Military Deposits

Military Deposits


. .>>Good morning, everybody. How is everybody
doing? We are here this morning to talk about Military Deposits. We have a lot of information
to cover. What I wanted to point out first is — first of all, let me introduce myself.
My name is Karen McManus and I work in the benefits officers training and development
group. I work as a liaison between the retirement program and the agencies. We write guidance,
work on the handbook, and give answers to the headquarters retirement counselors. I
worked in OPM for over 20 years. I started in the FURS division. That is a little bit
about me. What we are here to talk about today is Military Deposits. There is a lot of information
to cover here. We can
get into military recovered pay, or to USERA, but we will focus on Military Deposits. We
will touch on you Sarah — USERA, only as it pertains to Military Deposits. I want to
stress a couple of points. We have folks here in the audience. Are there any employees — anyone
that is not a benefits professional? We have a couple. That is great. This broadcast is
for employees and agencies, and I will be reviewing both — important things for both
the agencies and employees to focus on. So, I am sure we have a lot of employees watching
on the webcast. We will keep this very focused on deposits. Before you even start talking
about a deposit, we have to talk about the credibility of the military service. What
happens here is you have an employee, and they are under the first retirement system,
and in other case, — either case, they would like to make a deposit so the case can be
credible. The first thing the employee is going to do is get a copy of their DD214.
We will talk about what form the employee can use. They need to contact the military
and they are going to get a copy of their service record, and bring it to the agency.
They will look at the military service record, and they will try to figure out, looking at
that DD-214, is the service credible. What the agency is looking for is is it active
and is it honorable. The other thing that has to be on that DD-214 is the beginning
and ending dates of service. The first slide that I have is a slide that talks about service
that is not credible. It says right at the top of the slide not credible. When you are
looking at the DD- 214, if the employee has an honorable discharge, that is a good place
to start. That is looking good. They will probably get credit for the service. If the
discharge on that DD-214 has any of the other things written — dishonorable discharge,
clemency discharge, neutral or uncharacterized discharge, or officer dismissal, it starts
raising questions, and will probably not be credible. It is important to note this is
not a policy decision, but the law. The law says in order to get credit for service it
has to be honorable. I will talk a little bit about these types of discharges. I think
dishonorable is self- evident, what that means. A clemency discharge — does anybody know
what a clemency discharges? You know, when somebody is in the military, and they make
the decision they want to leave, but they are not doing it officially through the appropriate
channels, the military does not like these kind of discharges. What normally happens
is a person selects a country, say Canada, move to Canada and say I do not want to be
in the military anymore. What the military will do is give that person a discharge on
their DD-214, and it says clemency discharge. The service is not credible because it is
not an honorable discharge. Any other type of discharge that we see that we have more
issues with is the neutral or uncharacterized discharge. What generally happens with folks
is they graduate from high school. They are 18. The a.k.a. service to go into, — they
pick a service to go into, Army, Navy, Coast Guard, stay in the service for a few years,
and we’ve. What is the first thing — leave. What is the first thing you do? Basic training.
Some say this is not for me, it is to physically demanded — demanding. It is a mutual decision,
with the Army saying this person will not make it, they have selected the wrong thing
to do with their life. Because the military will discharge this person, but the military
thinks they have not had enough time to make a judgment about this person, they are leaving
the service in a short time, whether it be weeks or months. We will discharge them under
a neutral or uncharacterized — because we have not known him long enough — to make
a decision about whether there service is honorable or dishonorable. When somebody comes
with this kind of discharge, it is not credible. Where we see issues with this is some people
have careers in the military where they have had military service, two years, four years,
or whatever, and then the military sends them to a school for a short time. They will go
to a school for weeks or months and get a second — separate DD-214 for that time, the
school will issue them a DD-214, and the school say we did not have them long enough to characterize
their service and that becomes a problem. Now, the person says I have an honorable discharge
for all of my other service, why are you not crediting me these few months, and OPM says
this is the law. OK? We can only accept discharges that are honorable, and that is all we are
looking for. If it does not say honorable, we will not give them credit. The person in
those situations has to go back to the military and ask for a different discharge. They have
to get honorable discharge on the DD-214 in order for us to credit that service. We see
a lot of people being called up, and even those folks going to schools. We want to make
you aware of that. That is the law. OK. The other thing you are looking at when somebody
comes into you with the DD-214, you are looking to see what kind of service it is. There are
basically two types of service — title X. Does anybody know what title X military service
is? ) it is federal service — right, it is federal service. If somebody is 18 and enlist
is that title 10 service? It sure is. What is the other type? Reservist, working for
who? A state. That is not federal. What is the title, does anybody know? 32. When you
pick up a DD-214, and it says title 10, you will probably get credit for that service.
