Thursday, October 17, 2013

USPS Responds To Criticism of Its Annuity Estimates

For the first time I can remember, the U.S. Postal Service issued a formal response today to a Dead Tree Edition article, USPS Comes Up With Yet Another Way to Discourage Early Retirement. The response was submitted as a comment on that article, but I think it deserves to be called out as a separate article. I won't comment on the response, except to say that I'm glad USPS is apparently taking seriously the need for accurate FERS annuity estimates.

According to OPM’s audit results, the U.S. Postal Service leads all agencies in retirement application accuracy with a score of 97% for its August 2013 submissions.

Through our partnership with OPM Retirement and the National Personnel Records Center, the Postal Service has worked diligently to provide accurate and timely information, which reduced the backlog at OPM from a 7- to 10-month delay to currently 30 days or less before retirees are placed in interim payment status.

The Postal Service recently sent offers to approximately 16,000 Voluntary Early Retirement (VER) eligible employees; twelve employees reported receiving blank annuity estimates due to a processing issue. These employees were immediately provided a revised annuity estimate.

The Postal Service provides its employees with annuity estimates that display the estimated annuity amount for employees with and without a survivor annuity. It also provides the following information listed below on its annuity estimate:
  • Retirement eligibility date 
  • Annuity computation date 
  • High-3 average salary 
  • Total actual service 
  • Accrued sick leave credit
  • 50% for FERS retirements effective through 12/31/2013 
  • 100% for FERS retirements effective on or after 01/01/2014 
  • 100% for all CSRS retirements 
  • Annual leave earned balance 
  • Terminal leave payment 
  • Cost of life insurance and FEHB coverage in retirement
The annuity estimate is based on up-to-date individual employee data and a comprehensive, validated service history for each employee, determined according to CSRS and FERS regulations. The service history identifies not only Postal Service service but also periods of military and prior civilian service and whether those periods of service are creditable for retirement eligibility and/or annuity computation.

OPM has validated Postal Service results as highly accurate as compared to actual OPM annuity determinations. The process is continually updated to reflect changes in retirement regulations; for example, estimates reflect the creditability of sick leave for the FERS annuity computation and the ability to make FERS redeposits.

The Postal Service does not provide annuity estimates for the FERS Special Retirement Supplement at this time -- the FERS Special Retirement Supplement is based on an OPM calculation of FERS service as a portion of 40 years of estimated Social Security earnings -- but we are currently working with our Supply Management office to find suppliers capable of leveraging their retirement software applications with our retirement applications to provide an estimated numeric value of the Special Retirement Supplement amount. We anticipate that this project will be completed this fiscal year. In the meantime, the Postal Service does provide a formula on the annuity estimate that shows the employee how to calculate the estimated amount of the Special Retirement Supplement using their own Social Security earnings.

We greatly value the service of all our employees, and we endeavor to do everything we can to contribute to a rewarding retirement.


Anonymous said...

As a postal employee, one thing is well know by us...any statement made by USPS is more fiction than fact...period!

Anonymous said...

what the post office does not tell you that if you have bought back your military service time, it will not count for the special
FERS supplement. when I started to look into retirement and how much I would make it included the time.
when I retired it was not there,
causing a huge financial loss.
Over 400 dollars.

james p. turner

Anonymous said...

Your FERS annuity supplement is based on your MRA, not your
service time. In other words. If your MRA is 56, and you retire at age 52 with the VER with 30 years of service, you'll wait four years to begin receiving the supplement.

Unknown said...

The bottom line is the FERS annuity estimate provided by USPS is for the basic annuity only. It does not show the FERS annuity supplement, which can double a person’s retirement income between minimum retirement age (MRA) and age 62. That’s a significant omission.

Adding to the confusion, the FERS annuity estimate that an employee begins to receive at minimum retirement age (MRA) does not distinguish a MRA+10 retirement from other optional retirements. The MRA+10 retirement does not get an annuity supplement and has a huge age penalty, whereas other optional retirements like voluntary early retirement do get an annuity supplement and have no age penalty.

The commenter who complained that his military service deposit was not credited for his FERS annuity supplement is correct. A military service deposit only increases his basic annuity. Look at the “Notice to All USPS Employees with Military Service” in the last Postal Bulletin and “Military Service Credit Toward Retirement” in Liteblue. They are misleading. “Post-1956 military service is only creditable under FERS if you make a deposit.” Neither one mentions that a military service deposit is not creditable for the FERS annuity supplement.

Anonymous said...

IF Congress would just REPEAL the Social Security Offset all Retirees that have earned Social Security Benefits could do much better financially and we would no longer be Discriminated against nor punished...After all people that retire form Private Jobs are not punished and their Social Security is not offset so why Civil Service and Federal Retirees and they make as much if not more in Retirement than we do...

Unknown said...

Social Security penalties apply to a postal employee hired before January 1, 1984, because he/she did not pay into the Social Security fund out of their postal paychecks. To avoid the “Windfall Elimination Provision” and “Government Pension Offset,” postal employees hired before January 1, 1984 had the opportunity to transfer to FERS in 1987 and 1998. A few did and were rewarded with no offset to their Social Security benefits and received employer-matched funds for their contributions to their Thrift Savings Plan (TSP).

Speaking of TSP, any postal employee that has reached age 55 the year they separate or retire can withdraw their TSP funds after separation or retirement without a 10 percent IRS early withdrawal penalty. That’s correct, age 55. This is a benefit few know about. Some people transfer (not rollover) their IRAs to TSP for this reason. By consolidating their accounts, they enjoy the TSP's very low administrative expenses and can still manage their investment mix by making interfund transfers.

Blogger said...

Thanks for writing this informative post. I never knew that opinions could be this varied.
Thanks for sharing.

Anonymous said...

I couldn't figure out the detail about my FERS supplement - very confusing. Found some good info at VERA information and a bunch of other good stuff.

goneagain said...

I cant figure out if I qualify for a postal annuity. I left USPS after 18 years of service. I am now 59 years old. Can I apply for a deferred annuity under FERS even though I left before MRA?

Unknown said...

Goneagain, you are eligible for a deferred annuity if you did not withdraw your retirement contributions. For more information, go to

Unknown said...

We will guide you through the process and provide you the exact links to enter the system via the USPS login. LiteBlue Login Online USPS

sunita Rana said... Online Login Portal is the build by Liteblue USPS Postal office to Connect with their thousands of Employees all over the United nation country