3107 (FERS Application for

Immediate Retirement), indicates that the applicant meets the requirements

for continuation of health benefits coverage into retirement. However, there

are no supporting documents to show proof of 5 years of continuous FEHB

coverage.

Action by OPM

and Agency

OPM must contact the agency and request the FEHB forms (SF 2809’s and

SF 2810’s) that support the 5 years of coverage prior to retirement.

How to Avoid

the Problem

Include all original FEHB forms (SF 2809’s and SF 2810’s) with the

retirement package.

Problem 2 Health benefits coverage changes are made via Employee Express prior to

retirement and not documented in the retirement package. OPM has no

record of the individual’s current health benefits status.

Rule 2 Eligible retirees carry their current health benefits coverage into retirement.

Example An employee changes his health benefits plan during an annual Open Season

using Employee Express and subsequently retires. The retirement package

contains no record of this change. OPM continues the health benefits

coverage shown on the last SF 2809 in the retirement package. The retiree

receives an annuity statement and realizes that OPM is deducting premiums

for the wrong health benefits plan.

Continued on next page
FEDERAL EMPLOYEES HEALTH BENEFITS (FEHB) DOCUMENTATION, continued

Action by OPM

and Agency

OPM must contact the former employing agency for documentation of the

Open Season change. Since the retiree has been separated from the agency

for quite some time, it may be difficult to get the information needed.

How to Avoid

the Problem

Attach a memorandum to the FEHB forms, which gives information about

any changes made using Employee Express. The enrollment code change(s)

and the effective date should be included.

CSRS/FERS

Handbook

Reference

Chapter 40, Job Aid #2, Health Benefits Forms
FERS DISABILITY FACTS

Eligibility Eligibility Requirements:

• You must have at least 18 months of creditable civilian service.

• While covered under FERS you must have become disabled “for useful and

efficient service” in both your current position and any other vacant position at

the same grade or pay level for which you are qualified.

• Your disabling condition must be expected to last at least 1 year.

• You must apply for Social Security disability benefits.

Reasonable

Accommodation

Before you can be considered eligible for disability retirement benefits, your

employing agency must determine that you are not qualified for reassignment to any

other vacant position within your agency and commuting area at the same grade or

pay level of the position you currently occupy.

Filing an

Application

You or someone acting for you must file an application for disability retirement with

the Office of Personnel Management (OPM) or your former employing agency either

before you leave Federal service or within 1 year after you separate.

Waiver of

Timely Filing

Rule

The 1 year filing requirement can be waived only if you are mentally incompetent on

leaving Federal service or become mentally incompetent within 1 year after leaving.

If this occurs, your application will be accepted if filed within 1 year from the date

you are restored to competency or a guardian is appointed, whichever comes first.

Definition of

Disabled

You are disabled when the information submitted to OPM indicates that there is a

service deficiency, caused by disease or injury, of sufficient degree to preclude

useful and efficient service, and that the disabling condition is expected to last at

least 1 year.

Definition of

Useful and

Efficient

Service

Definition:

• Acceptable performance of the critical or essential elements of the position or the

ability to perform at that level, and

• Satisfactory conduct and attendance.

NOTE: Service which is not “useful and efficient” is a level of performance or

attendance which, if it were to continue, would warrant denial of a within-grade

increase, demotion, separation, or other remedial action.

Continued on next page
FERS DISABILITY FACTS, continued

Claim

Documentation

A claim for disability retirement must include documentation:

• Of deficiency in service with respect to performance, conduct, or attendance, or

showing that the medical condition is incompatible with either useful service or

retention in the position.

• Of a medical condition defined as disease or injury.

• That the medical condition caused the service deficiency.

• Showing the duration of the medical condition, both past and expected. The

expected duration must be at least 1 year.

• That the inability to provide useful and efficient service arose while serving

under FERS.

• Of the inability of the employing agency to make a reasonable accommodation

to the medical condition.

• Of the absence of another position within the employing agency and commuting

area, at the same grade or pay level and tenure, to which the employee is

qualified for reassignment.

NOTE: Your agency will provide assistance in obtaining the required forms,

statements from your supervisors and attending physicians, and proof that your

condition prevents useful and efficient performance.

Social Security

and FERS

If you are under age 62, your FERS disability must be offset by any Social Security

disability benefits you receive. Since OPM does not know how much to pay you

until it knows if Social Security is awarding benefits and the amount of those

benefits, you must apply for Social Security disability benefits before OPM can

begin paying a FERS disability benefit.

Continued on next page
FERS DISABILITY FACTS, continued

Acceptable

Proof of Social

Security

Application

Acceptable proof:

• A copy of the Social Security Administration’s (SSA) receipt notice. This notice

merely acknowledges that you have applied for Social Security disability

benefits.

• A copy of your notice of approval letter from SSA. This letter approves you for

Social Security benefits and provides the gross monthly amount to which you are

entitled.

• A copy of your notice of disapproval letter from SSA. The most common

reasons for benefits to be denied are because the medical evidence does not show

that you meet Social Security’s standard for awarding a disability benefit, or that

you are “gainfully employed” as defined by Social Security.

NOTE: A denial from SSA based on gainful employment is not adequate

information for OPM. Usually this means the employee was still on the agency’s

rolls and was not yet separated when he/she applied and he/she may in fact be

entitled to Social Security disability based on his/her disabling condition. If your

benefit is denied for gainful employment, you must reapply to SSA after separating

from your last employing agency.