When it is title 32, you have to stop and take a look at this service. Title 32 service
is only credible if it is performed under USERRA and interrupt somebody’s federal career.
If it does not do that, it is not credible. There is more information about that in the
handbook. In other thing I recommend, if you are an employee, this is where you want to
talk to your personnel office. We have the www. OPM.gov/retire, and there is a benefit
section there. The benefits officers at the agency level can go in and see where the headquarters
area retirement counselor is, and they can contact them to get further information. We
have a network because of the millions of employees that we service and we have a little
benefits officer office. We work with headquarters retirement counselors, and these agencies.
That is where you can get the listings of who this headquarters counselors are. If you
need help in determining if services credible or not, go through that network. OK? All right.
Now, we’re getting closer to the topic of the day, which is in order for the service
to be credible, the deposit has to be made on service that was performed after 1956.
Before 1956, they can get credit for it. I am sure you are saying for it — fewer employees
with military service prior to 1956. Most will have had service after 1956. You have
to go to the DD-214 and figure out the beginning dates and the ending dates. You’re giving
them total years, months, and days, and the other thing you are using the DD-214 for is
to determine the periods of military service. You can have more than one DD- 214 in one
period of service, is what you are looking for is a break of one day. They will pay a
deposit for each of their periods. Now, how much is a military department? We have to
get total earnings from the military, if they are under CSRS, their deposit amount is 7%.
If they are FERS, the deposit amount is 3%. That is what we are basing the deposit on.
There was a point in time where these deposit rates changed and went up a bit. You know
how Congress likes to play with these deduction rate amounts. They are doing it now, too,
but in the end they put it back down to 7%. This was done between 1999 and 2001, so if
you have someone during that timeframe, you have to charge them a higher amount. The same
thing happened with FERS. You are looking at total basic pay, and you have to get that
through the military. It does not include allowances, flight pay, combat pay, etc. Who
is eligible to make a deposit? This is really important. You notice that it shows the person
has to be under deductions, under CSRS or FERS or CSRS offset, and that means an employee.
Can retiree make a Military Deposits? No but because they are not under deductions, right?
Military Deposits must be paid to the agency. It is structured that way in the law. As an
employee, you have to work with your personnel office to get Military Deposits paid. You
cannot go through OPM. We do not accept the payments and we do not calculate the payments.
