FERS Annuity Supplement and Divorced Federal Employees

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Is anything being done to fight OPMs decision to suddenly include the FERS Annuity Supplement as income in the formula of divorced retirees? I understand they were supposed to start doing so when FERS began over 30+ years ago – but did not, so why now?

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Posted by (Questions: 1, Answers: 9)
Asked on August 8, 2017 10:02 pm
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I am the original complainant to OPM in this matter. There has been no formal answer yet from OPM regarding reconsideration, so in the meantime, it’s business as usual. Should OPM not change their policy, the Federal Law Enforcement Officers Association remains committed to fixing this legislatively, which will override OPM policy.

With regard to the Retiree Annuity Supplement (RAS), it is not an election that you make on your SF-3107. Period. If you are eligible for the RAS, it will be paid to you.

The RAS is paid by OPM and has nothing to do with Social Security, other than the methodology used to determine the amount of the award. 5 USC 8421 governs the application of the RAS and Chapter 51 of the CSRS/FERS Handbook explains the policy that OPM follows in implementing the law. There is no election.

I have been working with federal retirement benefits for 20+ years and have been a CPA for 27 years. My answer is CORRECT. Elaine is correct and an expert as well.

( at August 10, 2017 1:37 am)

Like I told Elaine, we agree to disagree on certain matters–I’m not going to continue beating a dead horse here. I’m sure anyone that posts has experience/ credentials, but let’s stay on focus. It’s good to know there are investigations–external and internal–happening–that’s what my original post was trying to find out–this is great! I know Elaine and I’m surprised at how this communication has gone. I’m not going to continue going back and forth like this. I’ve done my best to keep things positive with Elaine, but I can’t do anything about how anyone receives things. Good luck to you both.

( at August 10, 2017 2:01 am)

You’re like the guy that sees multiple doctors until he gets the diagnosis he wants. Do you really think you are right and two people who are subject matter experts with 50 years of experience are wrong? Wow. Why do you even post a question when you obviously already have all of the answers. I was trying to help by letting you know Elaine was right. Read 5 USC 8421 and Chapter 51 and report back to this forum where you saw an election. Review the SF-3701 and tell me where the election is. The reason that Elaine and I (for free) try to set things right is that folks will use Google and see your post, not knowing it’s completely wrong.

( at August 10, 2017 2:11 am)
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I think the real question is why did Sammy overlook such a no brainer until now.

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Posted by (Questions: 0, Answers: 6)
Answered on August 8, 2017 11:43 pm
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I understand what you’re saying, but it doesn’t answer my question. But thanx for your response!

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Posted by (Questions: 1, Answers: 9)
Answered on August 9, 2017 12:26 am
See below.
( at August 9, 2017 1:33 am)
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I think another thing worth consideration is I believe the Supplement is a part of our social security benefit. The reason I believe this is, if we elect to accept the Supplement until we turn 62, that reduces our social security payments when we become eligible for regular social security. And if it is related to social security, a former spouse has to meet specific criteria before they would be eligible to receive a portion of our social security. Anyway, had to throw this in.

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Posted by (Questions: 1, Answers: 9)
Answered on August 9, 2017 1:42 am
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To respond to the original question, this was an internal change within Office of Personnel Management that is being investigated with no formal conclusion at this time. And in response to the comment made by MrMa74, that is incorrect. The supplement is part of the FERS benefit and has nothing to do with Social Security. The calculation for the supplement is similar to Social Security but is based only on full years of FERS service. What affects your Social Security is the fact that you are not working during those years of collecting the supplement.
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Answered on August 9, 2017 3:32 pm
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Hi Elaine and thanx for your response. However I must disagree. This is not an internal change within OPM pending an investigation with no formal conclusion. OPM has responded to retirees that they stand firm in their decision to apply this, they cite a reference to Title 5, and divorced retiree paycheck’s are being affected now. What’s more frustrating for a lot of folks is there is no notice until the retiree receives a letter notifying them of what their new pay will be and why. The reason I’m bringing up the social security aspect is because if we accept this supplement–which was (still?) optional when I retired– it permanently reduces the amount of social security we will receive when we become eligible for the regular social security payments. Hence the question of does this fall under social security. If it doesn’t, why would social security payments be permanently reduced? I’ve posed my thoughts to another federal agency requesting their read on it. I’ll update folks when I get something. But again, thanx for your response….it really is appreciated. It’s helpful to get different views.

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Posted by (Questions: 1, Answers: 9)
Answered on August 9, 2017 10:03 pm
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I have seen several of the letters OPM has written taking money away from retirees and their citation of how they claim to interpret Title 5 however I also know that it is being challenged and a final decision has not yet been rendered. The FERS retiree supplement was never optional and has never had anything to do with drawing your Social Security benefit. It is a part of your FERS benefit and getting the supplement is tied to the retirement option you exercise when you retire. Some options pay the suppment and some do not. And, as previously stated, drawing this supplement has no impact on your Social Security benefit. Social Security is based on your lifetime earnings posted to your work record. If you retire from FERS at say age 56 and never work again, you in essence have years where you did not pay into Social Security. That is what reduces your Social Security. If you read your SSA benefit statement it tells you IF you work until age 62 or 66/67 or 70, this is what you can expect to collect. I hope this makes it clearer. I will be glad to add an update when I hear from OPM on the divorce challenge.

