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Benefits Payable When You Retire

Benefits Payable When You Retire

When retiring from the Department of Labor, you will want to receive the benefits to which you are entitled as quickly and efficiently as possible. You can do a lot to expedite the process. The following outlines the benefits to which you are entitled and the decisions that you must make when you retire. Your servicing personnel office will answer questions that you may have about these benefits or about the separation process.

YOUR ANNOUNCEMENT.

If possible, give your managers and servicing personnel office at least two months notice of your retirement. This is to ensure timely processing of your separation documents by your servicing personnel and payroll offices. This much notice gives you and your servicing personnel and payroll offices the time needed to complete the many papers required.

YOUR FORWARDING ADDRESS.

Verify that your home or forwarding address is correctly recorded in the Department's records! The Department will send your final checks (pay check and lump sum payment for accumulated annual leave, if any) to the address or financial organization that you have previously specified in DOL records. You may correct your address in DOL records by accessing Employee Express by phone, LaborNet or by kiosk. Although Employee Express is the fastest and surest way of changing your mailing address or financial institution of record, you may forward a revised Address Report (change of address a form) to your servicing payroll office. You may also specify a different forwarding address for your final checks on your separation SF 52 (Request for Personnel Action). If you move after you leave the Department, notify your former servicing payroll office (a letter will do) by mid-December, so that the staff can send you your W-2 in time for next year's income tax preparation.

FINAL SALARY CHECK AND LUMP SUM PAYMENT.

Normally, you will receive your final salary check for hours worked during your last pay period in the Department on the regular pay day for that pay period. You can expect your lump sum payment for accumulated annual leave within four to six weeks after separation. However, these time frames are subject to the following provisions: (1) you give adequate notice of your separation; (2) you have no unresolved financial obligations to the Department; and (3) you and your supervisor forward the required separation documents to your servicing personnel and payroll offices at least two weeks before you separate.

ANNUAL LEAVE

If you retire from Federal service with unused annual leave to your credit, you will be paid a lump sum for that accumulated leave. Your lump-sum payment is for the calendar time for which you would have been paid had you used all of your annual leave, starting with the day after you separate from the Department. If you return to Federal service before this period expires, you will be required to refund the "unused" leave. This unused leave will be recredited to your account.

SICK LEAVE

1. If you retire under the Civil Service Retirement System (CSRS), your unused sick leave will be used to compute your retirement annuity. It will not be recredited to you if you return to Federal service.

2. The unused sick leave that you earned while covered under the Federal Employees Retirement System (FERS) will not be used in computing your FERS retirement annuity. However, if you transferred to FERS with frozen CSRS service, the sick leave used to compute the CSRS portion of your annuity will be your balance upon your transfer to FERS or upon your retirement from Federal service, whichever is less.

FEDERAL EMPLOYEES HEALTH BENEFITS (FEHB).

The following applies if you are enrolled in the FEHB program when you retire:

1. If you are eligible to continue your health benefits coverage after retirement, the Department will transfer your enrollment to the Office of Personnel Management. Your coverage will be continued automatically. To be eligible to continue your health benefits coverage after retirement, you must have been enrolled in the FEHB program for the five years of service immediately before you retire or, if less than five years, for all periods during which you were eligible for FEHB coverage. If you do not meet these criteria, see paragraph 2 immediately below For further information, please see the Focus on Benefits issue entitled "Post-Retirement Health Insurance."

2. You have two options with respect to continued health benefits coverage when you retire and are ineligible to continue your coverage into retirement: (1) Conversion to a nongroup health benefits contract; and (2) temporary continuation of FEHB coverage.

(a) The nongroup conversion contract is one regularly offered by the plan in which you are enrolled as a Federal employee. However, it may differ from the group plan in benefits, cost, or both. You will have a 31-day temporary extension of coverage, during which time you may convert to the nongroup health benefits contract without a medical examination. You will pay the entire cost of the nongroup plan directly to the plan.

(b) You may elect temporary continuation of coverage (TCC) under the FEHB group plan within 60 days after you leave Federal service or after your servicing personnel office notifies you about TCC, whichever is later. Under this option, you may continue coverage under your current plan and option or elect another plan and option for which you are eligible. If you elect TCC and make regular premium payments, your coverage will continue for up to 18 months. You will pay both the government and the employee shares of the premium, plus a two percent administrative fee.

FEDERAL EMPLOYEES GROUP LIFE INSURANCE (FEGLI).

If you retire and you are otherwise eligible, you may continue basic insurance and the various types of optional insurance after retirement, or you may convert to an individual life insurance policy For further information, please see the Focus on Benefits issue entitled "Post-Retirement Life Insurance".

RETIREMENT ANNUITY

1. Immediate retirement annuity. Your contributions to the retirement fund entitle you to an immediate retirement annuity upon separation from the Federal service if you have completed the required length-of-service and age requirements.

2. Refund not available. If you are eligible for an immediate annuity within 31 days of separation, you are not eligible for a refund of the retirement contributions that were deducted from your salary while covered by CSRS or FERS.

3. Additional information. For additional information, please see the Focus on Benefits issues entitled "Eligibility for Retirement for Employees Under the Civil Service Retirement System" and "Retirement Eligibility Under the Federal Employees Retirement System." See also the Office of Personnel Management's Retirement Facts publications, available upon request from your servicing personnel office.

THRIFT SAVINGS PLAN (TSP).

Ask your servicing personnel office for copies of the Federal Retirement Thrift Investment Board's brochure about TSP withdrawal procedures and its fact sheet about important tax information about payments from your TSP account. The withdrawal brochure provides information about your options, about the age restrictions that apply with certain options, and about your current and/or former spouse's rights related to your TSP account. The tax fact sheet outlines the mandatory 20 percent Federal income tax withholding on certain payments from your TSP account. If you withdraw the funds in your account, you can avoid withholding on all or any portion of your withdrawal by asking the Thrift Board to transfer that amount to an IRA or other eligible retirement plan. Or, if you are eligible, you can also select another withdrawal method to which different withholding rules apply. Please read the fact sheet carefully to see how the tax withholding requirement applies to you.

The following applies if you have a TSP account at the time you retire:

1. When you retire from Federal service, you have the following options: (a) purchase a TSP annuity; (b) transfer your money to another eligible retirement plan (such as an individual retirement account (IRA) or 401(k) plan) of your choice; (c) withdraw your money in a lump sum or in a series of equal payments (cash withdrawals are subject to Federal tax withholding); or (d) leave your money in the Thrift Savings Plan and take one of these actions at a later time (subject to certain time limitations). You may not continue TSP contributions after separation. However, if you leave your money in the Plan (option (d)), your account will continue to earn interest and you may continue to reallocate your money among the three investment funds.

2. If you have $3500 or less in your TSP account when you leave Federal service, the Thrift Board will notify you that it will send you a single payment, automatic cashout of your account, unless you elect another withdrawal option. The automatic cashout is subject to a 20 percent Federal tax withholding.

3. If you have a TSP loan upon leaving Federal service, you must prepay the loan in full, including interest. The TSP Service Office will send you a notice with instructions about prepayment. If the TSP Service Office does not receive your prepayment in full within 90 days of the date of its prepay notice, it will consider your loan as disbursed funds and report both principal and unpaid interest to the Internal Revenue Service as income received in the calendar year that the loan is declared disbursed. If the loan is declared as disbursed before your regular retirement age (e.g., you retire under an early-out authority, discontinued service retirement, or as a law enforcement officer before age 55), the IRS will consider it an early withdrawal subject to a ten percent penalty.

U.S. Department of Labor
200 Constitution Ave., NW
Washington, D.C. 20210

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