That is why your first step is to go to your agency, and your agency will be doing everything,
determine whether the service is correct or credible, computing the deposit, and they
will be billing you for the deposit. They will be accepting the money and transferring
the money to OPM. The agency does everything with Military Deposits. OK. And this is true
even when there is a survivor of a deceased employee. They will still have to go through
the agency to make the Military Deposits in the same manner the employee would. This is
somebody who — the employee had not made a decision yet, they died in service. A survivor
can go ahead and make the Military Deposits as long as they are entire — entitled to
a survivor annuity. Yes. We have a question.>>How much time –>>The question is how much time should the
agency gives a survivor for doing a deposit, and that is a serious question because many
survivors do not want to start working on this issue right away after the death . They
are not ready to emotionally think about making payments. So, we do not have a timeframe,
and I know from the death claims section we have ended up sitting on cases for almost
a year before we finalize them. So, obviously, nobody wants them to go on that long because
that is not good for any of us to have these cases that are not finalized, but we do not
have a standard answer for that. You will just have to work with them. We do not have
any requirement other than it has to be made to the agency. OK. Who should make a Military
Deposit and the effect of not making a deposit. We have till your retirement systems, CSRS
and FERS, and the rules are different under each. If you are under CSRS and you were hired
before October 1, 1982, you can then not major Military Deposits — make your military deposit
and use that service in the calculation of your annuity, however at the age of 62 if
you are for Social Security, we will remove your military deposit from your calculation
and you will not have the opportunity at that point to pay your Military Deposits because
you are an Inuit now, and you have to make your deposit to your agency. We cannot accept
it. This is a very specific circumstance. They have to have been employed under CSRS
prior to October first, 1982, retired before the age of 62, did not have to make a deposit,
use this in their annuity, and at 62 if they are eligible for Social Security, we will
remove military service. They can avoid that by paying the Military Deposits. If they avoid
— if they pay the Military Deposits, they do not have a pump on. This situation is also
true if you were hired after October 1, 1982. The only thing I will add here is if you retire
as an employee like this, who was hired before October 1, 1982, and you retire after the
age of 62, you have to look at your Social Security eligibility. If you are not eligible
for Social Security, you can use the service and not pay for it as long as you’re not eligible
for Social Security when you retire. Under FERS, you pay for it, you get credit. You
do not pay for it, you do not get credit. It is very simple under FERS. All right. Now,
we will get into the responsibilities that I have touched on — what the employee does,
what the agency does. This is the employee service and I have to keep reiterating how
important it is for OPM to get what we would refer to as a clean case, a case where all
of the work has been done, basically, with deposit paid, service documented, and it is
very clear what this person is entitled to. The cleaner the case is when it gets here,
and that would mean in the situation at the agency determined that the service is credible,
and you accepted the payment in full, and you forwarded the final IOR to show that the
military deposit has been paid. It is important that we get those things into OPM because
it speeds up our processing, right? The better quality case, the faster we can get someone
into final payment, and they are happy, and we are happy. That is the idea here. That
is why we have these sessions, so that we are all on board with what we need to do to
get the retirement cases done accurately and in a timely manner. All right. [INDISCERNIBLE]
Yes, I have a slide. Does the agency have to include the paperwork, and the answer is
yes, we are asking that the agency includes in the retirement package and I will go through
the forms we will be asking you to include. First thing the employee will do is go to
the personnel office and say I want to make a deposit and the agency will give them the
military deposit form, at this point the agency will have to sit down with the employee and
talk about whether it is beneficial to pay this deposit, and they have to give them a
rough estimate. They will not know the whole military deposit, but at the same time, the
employee will be like what does the difference, two years, three years, four years, mean to
me in my pocket? Will it be worth it to me? You have to give a rough estimate showing
CSRS and FERS service with and without a deposit paid. It is an estimate. You will not know
the real, accurate numbers until you get into this and get into all of the data. So, OK
— what is the data you need, the DD-214, the election form, the employee can submit
an SF 180 if they do not have a DD- 214 to show what their services, and then they have
to — their service is, and then they have to get the earnings, the earnings that is
estimated from the military, and the form to get that is a 20-90 seven. These forms
are all available on the OPM website, OPM.gov/forms. Put in the number that we have in the slides
for the form, and the form will come right up, and you can take a look at it, fill it
out, and talk to your agency. OK? That is where we get the forms. Now, the payments
for the military deposit have to be made to the agency and they can be done in a lump
sum or installments, and again, I will be harping on this — because this has to be
made at the agency, you cannot walk in the month before retirement and expect to do installments
on a military deposit. It will not work out. If you are moving into retirement, or you’re
within six months of retirement, you will have to make a large installment, or lump
sum payment, because it has to be finalized before that date. Now we are moving in to
what the personnel office does. The personnel list will explain the effect of not paying
the post-56 deposit. They might not get credit for the service. The counseling employees
to document the basic pay earned as soon as possible. So, from the employee perspective,
there are a couple of reasons why he would be a good idea to pay the military deposit
sooner rather than later. I know this is hard because when somebody is first tired, they
are not really listening — hired, they are not really listening, and then they have to
be blasted with e-mails to look into this deposit. Why is this so important? Is it easier
to get records from a large bureaucracy five years after you left the bureaucracy, or 40
years after? Which one do you think is easier? Five. Day one. The sooner you do it, the better
quality records you will get. The military has millions of people they have coming through
their doors, and so does your agency, so the sooner the employee starts on this, the better
for them. They’ll get higher quality records. That is number one. The other thing, and we
will talk about this in a second, as somebody is hired many have three years where they
do not pay interest. We know about compounding interest. We like thrift because that is compounding
interest, but you do not like the magic of compounding interest when you have a bill.