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Posted by (Questions: 0, Answers: 356)
Answered on August 9, 2017 11:35 pm
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Hello again and thanx again for your response! I think it’s best to say we agree to disagree and leave it at that. Obviously your experience when you retired was very different from mine. I assure you I know what decisions I had to make at the time I turned my retirement package in, and one of them was whether I wanted to accept or decline the supplement–it was my choice. I also signed a document stating if I accepted it, my social security would be reduced. But I think it’s best to get back to the focus of my original post. I’ve learned since I posted that, at the request of other affected retirees, there are now external agencies getting involved to get to the bottom of this. And I think that’s good. At a minimum, I question whether OPM should have the right to (1) over-ride approved court orders, (2) suddenly start doing something they should have been doing at the inception of FERS Retirement Program–1986(?), (3) to decide which court order this will apply to and which will not? Is OPM LEGALLY correct–perhaps. But I think the more important question is, are they RIGHT? If OPM is declared correct, folks will obviously accept that and move on. But it could rule the other way as well–who knows. In the meantime, I’ll be sure to post any updates I get as well. This is great because it shows different responses.

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Posted by (Questions: 1, Answers: 9)
Answered on August 10, 2017 12:42 am
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Hello again and thanx again for your response! I think it’s best to say we agree to disagree and leave it at that. Obviously your experience when you retired was very different from mine. I assure you I know what decisions I had to make at the time I turned my retirement package in, and one of them was whether I wanted to accept or decline the supplement–it was my choice. I also signed a document stating if I accepted it, my social security would be reduced. But I think it’s best to get back to the focus of my original post. I’ve learned since I posted that, at the request of other affected retirees, there are now external agencies getting involved to get to the bottom of this. And I think that’s good. At a minimum, I question whether OPM should have the right to (1) over-ride approved court orders, (2) suddenly start doing something they should have been doing at the inception of FERS Retirement Program–1986(?), (3) to decide which court order this will apply to and which will not? Is OPM LEGALLY correct–perhaps. But I think the more important question is, are they RIGHT? If OPM is declared correct, folks will obviously accept that and move on. But it could rule the other way as well–who knows. In the meantime, I’ll be sure to post any updates I get as well. This is great because it shows different responses.
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Posted by (Questions: 1, Answers: 9)
Answered on August 10, 2017 12:42 am
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For the record I am not just a retired federal employee. I worked in benefits for 28 of my 32 year federal career. I am considered a federal retirement expert who upon retirement started my own business presenting retirement seminars throughout the US, Europe and Asia and have authored a national retirement guide. I assure you there was never an election option to receive the supplement and collect a smaller SSA benefit. Please see the following Chapter in the CSRS/FERS Handbook on this topic: https://www.opm.gov/retirement-services/publications-forms/csrsfers-handbook/c051.pdf

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Posted by (Questions: 0, Answers: 356)
Answered on August 10, 2017 1:00 am
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For the record I am not just a retired federal employee. I worked in benefits for 28 of my 32 year federal career. I am considered a federal retirement expert who upon retirement started my own business presenting retirement seminars throughout the US, Europe and Asia and have authored a national retirement guide. I assure you there was never an election option to receive the supplement and collect a smaller SSA benefit. Please see the following Chapter in the CSRS/FERS Handbook on this topic: https://www.opm.gov/retirement-services/publications-forms/csrsfers-handbook/c051.pdf

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Posted by (Questions: 0, Answers: 356)
Answered on August 10, 2017 1:00 am
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I know who you are. I retired after 39 years, so we both have a few rodeos under our belts. Agsin, I assure you I know what I did when I retired, and I’m certainly not going to debate it with someone who has know knowledge of my process. I want to believe when people post things, they have an honest intention of simply getting answers to their questions. I don’t believe anyone has an intent to turn things down a negative path. Hopefully you feel the same way. I’m sure your opinions and/or insight–as well as the insights of others–will prove helpful in answering questions. OPM is not an easy agency to work with, so anything helps, and thank you for helping.

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Posted by (Questions: 1, Answers: 9)
Answered on August 10, 2017 1:19 am
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All, You may or may not be aware, but NARFE is looking into this issue as well. I’m sure they’d welcome any input. Although you may have to be a member to provide input to them…not sure.

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Posted by (Questions: 1, Answers: 9)
Answered on August 10, 2017 2:26 pm

Need to update my position on if the FERS annuity supplement reduces your social security payment. I contacted social security legal and they explained to me that what reduces our social security is if we apply for social security before the time we’re eligible for regular payments. I’m working with OPM to have the document I signed regarding this removed from my records. However, my original question is still my focus. I understand NARFE is investigating this matter, not sure if any other agency is.

( at August 16, 2017 1:32 am)

P.S. My original post was regarding if any agency is investigating OPMs decision to start including the FERS annuity supplement in the formula used in determining how much a divorced retiree will pay a former spouse. It’s my understanding they were supposed to be doing this at the inception of the FERS retirement program–over 30 years ago–but did not. Why is okay to do this now? They are legally correct…but in this case, it doesn’t make it right.

( at August 16, 2017 1:39 am)