Many workers who made a last-minute 1987 switch to the new Federal Employees Retirement System to protect future Social Security benefits have been told, incorrectly, by their personnel offices that they acted too late.
Just before Christmas, Senate-House conferees put language in the compromise budget bill that exempted employees from the so-called Public Pension Offset law if they transferred into FERS by Dec. 31. When that was reported here Dec. 22, many federal agencies reported a rush of employees who came in to sign up for FERS to beat the deadline.
The Public Pension Offset law applies to people under the old Civil Service Retirement System as well as those who join FERS now. It reduces the Social Security spousal or survivor benefit by $2 for every $3 that the individual claiming it gets in a federal, state or other public pension. The offset doesn't apply to Social Security benefits drawn by the person who earned them, but rather to those unearned benefits claimed by spouses or survivors of someone eligible for Social Security.
Many employees who switched to FERS called this week to complain that their personnel or retirement offices told them that even though they switched by Dec. 31 they are not eligible for the exemption from offset rules because their entry into FERS won't take place until the first pay period in January. But that isn't so, according to the Office of Personnel Management.
An OPM official said yesterday that any FERS transfer action that is dated Dec. 31 or earlier makes the employee eligible for the exemption.
On Dec. 22 OPM's Retirement Division put out this special bulletin (Retirement Counseling Letter No. 7) dealing with two last-minute changes approved by the Senate-House conferees:
"The deficit reduction legislation which we expect to be signed today includes two provisions that you and your field personnel particularly need to be aware of:
"1) Lump Sum: Beginning Jan. 4 the lump sum payable to non-disability retirees will be broken into two separate payments. The first will be payable at retirement and will represent 60 percent of the lump sum otherwise payable. The remaining 40 percent with interest will be paid one year after retirement.
"This change applies to voluntary retirees whose annuities commence after Jan. 3, 1988 and before Oct. 1, 1989. People who separate from service on or before Jan. 2 or those whose last day of pay is Jan. 2 or earlier will not be affected.
"2) Public Pension Offset: If a person elects into FERS by Dec. 31 the public pension offset will not apply. The PPO offset as explained on Page 41 of the FERS Transfer Handbook requires an offset from Social Security spousal or survivor benefits.
"We will keep you posted as additional details become available."
That means workers are exempt from the offset if their applications were dated on or by Dec. 31, even if their entry into the FERS program for payroll purposes is after that date.
The Equal Employment Opportunity Commission is looking for computer specialists at the Grade 13 level. Call Arlethia White at 634-6496.
Office of Personnel Management needs six pay specialists, GS 12/13, and a supervisory pay specialist, GM (merit pay) 14. Call 632-9592.