You do not want that on your credit card and it is the same concept. You do not want the
magic of compounding interest on your military deposit. It will not be pretty. Get in there
on those first three years, get the records, and figure out what you want to do. A member,
you can do this in installments. — remember, you can do this in installments. A lot of
times, they will say I just started and I have all of these bills. You can get on an
installment program, and in the first three years you are doing it interest- free. It
is important to see what it would cost because it would cost you more in dollars the longer
you wait. OK?>>I have a question.>>Sure. [INDISCERNIBLE]>>We have a question about the interest.
I will talk more about this in a minute, but I will answer it right now. He asked, if you
do not pay your deposit in the interest-free three years, when you do pay it, and let’s
say you go in at the five-year mark, do you pay interest for it we will years, or on all
five years — two years or on all five years, and the answer is on two years, and I will
explain why in a second. OK. The other responsibility is to go through the paperwork with the employee,
and help them determine if it is worth their while to go ahead and make this deposit by
giving them the benefits estimate. Forms — the agency accepts the forms. They might have
to assist with the verifying. I know a lot of agencies really have to help depending
on the situation and what kind of military service is very it might take several — it
is. It might take several attempts. It can be a very involved process. So, this is all
with the agency does. There is form 1514, where the agency can compute the interest
by hand. Amazingly, I know some agencies to do this by hand. Others have calculators that
can do this for them, or programs, so this is agency-by-agency, so you will have to talk
to your agency to figure out what your agency has available. We also say that the lowest
payment in most agencies will accept is $50, but, again, that is off to the agency. Your
agency probably has very specific rules and you have to talk to them to find out exactly
what the rules are for this. Were there questions? The other thing the personnel office does
is establish the deposit account, enter the payments and keep track of it on the 1514
or by another means, and the final thing the agency does, and from OPM’s perspective, this
is the most important thing, cutting the IRR , showing the deposit has been fully paid,
and you’re ready to transmit it to us when the person retires, separates or dies. Yes?>>[INDISCERNIBLE]>>The question is when you have an employee
that makes deposits, and then transfers agencies — they will have to transfer the deposits
to the new agency, and the new agency should accept what is already done. They should not
back out refund a partial payment. It should transfer over and the payment should continue.
The employee is going to have to work with both agencies and make it clear to them that
this is an ongoing payment. It is just the same kind of thing that — when somebody transfers
and they have a TSP loan, it is not done automatically. This is something employees need to speak
up about so that is not missed. Just a couple of other questions here in the audience. Go
ahead.>>You cannot retire unless you pay the money,
right? So, can the person use his TSP before they retire?>>The question is if somebody has to pay
a military deposit before they retire, would it be possible for them to receive a payment
from the thrift? It is an involved question because you cannot just take money out of
your thrift. You could probably get a loan out of your thrift and you have to give them
a reason to basically loan yourself money so that when the thrift pays out they would
take a loan you have already received into consideration, and then you would pay taxes
on it. The issue here is you just cannot — getting into your thrift is based on your age, and
whether or not you have separated, so, you cannot just take money out of your thrift
without tax consequences.>>the reason I am asking — [INDISCERNIBLE]>>That would be your age.>>At that time could you take money out?>>Is question is if you are 59.5, could you
take the money out, and yes, you could be penalized, and the way to go around I would
be to take out a loan so that you would not pay a penalty. This is something you would
have to work out with the thrift, and involved consideration and you would want to talk your
personal department about that. It is possible, but you would want to talk to them about it.>>If we start making the payments, does the
interest stopped at that point?>>I will talk about the interest more in
a second.>>OK. Asked the question here is — I do
not want to forget it –>>The question here is, I do not want to
forget it, does a crewman when you start making — a crewmen of interest up when you start
making payments, and the answer is no. Yes.>>[INDISCERNIBLE]>>The question is what happens when someone is making installments,
and makes a partial department — deposit, and then they retire, we will refund the money
back to the individual. If we receive a partial military deposit at OPM. We cannot accept
payments. We would have to refund the military, and the person would not be able to make it.
