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I worked as a public pension administrator in California and there's a lot of blabbing going on here. There are a small percentage of 5 figure monthly pensions but not many percentage wise.
Also, the COLAs are ALMOST ALWAYS capped at around 2% depending on the local agency contract , etc. Sometimes there is a COLA bank where sometimes it can result in a higher COLA .
You're talking about one person. When I mentioned it, it was as a couple. A lot of couples who both worked in the public sector have a combined pension income in the five figures.
I will weigh in on this. I think that my FERS retirement which will have a factor of 36 years (meaning 36% times the average of my high 3 income years) I will say that it will have a profound difference. It isn't a whole lot of money but since I didn't get paid a senior executive salary it is not something to sneeze at either. In conjunction with my military pension things look a bit brighter. Add in the fact that I will have a similar number in SS to my military pension and the wife has nearly identical number in SS as I do, our retirement is secure baring anything unforeseen. With a home that is mortgage free and a 401k fund that matches my current value of home, I feel quite fortunate. Even if I stay in this state of high cost of living I can still live comfortably. So in answering the initial question is my pension a boon? Yes but it took two of them to make me feel secure.
GD, I am definitely not the greatest person with math, but I think you may be reducing your pension with your calculation.
Per the OPM web site, with FERS if you have over 20 years of service the multiplier is 1.1 and under 20 it is 1.0.
If I am doing the math right, if the average of your high 3 for example is $100,000 with your 36% calculation that would be $36,000.
OPM's calculation on $100,000 would be $100,000 x 36 x 1.1 = $39,600.
GD, I am definitely not the greatest person with math, but I think you may be reducing your pension with your calculation.
Per the OPM web site, with FERS if you have over 20 years of service the multiplier is 1.1 and under 20 it is 1.0.
If I am doing the math right, if the average of your high 3 for example is $100,000 with your 36% calculation that would be $36,000.
OPM's calculation on $100,000 would be $100,000 x 36 x 1.1 = $39,600.
I hope I am right and you are wrong
you are right but my high three income turns out to be 66k not 100k. I wish it was.
your reading of the OPM site is incorrect. to get the 1.1% you need to work up to the age of 62 which I cannot do. short of that retirement points are
Age Years of Service
62 5 this is an immediate annuity retirement
60 20 this is an immediate annuity retirement
MRA 30 this is an immediate annuity retirement
MRA 10 If you retire at the MRA with at least 10, but less than 30 years of service, your benefit will be reduced by 5 percent a year for each year you are under 62, unless you have 20 years of service and your benefit starts when you reach age 60 or later. This retirement is deadly. It is better to defer this retirement until age 62. In other words bank it and work some place else until you reach 62. Deferment though comes at a cost. You are ineligible to continue FEHB.
Age Formula
Under Age 62 at Separation for Retirement, OR age 62 or Older With Less Than 20 Years of Service 1 percent of your high-3 average salary for each year of service
Age 62 or Older at Separation With 20 or More Years of Service 1.1 percent of your high-3 average salary for each year of service
you are right but my high three income turns out to be 66k not 100k. I wish it was.
your reading of the OPM site is incorrect. to get the 1.1% you need to work up to the age of 62 which I cannot do. short of that retirement points are
Age Years of Service
62 5 this is an immediate annuity retirement
60 20 this is an immediate annuity retirement
MRA 30 this is an immediate annuity retirement
MRA 10 If you retire at the MRA with at least 10, but less than 30 years of service, your benefit will be reduced by 5 percent a year for each year you are under 62, unless you have 20 years of service and your benefit starts when you reach age 60 or later. This retirement is deadly. It is better to defer this retirement until age 62. In other words bank it and work some place else until you reach 62. Deferment though comes at a cost. You are ineligible to continue FEHB.
Age Formula
Under Age 62 at Separation for Retirement, OR age 62 or Older With Less Than 20 Years of Service 1 percent of your high-3 average salary for each year of service
Age 62 or Older at Separation With 20 or More Years of Service 1.1 percent of your high-3 average salary for each year of service
Hope that makes more sense.
Thanks for the clarification. Sometimes I find reading Greek easier to understand than the language of OPM At age 63 in 4 year and with my year buy back I hit the magic 20. I plan to go to 66 to enhance my TSP, Pension, and SS but we will see how life unfolds between now and then.
PS - There are people here and I am one of them that have great respect for your knowledge on many
topics and your sharing of it has been greatly appreciated.
Thanks for the clarification. Sometimes I find reading Greek easier to understand than the language of OPM At age 63 in 4 year and with my year buy back I hit the magic 20. I plan to go to 66 to enhance my TSP, Pension, and SS but we will see how life unfolds between now and then.
