OPM: Retirees Fed Tax Withholding Increases, Annuity Check Decreases In 2011
The Office Of Personnel Management issued the following anouncements:
Annuitant Federal Tax Withholding Increase
On December 16, 2010, Congress elected not to extend the “Making Work Pay” credit. The “Making Work Pay” credit, part of the 2009 Stimulus Package, expired on December 31, 2010. This could mean higher federal tax withholding amounts in monthly annuities for federal retirees. The Internal Revenue Service (IRS) issued a notice in December 2010, stating withholding tables for 2011 would no longer be adjusted for the Making Work Pay tax credit and there is no longer an optional additional withholding adjustment for annuities. The adjustment is reflected in the Notice of Annuity Adjustment received by annuitants in January 2011.
With the expiration of the temporary credit, IRS tax withholding tables have changed for 2011 and many retirees may see an increase in the amount of federal tax being withheld from their monthly annuity payments as a result. OPM uses tax withholding tables that are provided by the IRS and questions about changes to those tables must be referred to the IRS, not OPM. The tax rates did not change; only the withholding tax table changed. For more information concerning the 2011 federal tax withholding tables go to www.irs.gov. See IRS Notice 1036, TABLE 4-MONTHLY Payroll Period.
You may change your federal tax withholding by accessing www.opm.gov/retire or calling OPM at 1-888-767-6738 from 7:30am to 8:00pm EST. There is a federal tax calculator on our website that may assist you in determining the amount of federal tax to withhold. Changing the amount of your withholding will not reduce your tax liability at the end of the tax year. You may also want to consider contacting your tax advisor.
Important information about your February 1 annuity payment
The Internal Revenue Service (IRS) did not release the 2011 income tax withholding tables until mid-December 2010. OPM did not receive the tax withholding tables in time to apply them to your January 3, 2011 annuity payment.
The 2011 income tax withholding amounts have now been applied and will affect your February 1, 2011, payment and all subsequent payments in 2011. You will receive a Notice of Annuity Adjustment in late January 2011 describing the February 1, 2011, payment, including information about any new income tax amount withheld from your annuity.
Please note that the tax rates did NOT change; only the withholding table changed.
The amount withheld from your annuity could change because:
- Your annuity amount changed.
- The withholding tables changed.
- You asked OPM to make a change.
For information regarding Federal income tax, please visit the IRS website at www.irs.gov.
OPM Announces Open Season For Long-Term Care Insurance
The Office of Personnel Management (OPM) is announcing an Open Season for the Federal Long Term Care Insurance Program (FLTCIP). All eligible individuals who are not currently enrolled in FLTCIP may apply for coverage, including employees, annuitants, and other members of the Federal family. Active workforce members, their spouses, and same-sex domestic partners of civilian active workforce members will be subject to abbreviated underwriting. The addition of same-sex domestic partners of civilian active workforce members as a new type of qualified relative eligible to apply for FLTCIP coverage is pursuant to the
President’s Memorandum of June 17, 2009 on Federal Benefits and Non-Discrimination which requested that OPM, in consultation with the Department of Justice, extend certain benefits that can be provided to same-sex domestic partners of Federal employees consistent with Federal law. All other qualified relatives will be subject to the Program’s standard requirements for full underwriting of applications.
The Open Season will run from April 4 through May 27, 2011.
OPM Statement At Senate Subcommittee Hearing On USPS Retirement Overpayments
OPM Reiterates its position at Senate Subcommittee hearing that it does not have Authority to Reallocate USPS CSRS Overpayments
OPM: Finding Solutions to the Challenges Facing the U.S. Postal Service
STATEMENT OF JONATHAN FOLEY
DIRECTOR OF PLANNING AND POLICY ANALYSIS
U.S. OFFICE OF PERSONNEL MANAGEMENT
December 2, 2010
We believe the assertion that OPM has the discretion to make basic changes in the allocation method between the Postal Service and the Treasury goes beyond the intent of and the authority provided to OPM in PAEA. The reconsideration process provided for in section 802(c) of the PAEA allows for appeal and review of OPM’s specific calculations of the annual supplemental liability determination, according to the established Fund allocation methodology. For example, section 802(c) allows for reconsideration of the population or accounting data underlying the annual liability determination, but not of the allocation methodology. Thus, we believe that the question of whether there should be a change in the apportionment responsibility is one that is appropriate for consideration by the Congress.
Our comments on S. 3831 are limited to section 2, which would transfer responsibility to the Treasury for the effects of Postal pay increases on the value of pre-1971 Postal employment in computing annuities under CSRS, a change estimated to be $50-55 billion. In addition, it would permit the resulting Postal CSRS surplus to be used at the discretion of the Postal Board of Governors to satisfy the $5.5 to 5.8 billion annual payments to the Postal Service Retiree Health Benefits Fund (PSRHBP) required under 5 U.S.C. 8909a(d)(3)(A) for fiscal years 2010-2016.
OPM’s principal roles in this matter are those of a program administrator and trust fund fiduciary. As such, our principal concerns must be for the efficient operation and reliable funding of the retirement and insurance programs. As a trust fund fiduciary, our principal relevant concern is with the adequate funding of the program and not with the source of that funding. Since S. 3831 will not change funding levels for CSRS, but only the source of those funds, OPM takes no position at this time as to the substance of section 2.
However, we do have concerns regarding certain technical aspects of that section. The amendment to 5 U.S.C. 8348(h)(2)(B) would require that the annual computation of the Postal surplus or liability be completed by March 31 following the end of each fiscal year. Because not all necessary data is available by that date, we suggest that it be changed to June 30, which will still give the Postal Board of Governors three months for consideration prior to the funds transfer date. There are also internal inconsistencies between the dates specified for calculations and the dates for payments to the PSRHBP. Finally, there are technical problems with the wording of the new 5 U.S.C. 8348(h)(2)(C)(4) in that the required methodology is not supported by available data. We would be pleased to provide the Subcommittee with more detailed explanations and suggested technical revisions that would retain the substantive intent of these provisions.