That is why they would have to establish with their agency that they are going to pay this,
and they want to complete the payment on that IRR, the record that is right here on this
slide. We have to get that final IRR fully paid. All of their documents are sent to Reuters.
We have an operation center in Pennsylvania. All of these persons records when they separate
will be stored by OPM, and when that happens, we do not automatically just pay somebody.
We do not know what they are going to do. They could go get another job. We receive
those records, and we do nothing. After 30 days of being separated, if an employee wants
to get a refund, you can apply for a refund of everything, not just your military, but
of all the contributions you have put into the CSRS or FERS retirement fund. There are
heavy implications with that, and under the new rules, if you are reemployed, you could
pay them back, but it is something to consider whether or not you want to do that or not
because you will get hit with interest on repaying the money. Does that answer your
question? OK. So, one of the other forms, we are still going through the forms, this
is the survivor form, 1519, and it merely shows the intent to make the election. As
it has been pointed out, this is a big decision for survivors, and this is the first step
in talking to them and giving them the estimates, helping them understand what the implications
would be if they did or did not pay it. They have a form with their — where they mark
whether they intend to pay it or not. The SBA form like that for employee — there used
to be a form like that. Employees no longer tell us their intent. They go through with
it or they do not go through with it. The only other way we would know what the intent
is of an employee, and this is an important point for processing — it is important for
employees, and it is important for the benefits personnel. What we referred to as the DASH-
1, they list the service they think they have, and hopefully what they think they have matches
up with records we have stored. That is a perfect world, back to clean cases and messy
cases. A clean case would come in, somebody would write on their certified summary of
service I had military service, non- deduction service, service under CSRS, service under
FERS, and this is all of my service. What we have on our end as far as IRR’s or payroll
documents would match that. It is important that the agency makes sure what is on the
certified summary is correct, and it is very important if the intent of the employees to
pay the military deposit, even if it has been paid and you have all of the documents, that
you write that it has been paid, because what could happen? When the personnel office is
done with the application, would they send it? The payroll office, and what happens if
the payroll office as it? — has it. They set it. They said to OPM and lawyers. That
is three hands that touch your applications before it is finalized, and sometimes records
disappear. You do not want to be one of those people. You want to be clear and you want
your employees to not have missing records. You want to be abundantly clear what that
person has so that there is no confusion later. OK. The other thing that the agencies do is
counsel the employees and the survivor on the implications of not paying the deposit.
You have to document the earnings, estimated earnings, actual pay records, because here
we come to more involved issues — I am back to talking about people who enter the military.
We put out a BAL, and it talks about when somebody is placed, the agency would put someone
in that and they are called up from the military. There are new laws passed in the early 2000’s
that affect them, the universe — uniform service act, USERRA, people that have military
service that interrupts their federal career. We see a lot of that. We get this all of the
time now. Depending on your agency, you could have been a lot. So, with these folks, and
just these folks who have service that interrupts their federal career, they have two computation
methods. Regular computation would just be what we described this morning — basic pay,
looking at whether they are under CSRS or FERS, taking 7% or more three percent depending
on what retirement system they are under, and you calculate a deposit. We have not gone
to the interest yet. The other thing to consider, if somebody is on leave without pay, can they
still get payments from their agency? The answer to that question is yes. How would
they get a payment? What happens when you put someone in leave status, sick leave or
annual leave? What happens when they take sick leave or annual leave? Do they get paid?