PS - There are people here and I am one of them that have great respect for your knowledge on many
topics and your sharing of it has been greatly appreciated.
You are welcome. I would like to have got to 62 but having all of those years counts for a lot. You have a great plan and I hope it will work for you. You are in my honest opinion going in the right direction for you.
Thanks for giving me the correct info. When I made several inquiries about this to my retirement counselor because I saw calculations she did for me with 100%, 50%, and 25% she gave me the impression 100% would provide 100% death benefit. Glad I started this process early because so much info I had to clarify again and again.
My pleasure. In fact, one of the main reasons I started participating on this subforum many years ago was because I thought that with my federal benefits background, I could be a resource to federal employees such as yourself who are contemplating or planning for retirement.
Quote:
Originally Posted by Nightengale212
One big one was my SCD. I kept seeing a date that was a year before I actually began working at this VA this go around. I finally discovered that SCD date was calculated on giving me credit for the previous 1 year and 23 days when I worked at the VA in the mid 80s. Great I thought, but my counselor forgot to tell me that I needed to pay for that time because I had cashed on the $100 or so that was in my retirement account when I separated from services the first time around. Would have been even better to have know this in 2001 when I went back to work for the VA because with interest tacked on that $100 grew to $1,000 in 15 years which I paid right away when I learned about this.
Thanks again.
In your counselor's defense, there was no provision in law back in 2001 that would have allowed you to pay back the money you withdrew. IIRC, the law was changed shortly before I retired in late 2009 or early 2010, so your HR office should have informed you about that change at that time.
The one surprising thing in this scenario is that the deceased employee's benefit extends to a surviving child. The public pension scheme with which I'm familiar (not disclosed, to protect the guilty) offers benefits only to the surviving spouse. It is not possible to designate a beneficiary (child, sibling, boyfriend/girlfriend, parent, etc.). It is of course possible to designate a beneficiary for defined-contribution employer-offerings (401k), but not for traditional defined-benefit annuities.
Not to venture too far askance from the point of this thread, but one consequence of pension-beneficiary law is the promotion of marriage. If a single person dies, his/her pension dies with him. Moving even further askance, one would have thought that a pension-eligible older public-sector employee, who happens to be single, would be an appealing marriage-prospect. This however is not necessarily the case in real life.
That last part made me laugh out loud! I'm a public-sector retiree, single (divorced), and back when I tried online dating, it never occurred to me to put THAT in my profile to lure someone in. Hahaha.
I could have made my daughter my beneficiary and taken a lower benefit. I wondered who would do that--I figured someone with a disabled adult child might seek that option. As it is, I took the highest-possible amount, the single allowance, and all payments stop at my death.
My pleasure. In fact, one of the main reasons I started participating on this subforum many years ago was because I thought that with my federal benefits background, I could be a resource to federal employees such as yourself who are contemplating or planning for retirement.
In your counselor's defense, there was no provision in law back in 2001 that would have allowed you to pay back the money you withdrew. IIRC, the law was changed shortly before I retired in late 2009 or early 2010, so your HR office should have informed you about that change at that time.
I can't tell you how much I appreciate the Fed and SS pros here that are so generous in sharing their expertise!!!
Maybe I am too OCD regarding my Fed retirement planning, but I have to be proactive because it is not an easy process to navigate. As hard as it is to believe, I actually have colleagues who have been in Federal service over 20 years and don't even know how much money is currently in their TSP accounts and where their funds are allocated because they never bothered to get a PIN to access their accounts!!!
As indicated by post #5, this may actually be an insurance payout. When I retired from the military, I elected to buy a one-time-offer-no-changes-permitted life insurance policy that is paid out of my retirement. If I die prior to my wife, she will continue to get an amount equal to half my retirement pay until she dies. This will not be a government payout, however, it will be an insurance payout.
Quote:
If you select this option, your monthly payment will be smaller because we calculate the amount that would be necessary to pay specified payments for both of your expected lifetimes, taking into account both of your ages at the time of your retirement. If you choose this option, you cannot change it later unless your survivor dies before you do or you get married or divorced.
I'll bet that "monthly payment will be smaller" went to an insurance company.
This has been in the news here in Knoxville lately. There was a period of time in which TN state employees could name children as survivors. The rules have been changed going forward to make it only for spouses or for children with major disabilities who would have been dependents for life on their parents. This has created a potential major drain on the TN pension resources, so it was eliminated for current employees. For those already retired with this in place, I would say "yes it is a boon for their non-spousal survivors who were named as beneficiaries.
Last edited by TheShadow; 05-06-2016 at 07:58 AM..
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At age 63 in 4 year and with my year buy back I hit the magic 20. I plan to go to 66 to enhance my TSP, Pension, and SS but we will see how life unfolds between now and then.