Things to Keep

In Mind About

Social Security

• Continue to keep OPM updated regarding your Social Security status if it

changes. This includes the initial application, approval or disapproval as well as

any appeal or reconsideration request. The need to update OPM on any changes

in your Social Security disability status continues as long as you are applying for

or receiving a FERS disability benefit.

• If SSA sends you a retroactive payment, notify OPM immediately. OPM cannot

calculate the amount of the SSA offset until we know the gross monthly amount

and the effective date of the SSA disability benefit. Overpayment by OPM will

result if we are not immediately notified of retroactive SSA payments.

• For the purpose of a FERS disability retirement OPM is only concerned about

Social Security disability benefits. There is no need to send us information about

Supplemental Security Income or widow or widowers benefits.

• A verbal denial from Social Security is not acceptable proof of application or

disapproval of SSA benefits. If you receive a verbal denial you must insist on

receiving a written notice of receipt of application and a formal denial letter.

NOTE: You should understand how much you are entitled to receive from OPM and

set aside money if you believe you are being overpaid. In the event of an

overpayment, OPM will inform you of the overpayment amount and their repayment

plan. If a retroactive payment is authorized by SSA, it should be set aside until OPM

determines whether an overpayment of FERS disability benefits has occurred.

Continued on next page
FERS DISABILITY FACTS, continued

Where to Apply

for Social

Security

Apply for Social Security benefits at your local Social Security office. For more

information about Social Security call their toll free number at 1-800-772-1213. You

can get Social Security information 24 hours a day and you may speak to a service

representative from 7 am to 7 p.m. (Eastern Standard Time) on business days. Have

your Social Security number handy when you call.

What if I

recover?

You can request to be found recovered at any time. Your annuity will stop at the end

of 1 year from the date of the medical examination or report showing your recovery,

or upon your reemployment in the Federal Government, whichever is first.

Earnings

Received While

Disabled

You can earn income while also receiving disability retirement benefits; however,

your disability annuity will stop if OPM determines that you are able to earn an

income which is 80% of the current rate of basic pay for the position from which you

are retired.

NOTE: If you are receiving a Social Security benefit, consult SSA concerning SSA

rules about earnings and disability benefits. The rules are different for SSA.
FERS DISABILITY COMPUTATION FACTS

Disability Retiree Under Age 62 at Time of Retirement and Not Eligible for

Voluntary Immediate Retirement:

Benefit Payable

for the First 12

Months

For the first 12 months of your FERS disability, you will receive:

60% of your high-3 average salary

 minus

100% of your Social Security disability benefit for each month you are

entitled to such benefits.

Benefit Payable

After First 12

Months Until

Age 62

After the first 12 months and until you reach age 62, your annuity will be

recomputed as follows:

40% of your high-3 average salary

 minus

60% of your Social Security disability benefit for any month in which you are

entitled to such benefits.

Earned Rate You are entitled to your “earned” annuity (generally, 1% x average salary x

years of service) if it is larger than your disability annuity computed under the

two disability formulas outlined above.

Benefit Payable

at Age 62

Your annuity will be recomputed using an amount that essentially represents

the annuity you would receive if you had continued working until the day

before your 62nd birthday and then retired under FERS non-disability

provisions. (The total service used in the computation is increased by the

amount of time you were on the disability annuity roll and your average

salary is increased by FERS cost-of-living increases during that time. The

basic annuity formula (generally, 1% x average salary x years of service) is

then applied, using the adjusted time base and average salary).

Continued on next page
FERS DISABILITY COMPUTATION FACTS, continued

Disability Retiree Age 62 or Older at Time of Retirement or Any Age and Eligible for Voluntary

Immediate Retirement:

Benefit Payable You are entitled to your “earned” annuity (generally, 1% x average salary x

years of service). If you had at least 20 years of service and are at least age

62 at separation, your annuity is 1.1% of your average salary multiplied by

your years and months of service.

Important Information For FERS Disability Retirees of All Ages:

Survivor

Benefits

If you provide survivor benefits for your current spouse upon your death, the

survivor annuity rate will be computed as follows:

• If you die before age 62, your spouse’s annuity will be one-half (or onefourth if you elect a partial survivor benefit) of the amount of annuity to

which you would have been entitled if you had died the day after

becoming age 62. (The total service used in the computation is increased

by the amount of time you were on the disability annuity roll, plus the

amount of time between the date of your death and the date on which you

would have become 62, and the average salary is increased by FERS costof-living increases during the time you were on the roll.)

• If you die after becoming age 62, your spouse’s annuity will be one-half

(or one-fourth, if you elect a partial survivor benefit) of the annuity you

were entitled to on the day before your death.

NOTE: If you do not elect survivor benefits and your spouse is covered by

your self and family Federal Employees Health Benefits (FEHB) enrollment,

he or she will not be entitled to continue it after your death. If you elect a

survivor benefit, (even if that benefit does not cover the full cost of the health

insurance premiums), and you have self and family health benefits coverage

at the time of death, your spouse will be able to continue his or her coverage.

High-3 Average

Salary

Your “high-3” average salary was figured by averaging your highest basic

pay over any three years of consecutive service. 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 for shift rates, night shift

differential, etc. It does not include payments for overtime, bonuses, etc.

NOTE: If you have less than 3 years of creditable civilian service, OPM uses

your average salary during all of your creditable civilian service.