Do deductions for FERS or CSRS, out of their salary? Yes, they do. That is all we are referring
to. They still have sick leave and annual leave. They decide to take a day for whatever
reason, and they can even take the days around the holiday weekend and get paid for a holiday
on top of this. This becomes an issue because who is keeping track of this? What we are
talking about is a Military Deposits looking at the earnings, but you take away the days
they have already paid, so somebody has to know when they took leave so that they can
remove the days that they have already paid. What is the best source to find out when these
days were paid? Your payroll office. We got that answer in the audience. Your payroll
office is your best source, but what is another source that is pretty good and that you need
to, as an employee think about? You. The employee needs to talk to your benefits people. They
need to talk to their supervisor, and the second person they need to talk to is their
personnel office. Any to get in there and start a conversation. Your personal office
is not your enemy when you are in leave without pay, they are your friend. You want to talk
to them, tell them when you are taking leave, find out what benefits you have to pay for
and how you pay for them. There are a lot of issues. It is not just as simple as I walked
out of the door, and I never have to think about my agency the whole time I am on leave
without pay. It is not quite as simple. I cannot emphasize enough that employees need
to talk to personnel offices, and personnel offices can send those blast e- mails if you
are aware you have anyone in the agency being called up. Remind them to get in there and
talk to you guys. So, you have to know when the person is in leave, and the same is true
for the alternative method because what these people are going to be able to do when they
return to the agency — they are going to have a choice. They can pay the standard Military
Deposits, or the regular method, or they can go with the alternative, and the alternative
is they will not pay more than the deductions they will have paid under the civil service
or FERS retirement system while they were out. So, we know that the Military Deposits
is 7% for CSRS and 3% for FERS. What is the general — we’re not talking about law enforcement
officers or Capitol Hill — what is the general CSRS deduction rate for a CSRS employee? 7%,
right. What is the general rate for a FERS employee? .8%, as long as they have not been
hired in the last several years. This is a general thing you are thick and about. 7%
and — general thing you are thinking about. 7% and 3% as opposed to 7% and .8%. We are
going to remove what? The leave with pay days. We will take those days out. We still have
to keep track of them. And it is before interest. We are looking at this deposit before interest.
I want to get to another slide here. Here we have the deposit rates, and here we have
the rates for FERS. We can see that in 2013 there is a new FERS retirement deduction rate
that came out, it will be 3.1, and we know there is another coming in 2014, and we have
not put the guidance out yet. I know it is in the pipeline. I’ve seen drafts of it. We
should have as soon posted on our website. You can get information on the new rates.
This is for new employees. There are some rules governing this as far as having previous
service. It is basically new hires that will be affected. OK. The other thing I wanted
to say about this is the question I get here a lot is “OK, I have to give this person a
comparison, but what if it is blatantly obvious which one is better? Do I actually have to
do the math? Our answer to that is we have delegated the responsibility for computing
these deposits to the agency. That is the way the law was set up in 1956. Basically,
it is your decision. We are not looking at when we get the documentation in to make sure
you have physically done these computations. The flipside of this is you have to be talking
to your employee. If the employee says I want both of them, I would do it for them because
this is about them making a decision, and you helping them make the best decision for
them. If it is blatantly obvious, and they are under FERS, and they are under strain
FERS, — straight FERS, and have .8% deduction coming out, the other thing that plays into
this is where is their salary higher? Where do they make more money? Are they being paid
more in the military, the civilian job? Have an impact on this as well. You have to sit
down with the employee and look at it. They get to make the choice. It cannot be higher
than what they would have paid as a civilian. All right. Now, we’re going to talk about
the interest, which has come up a couple of times already. Basically, the whole concept
here is a three-year grace p eriod. Both CSRS and FERS provide a two-year grace period,
and then you establish your interest accrual date, and from that point you have one year
for interest to compound, and because it is compounding, you do not actually get charged.
