How does retiring under FERS with a CSRS-OFFSET component affect my social security benifit?

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Hi all–I am retiring under FERS with a CSRS-offset component and I don’t know how the “offset” affects my social security annuity when I file for my SS benefit at age 66.
I have 8yr, 8mo as CSRS-Offset and know that it is calculated as straight CSRS with SS reducing the actual CSRS dollar portion.
So will my SS annuity payments be affected when I file at age 66? I’m obviously confused! TNX!

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Asked on May 1, 2019 3:34 pm
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I’ll be 56 when I retire with 35 years will I be penalized for not being 62

( at May 10, 2019 6:09 am)
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And I am confused, too! Anyone who has CSRS Offset service and converts to FERS, that offset service becomes FERS service. Could you possibly mean you have 8 years of CSRS service and because of this 8 years under CSRS, your Social Security benefit will be calculated using the Windfalls Elimination Provision formula? Please respond. Thanks.

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Answered on May 1, 2019 3:38 pm
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Hi Elaine–I had federal service time from 01/1980 with a federal power utility (non OPM retirement) then transferred in 09/1988 to an agency in Dept of Interior. I was placed in CSRS-Offset retirement. In 11/1995 was RIFed from service. Returned to service as new employee in 11/1997 and placed back in CSRS offset. In the last open season I transferred to FERS as of 01/1999. So I agree CSRS time from 11/1997 to election of FERS is now all FERS. I still have CSRS offset component between 09/1988 and 11/1995 so the CSRS benefit is reduced by Social Security. After much searching I think I have found the formula that applies to the offset reduction but I would appreciate your time and response. Tnx

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Answered on May 1, 2019 8:15 pm
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The amount of the offset is the lesser of the amount of the Social Security benefit attributable to the employee’s service after December 31, 1983, covered under the interim CSRS provisions or the CSRS Offset provisions; or the amount obtained by multiplying the following fraction by the Social Security benefit to which the individual is entitled (or would be entitled upon proper application) at the time the individual’s CSRS annuity begins: Total Years of Offset Service divided by 40. Example: Age 62 SSA benefit is $1500 and retiree had 10 years as an offset. 10 divided by 40 = .25. Then multiply $1500 x .25 = $375 which becomes the amount of the offset. NOTE: Partial years of offset service are rounded to the nearest whole number, with one half being rounded to the next higher number.

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Answered on May 1, 2019 11:09 pm
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Thanks Elaine. That was the answer I found between when I posted the question and your response.
With time in the federal utility retirement plan, CSRS-offset, FERS election, social security, TSP…it seems complicated to me and getting a callback from HR isn’t easy.
I guess the next project will be determining if I should buy back the time from the fed utility. Thanks again.

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Answered on May 2, 2019 11:44 am
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BIG GEE, can you please elaborate on who “fed utility” is? Re-reading your work history, I understand when you began with DOI in 1988 how you could be placed in CSRS Offset and since you were RIFed in 1995, you only had 15 years of service thus you were not eligible for a Discontinued Service Retirement. Continuing on, when you were rehired you would come back into CSRS Offset with a 6-month window to elect FERS, which you did not do at that time, you elected FERS during OPM’s Open Season. At that time, ALL offset time becomes FERS time and you will not have a CSRS Offset component when you retire. Had you had pure CSRS service of 5 or more years, you would have a CSRS component, but not a CSRS Offset component since you elected to transfer to FERS.

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Answered on May 2, 2019 9:21 pm
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Hi again Elaine–The federal utility is TVA and their retirement is TVA Retirement System. I didn’t elect a retirement option with them when I left in 09/1988 and because I was unresponsive they placed me in “deferred retirement” status. At 65 I began drawing retirement annuity from them, along with “investment funds” as well.
The same is true with DOI when I was RIFed in 11/1995. I didn’t elect a retirement, refund of anything. They did pay me for my annual leave.
So…the bottom line is when I elected FERS, even the time in CSRS (offset) before being RIFed in 11/1995 became FERS time when in made the transfer to FERS.
Well that certainly simplifies the calculations. Please let me ask a few more questions to help me put my confusion to rest:
When I returned to service in 11/1997 and was placed in CSRS offset, had I elected to change to FERS within six months, would that have given me a CSRS offset component?
If YES, then it was the FERS election during the open season that killed it?
If NO, then there was never a CSRS offset “component”. It was either CSRS with offset retirement, or FERS retirement upon transfer to FERS.
In discussions over the years I’ve had many people mention there being a CSRS component to my retirement because that time was prior to the break in service and that any CSRS time after returning to service in 11/1997 would convert to FERS.
One big problem in my retirement planning has been learning how to ask the right questions in front of the right person and for that I again say thank you and thank you for your time.

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Answered on May 3, 2019 6:57 pm
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BIG GEE: No, it does not matter when you elect FERS, whenever you do all offset time converts to FERS service. The only time you can have a CSRS component is if you were pure CSRS with 5 or more years, meaning you were vested in CSRS. Then you would have a CSRS calculated component and a FERS calculated component adding them together to provide your total FERS retirement amount. CSRS ended in 1983. Since you came to DOI in 1988 you could not be pure CSRS.
My concern is that you are collecting a TVA retirement at this time. Please see page 33 of the following link: https://www.opm.gov/retirement-services/publications-forms/csrsfers-handbook/c020.pdf
Here is an example from Chapter 12 of the CSRS FERS Handbook page 49 https://www.opm.gov/retirement-services/publications-forms/csrsfers-handbook/c012.pdf:
EXAMPLE 2: John was employed by the Tennessee Valley Authority (TVA) from 1971 to 1994, when he transferred without a break in service to the Army Corps of Engineers. Since Social Security is a part of the TVA’s retirement plan, John continues to be covered by Social Security. Since John had more than 5 years of potentially creditable civilian service as of December 31, 1986, he is covered by CSRS Offset and has a 6-month opportunity to elect FERS. I hope this all helps!

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Answered on May 3, 2019 10:26 pm
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Hi again Elaine–following the link to page 33 takes me to the section on crediting TVA time to CSRS time. This wouldn’t apply to me since I have no pure CSRS time, correct?
In the FERS section on page 58 of the link under B, 2, wouldn’t that apply to my situation ie: TVA time could be credited to FERS, of course after taking a refund, making a deposit including the 1.3% and interest? Point being that I was affirmatively told that the refund and deposit to earn FERS annuity credit would be offered by OPM upon retirement. Of course there would have to be a number crunch to determine if worthwhile.
I am appreciating your responses and resources because when my retirement decision is made I want to have a greater understanding of my retirement situation as it is explained by HR. In other words I want to be able to be more “conversational” when the time comes. Tnx again.

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Answered on May 9, 2019 4:15 pm