ATTACHMENT 3

RETIREMENT COVERAGE ERROR CORRECTION

Model Notice of the Opportunity to Decline FERS Coverage

BAL 02-103 Erroneous FERS Coverage in Effect for Less than 3 Years

May 7, 2002
BAL 02-103 May 7, 2002

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[Insert Date]

Dear [Enter employee’s name]:

We recently discovered a mistake in your retirement coverage. When you came to work for this

agency, we put you in the Federal Employees Retirement System (FERS). Unfortunately, we

should have put you in the [insert correct retirement plan (CSRS), Civil Service Retirement

System Offset (CSRS Offset), or Social Security (FICA)-Only] plan. We regret this error.

You have options on how we correct this error. You may remain in FERS, or you can choose to

have your retirement coverage retroactively corrected to [insert correct retirement plan]. With

this letter, we have included information about each option. Please review the information and

let us know if you have any questions.

You have until [insert date that is 60 days from date of notice] to make your decision. If you

don’t choose a retirement plan, you will be considered to have chosen to remain in FERS. If

you can’t make a decision by [insert date], please let us know. We can give you more time if

you are unable to make a decision by the deadline because of circumstances beyond your

control. If the deadline passes and you did not make a decision or request an extension, you

will remain covered by FERS.

We have included a decision-making guide called Should You Stay In FERS? which will help

you choose. It contains an overview of both retirement plans, discusses the differences

between FERS and [CSRS or CSRS Offset], and provides examples. We can help too. We can

provide projections of your future retirement benefits under both plans. We can also help you

project your future Social Security benefit and your Thrift Savings Plan benefits so that you can

compare your total benefits under both plans.

We realize that this error may cause you concern and we regret that. We want to make this as

easy for you as we can. [Insert name of contact person] will be able to counsel you regarding

your retirement benefits. He/She can be reached on [insert telephone number, email, etc....].

Please don’t hesitate to contact us to ask any questions you have.

Please acknowledge receipt of this notice by returning a signed and dated copy of this letter.

_______________________________ ____________

Signature Date

Remember, you need to let us know which retirement plan you want by [Enter date of election

deadline]. You can make your election on the enclosed form.

Sincerely,

XXXXX

Enclosures: Summary Information

Standard Form 3109

Should You Stay In FERS?
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Summary Information for [insert employee’s name]

[Delete and/or adjust sections as appropriate based on the employee’s service history.]

I. Federal Service

We reviewed your personnel records and outlined your career with the Federal Government

below. Please review this summary of your service and contact us immediately if we’ve missed

anything. Any change to your service record, no matter how minor, could affect the options you

have regarding your retirement coverage.

Agency Dates of Service Yrs./Mos./Days Retirement

Coverage

**/**/** – **/**/ /** /**

**/**/** – **/**/ /** /**

**/**/** – **/**/ /** /**

**/**/** – **/**/ /** /**

Total Federal Service:

Total creditable CSRS Service:

Total creditable FERS Service (including CSRS

Offset time):

** years, ** months, ** days

** years, ** months, ** days

** years, ** months, ** days

II. Correction of Your Records

If you elect to have your retirement coverage corrected to [insert correct retirement plan, i.e.,

CSRS, CSRS Offset, or Social Security (FICA)-Only], that correction will be made retroactive to

[enter effective month, day, and year of correction]. If you choose to stay in FERS, the date

your FERS coverage began will not change. However, we will correct the Notification of

Personnel Action (Standard Form 50) showing your appointment on [enter month, day, and

year] to show that you elected FERS.

III. Thrift Savings Plan

You are currently contributing ___% of your pay to the Thrift Savings Plan (TSP). You are also

currently receiving Agency Automatic (1%) and Agency Matching contributions. You will be able

to keep all the money you contributed in the TSP, and associated earnings on your

contributions, regardless of which retirement plan you choose.

If you choose [insert correct retirement plan, i.e., CSRS, CSRS Offset, or Social Security

(FICA)-Only] all the Agency Automatic (1%) Contribution and Agency Matching Contributions,

along with associated earnings, will be removed from your TSP account. As a CSRS or CSRS

Offset employee, the maximum you can currently contribute to the TSP is [insert current
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maximum percentage] of pay. Employees covered by Social Security (FICA)-Only may not

contribute to the TSP.

You became eligible to contribute to the TSP on [Enter date of earliest eligibility based on

erroneous automatic FERS coverage]. However, if you decide to stay in FERS, the earliest you

should have become eligible to contribute to the TSP is [Enter effective date of deemed FERS

coverage]. This means that if you decide to stay in FERS, you are entitled to retroactive Agency

Automatic (1%) contributions for the period [Enter date] to [Enter date]. You will also have the

opportunity to make up employee contributions missed during this period. If you make up

employee contributions, you will receive associated retroactive agency matching contributions.

In addition, you are entitled to lost earnings on the retroactive agency contributions that are

made to you account. You will not receive lost earnings on make up employee contributions.

IV. Service Credit

You performed service that was not subject to retirement deductions before becoming

erroneously covered by FERS. You also received a refund of retirement deductions withheld

from your pay.

[Enter deposit and/or redeposit service that is subject to CSRS rules.]

SERVICE NOT SUBJECT TO

RETIREMENT DEDUCTIONS MILITARY SERVICE SERVICE THAT WASREFUNDED

**/**/** to **/**/ /** /** to **/**/ /** /** to **/**/**

**/**/** to **/**/ /** /** to **/**/ /** /** to **/**/**

**/**/** to **/**/ /** /** to **/**/**

**/**/** to **/**/**

Under a special rule that applies to employees like you who have been put in FERS by mistake,

you will get retirement credit for your service mentioned above even if you do not pay the

deposits and redeposit. If you don’t pay the deposits or redeposit, the Office of Personnel

Management (OPM) will credit that service when it computes your annuity after you retire, and

apply an actuarial reduction.

The actuarial reduction is a permanent reduction in your benefit. The amount of the actuarial

reduction depends on your age and the amount of the unpaid deposit and redeposit at the time

you retire. To compute an actuarial reduction, OPM divides the total deposit and redeposit

amounts by the present value factor for your age at retirement.

For example, suppose you retire at age 59 and you have some old civilian service that was not

subject to CSRS retirement deductions. The amount of the deposit for this service is $4,500. If

you don’t pay the $4,500 deposit, OPM will still use the service to compute your retirement

annuity. However, your annuity is reduced by $24 per month. The $24 per month reduction is
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computed by taking the amount you owe ($4,500) and dividing it by the present value factor for

age 59 (190.2).

V. Additional Information

Please refer to [Should You Stay In FERS: A guide to choosing between FERS and CSRS

retirement plans when you were erroneously put in FERS or Should You Stay In FERS: A guide

to choosing between FERS and CSRS Offset retirement plans when you were erroneously put

in FERS] for additional information that will help you make a decision. If you need help, please

don’t hesitate to contact [insert name] on [insert telephone number, email address, etc...].