You get a three-year grace per iod, and this is the part where the employee understands
they have no interest, and they should consider paying the deposit as soon as possible so
that the interest is not accrue. This is the way it works under SF, people hide –under
CSRS, people hired in the 1980’s, and you will see these folks, cross your desk. There
was a question about IED in this timeframe. What happens is for employees hired under
CSRS before October 1, 1983, interest accrues after October 1, 1985, and if they were after
1983, interest begins two years after they were under deductions. The bottom one is the
same for FERS, hired January 1, 1987, interest accrues after they were first hired under
deductions, and the first employed on October 1, 1887, it is the crews on October 1, 1989
— the first accrues on October first, 1989. If they elect FERS, they do not have a CSRS
component, and interest begins to accrue two years from the date of transfer. So, that
is very specific. They have to elect FERS to get that. OK. What else do we have here?
The IAD. So, once you establish what the IAD is, once you figure out either they were hired
on a specific aid or had a — specific date or had a FERS, you have to figure out when
the date is, foremost would be two years after they were first counted under deductions when
they returned from the military. Once you establish the IAD, it is theirs every year
for the rest of their service until they complete full payment. They will be charged interest
every year on the IA until the payment is made in fullD. OK? That is the last bullet
— the IAD falls each year on the anniversary of the first IAD until the deposit is paid.>>I have a question. If you have several
periods of military service and DD-214’s and –>>The question is if you have several different
DD-214’s, how do you establish an IAD? It is established for each period of service.
Let’s have someone that went into the military at 18, at a couple of years, and they are
first hired by the federal government when they are 26. The first IAD for the first period
of service would be when they are first hired at 26. The survey work until they are 35,
and they are called up in the National Guard for a federal purpose and they have interrupted
their federal career. Now, they have a new period of service they go out on, are in the
military for an active year, on active duty, they return, want to make a deposit, and they
get a new IAD for that period, so each is handled discreetly by itself. It is only if
they have — it all comes down to when you were first hired after you had the military
service. If all of your service was before your first hire date, you have the same IAD.
If it interrupts, you will have multiple IAD’s for each period of service. Does that make
sense? Yes?>>If you have a number of IAD’s — Asked
the question is if a person has a number –>>The question is if a person has a number
of IAD’s, can they choose which to pay any answer is yes. Enough to pay for all of them,
but you have to pay each in full. You can pick and choose.>>[INDISCERNIBLE]>>Will they wrap it up in one payment? No.
Unless you are asking the agency to do that, these are discrete payments. You will figure
out what the IAD is. You will have a payment structure for the first period, and then they
would have to do a second calculation. They may be able to add together for you and tell
you to pay it, but they will still have to track it as two separate payments, because
it is. OK. This is still saying you have a three-year grace period. Here is a picture
with a diagram. You’re covered, you have two years of grace, and then your IAD begins on
your third year. Here is an example under FERS, somebody performing service from 3.10.86,
he get there for civilian service on 8.22.89, and every year on August 22, they will be
charged until there IAD is complete. Interest rates are computed on a calendar year basis,
otherwise you get an IAD that incorporates three and 65 days, but it will be from your
— incorporates 365 days, but it will be from your IAD date. OK. Now, questions. Do we have
any other questions in the room? Yes?>>As for military buybacks in FERS, if somebody
has paid their Military Deposits in full, and then come to find out they were a FERCA
case, and they were under FERS, and should have had the option of being under CSRS, there
would’ve been a significant difference in the amount paid, based off of 3% versus 7%
of their earnings. So, will that happen — if that happens, will they eat the costs and
cause it is a staffing error?>>OK, she asked a very specific question,
and I want to make it clear I am given a specific question because if she asked a different
question she would get a different answer. She is asking if you have a FERCA error, and
the person is in FERS, and they should have been in CSRS, that is very specific. Every
error is different. It is the answer for someone who is FERS and should be CSRS. In that case,
when you have a higher deposit amount, you would provide the employee with the new deposit
amount, explain to them that they can pay it, or they have an option of choosing an
actuarial reduction in that instance because of the higher payment. There is a actuarial
payment that they can choose where their annuity would be reduced every year for the rest of
their life, but they would not have to pay the deposit. That is the only situation where
you get an actuarial reduction on a Military Deposits.>>Would that be the general actuarial?>>yes, it is the same actuarial reduction
used for redeposit.>>Now, I am sorry. Can I do a follow-up and
reverse that, if you are CSRS, and you should have been FERS?>>if you have somebody that is CSRS, and
should have been FERS, the deposit is smaller, and you will refund the excess money to them.>>Thank you.>>All right. Are there any other questions.
