Benefit Bits--In an ongoing effort to provide benefits information to employees, periodic e-mails will be transmitted which will cover specific benefits topics. Date: Thu, 30 Jul 1998 06:41:20 -0400 To: "USGS Employees" From: "Cindy S. Wylie" Subject: Benefit Bits In Reply Refer To: Mail Stop 601 MEMORANDUM Supervisors, Managers, and Team Leaders: Please ensure that employees without access to e-mail receive a copy of this message. To: All USGS Employees From: Virginia G. Miles Acting Personnel Officer Subject: Benefit Bits In an ongoing effort to provide benefits information to employees, periodic e-mails will be transmitted which will cover specific benefits topics. This first e-mail will cover designation of beneficiaries and deposits for post-56 military service. Designation of Beneficiaries Payment of a benefit due upon the death of an employee will be made to the person or persons who survive that employee and who are entitled under the following order of precedence: First, to the designated beneficiary or beneficiaries; Second, if there is no designated beneficiary, to the widow or widower; Third, if neither of the above, to the child or children in equal shares, with the share of any deceased child distributed among the descendants of that child; Fourth, if none of the above, to the parents in equal shares or the entire amount to the surviving parent; Fifth, if none of the above, to the executor or administrator of the estate; or Sixth, if none of the above, to the next of kin as determined under the laws of the State in which the insured was domiciled. It is important that an employee keep his beneficiary forms up to date. If an employee remarries, for example, the beneficiary forms may have to be revised to reflect that change in order that the monies are paid out to the intended recipient upon an employee's death. Each Federal benefit has a beneficiary form that can be completed. This includes the Thrift Savings Plan (TSP-3); the Federal Employees Group Life Insurance (SF-2823); Unpaid Compensation, which includes salary checks and unused, earned annual leave (SF-1152); and the Civil Service Retirement System (SF-2808) or Federal Employee's Retirement System (SF-3102). All these forms are available from your servicing personnel office. The SF-2823 and SF-3102 can also be found on the In-Forms Program. A copy of the TSP-3 can be downloaded from the Thrift Savings Plan website at www.tsp.gov. If you are designating a child as a beneficiary, it is important that arrangements be made in advance for payment of those monies if the child is considered a minor at the time of the employee's death. This can be accomplished by establishing a trust. Examples of establishing a trust can be found in Benefits Administration Letter No. 98-202 on the Office of Personnel Management's web site at www.opm.gov/asd/index.htm or from your servicing personnel office. Post-56 Military Deposits An employee's military service in the Armed Forces of the United States is creditable under the Civil Service Retirement System (CSRS) or the Federal Employee's Retirement System (FERS) if a deposit is made into the applicable retirement system for that period of time. In order for military service to be creditable, it must be active service and terminated under honorable conditions. This covers service in the Army, Navy, Air Force, Marine Corps, and Coast Guard, including the service academies. In some instances, it is also creditable for the Regular or Reserve Corps of the Public Health Service and as a commissioned officer of the National Oceanic and Atmospheric Administration. Service in the National Guard, except when ordered to active duty in the service of the United States, is generally not creditable. Regulations for making a post-56 military deposit differ dependent on whether an employee is under the CSRS or FERS retirement system. If a CSRS employee was first employed by the Federal Government under retirement coverage before October 1, 1982, you have two options: (1) you can make the 7 percent deposit for any post-56 military service to avoid a reduction in your annuity at age 62 (and a reduction in any survivor annuity payable to your spouse after your death); or (2) you can decide not to pay the deposit and have your annuity reduced at age 62 if you are then eligible for Social Security benefits. If you are eligible for those benefits, your annuity will be recomputed to eliminate all credit for post-56 military service. However, if you will not be eligible for Social Security at age 62, you should not make the military deposit. Eligibility for Social Security is 40 credits or 10 years of substantial earnings. If a CSRS employee was employed by the Federal Government under retirement coverage on or after October 1, 1982, you will receive CSRS credit for any post-56 military service at the time of retirement only if you make a deposit for the military service. The above rules also affect CSRS Offset employees. Deposits for military service must be made to your employing agency before you separate for retirement. They cannot be made to the U.S. Office of Personnel Management. If you wish to pay a post-56 military deposit, you must obtain a certified estimate of your military earnings from the appropriate branch of the services. Your servicing personnel office will provide you with the form to request those earnings. Agencies cannot accept tax forms, Social Security statements of earnings, or documentation of military ranks held and dates of promotion as evidence of military pay received. The amount of deposit due is 7% of your basic military earnings plus interest. The interest rate charged on deposits for military service will be at the yearly rate of retirement fund earnings, as determined by the Secretary of the Treasury. The interest rate for 1998 is 6.875 percent. A FERS employee, regardless of date of hire, will receive credit for post-56 military service only if a deposit is made for that service. The amount of deposit due is equal to 3 percent of the military basic pay earned, plus interest. A deposit is necessary to use post-56 military service both for eligibility for an annuity and for computation purposes. All other information regarding post-56 military deposits is identical to CSRS rules as noted above. Questions regarding these benefits should be directed to your servicing personnel office.