We have two from the web. It’s read them and see what we got. — let’s read them and see
what we got. All right, “how do we verify active duty service was under title 32 if
it is not reflected on the DD-214?” Wow, that is a tough one in that there should be something
on the DD-214 to tell you something about that service. You really have to look for
title 10 and title 32. If you are not seeing title 10, and it is not clear what kind of
service this is, you have to go back out with the employee and get the actual orders that
they had. I have seen a lot of crazy things over the years, and it is not always credible.
It is just not. The other thing we’re seeing more of, particularly in the National Guard
— the use of DD- 214 four service that is not credible for our purposes here today did
not used to use the DD-214 as much. We are seeing a lot of DD-214’s that are not credible.
So, if it is not clear to you, I I would first go out and try to get the orders or a corrected
DD-214, and your next up would be to rely on the network for your headquarters benefits
officer, you should go to them, they will end up with us, and we will have to physically
look at the documents to make a decision about whether or not it is edible. — credible.
Yes?>>Should that not be the employee’s responsibility
to verify?>>) one of the agencies is asking in that
situation — right, one of the agencies is asking isn’t that more on the employee, and
we get into this all the time. The employee has to do something here. If they have a DD-214
that is not good, they have to come back and ask for orders. They are in a better position.
You have to have your Social Security number, you have to know where you were working. You
have to go out and get the most precise records. — the most precise records that you can,
and it is better that employees do that because they are in a position to know what they did,
where they serve, whether Social Security number is, and all of that good stuff. So,
the more that employees help the agencies, the better. OK. Any other questions on the?
All right. Another question we got is “how do we verify if active duty service was under
title 10 or title 32?” Oh, it is really the same question. I have the same answer, go
back out and asked her more documentation. The orders are the next step. They are National
Guard situations. All right. If we have no more questions — we have time. Does anybody
have anything else? All right.>>[INDISCERNIBLE] Everything makes being
packages — [INDISCERNIBLE]>>Well, we have discontinued the 15-15.>>OK. And in June we sent out a BAL. That
is a recent thing.>>I guess I put it on the dash>>) — right, we are asking for copies of
what you got from the agency, or the employee. Give us the military, and give us the DD 214.
We are asking for documentation. No, we discontinued that. The 15-15 was discontinued this year.
That is a recent thing. We are asking that you put it on the dash 1. We are just asking
for copies of what you got from the agency employee, if you got orders — Right. The
15-14 would be the former you actually compute the deposit. The Postal Service request status
well to show that it is a zero balance. Again, they don’t have control over the IRR, which
is coming from the payroll. That is the next step. You’re just giving us another piece
of information to show that this is what has been done. And that is what we’re are doing
on our end. We are just trying to match up to make sure that you look at the estimate
we provide. Are you looking at the document surface to make sure it matches what we have,
and the 15-14, including that would be helpful to make sure it matches the 2806 or the 3100.
It is all part of it. If we get the IRR and it says paid in full, that is the preeminent
document in our minds. That is the most important piece of information. But you can send in
supporting documents. Let’s go back to that. There it is. It is just listing everything
that you would hold onto. We are happy to get — more is better, you know? Less is not
more interns of — in terms of the retirement package. More is more. Is there anything else
anyone has questions about? All right, then John, I think that’s it. We thank you for
coming and we are very happy that you have signed in today, and I hope everybody got
something out of this. Thank you.

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