OPM to Increase New Retirees Temporary Annuity Payments
Office of Personnel Management Director John Berry pledged Wednesday to increase new retirees’ interim annuity payments — even if it means some will temporarily be overpaid.
Currently, more than 38,000 recent retirees are receiving interim annuities — which are sometimes as low as half of what they are owed — for months while overwhelmed OPM employees calculate the correct amount.
Even when OPM has all necessary information on hand the day someone retires, that retiree usually gets about 90 percent of what he is owed. If the retiree’s employing agency sends incomplete information to OPM, or if there are other conditions that complicate the annuity calculation — such as if the retiree also receives a military pension, has excessive leave without pay or missing service, or worked part time for a portion of his career — that could lower the amount of the interim annuity while OPM straightens the file out.
Berry and Zielinski want OPM to not be as stingy when it calculates interim annuities, even if it means OPM overpays a few retirees. Berry said anyone who is overpaid will have to repay the balance to OPM.
The maximized interim payments will be a stopgap solution to lessen the burden on retirees while OPM figures out a more permanent way to eliminate the backlog. OPM plans to hire 40 new employees next year to help calculate annuities.
full story: Federal Times
Federal Employees 2011 Open Season for Health Benefits, Dental, Vision Insurance and FSA
From the Office Of Personnel Management
• The U.S. Office of Personnel Management (OPM) has announced that this year’s open season for health benefits, dental and vision insurance, and Flexible Spending Accounts will run from November 8 through December 13, 2010. This open season will give federal employees and retirees the opportunity to change their health-care coverage and employees who are not enrolled, but are eligible to participate, the opportunity to elect coverage.
• Each year, OPM enters into annual negotiations with each FEHB carrier, historically enabling the program to hold premium increases below industry averages and secure good benefits value for enrollees and their families.
• Premiums for the 2011 FEHB Program will rise by an average 7.2 percent for the enrollee share of premiums. This increase is below last year’s premium increase of 8.8 percent and lower than rate hikes predicted for large, employer-sponsored health programs by benefit consultants such as Aon, Milliman, and Price Waterhouse Coopers, which are estimating 2011 premium increases between 8.9 percent and 10.5 percent.
• In January 2011, there will be 207 health plan options in the FEHB Program.
• The Affordable Care Act extends important new benefits to FEHB enrollees and strengthens the program. Preventive care and screenings will be available with no out-of-pocket costs and enrollees will have the right to add their young adult children under the age of 26 to their family health plan. According to an OPM analysis, and consistent with independent reports, these new consumer protections account for a 1.7 percent increase in premiums.
• Additionally, all FEHB plans are fully compliant with the insurance reforms required by the Affordable Care Act and, in the case of preventive care, FEHB plans have extended benefits ahead of when they were required to do so by the Act.
• Enrollees with self-only coverage will pay, on average, $5.53 more each pay period and enrollees with family coverage will pay $11.45 more per pay period. FEHB enrollees pay, on average, 30 percent of the total cost of the plan’s premium while the government pays 70 percent.
• Enrollees in the Blue Cross Blue Shield Standard Option, the most popular FEHB plan choice, will see their share of the premium increase by 6.9 percent for self-only coverage and 7.6 percent for self and family coverage.
• All FEHB plans will offer tobacco cessation benefits in compliance with the U.S. Public Health Services’ 2008 clinical guidance on tobacco cessation. This includes full coverage (no enrollee co-payments) for seven FDA-approved medications, four counseling sessions per quit attempt, and two quit attempts per year.
• Five FEHB plans have increased benefits for hearing devices and/or other assistive devices and twelve FEHB plans currently provide coverage for hearing aids and/or assistive technology devices.
• Sixteen FEHB plans will offer testing for up to four transplant donors for bone marrow and stem cell transplants.
• Two health plans, GEHA and Mail Handlers, will pilot coordination of benefits with Medicare, whereby the FEHB plan will contribute toward the cost of the enrollee’s Medicare Part B premium in return for the enrollee accepting the same cost sharing (e.g. copayment/coinsurance) as non-Medicare enrollees. Medicare enrollees may voluntarily participate in these pilot programs. Currently, these plans waive some cost sharing for enrollees with Medicare coverage.
Non-Dependent Children Can Join FEHBP Next Year
Non-dependent children can join FEHBP as of January 1st, 2011. The child doesn’t have to be your own. It can be your gay partner’s or someone else’s. If it is your own child, the child can be married and have their own employer-sponsored insurance. Almost any child living with a federal employee can be added. See the attachments from OPM. Some employees and retirees may overlook this important benefit change this Open Season.
OPM’s definition of “Foster Child” and “Step Child” is at
http://www.opm.gov/insure/health/reference/handbook/fehb28.asp#FosterChildren.
Changes for Federal Benefits Programs under the Affordable Care Act
http://www.opm.gov/retire/pubs/bals/2010/10-201.pdf
Attachment: Health Reform Changes for Federal Benefits Programs Effective January 1, 2011
http://www.opm.gov/retire/pubs/bals/2010/10-201attachment.pdf
OPM Does Not Have Authority to Reallocate USPS CSRS Overpayments
Filed under: CSRS, opm, postal, postal news, PRC, retirement, usps
OPM’s Response to the Postal Regulatory Commission Regarding USPS CSRS Overpayments:
Legislative History
OPM determines the Postal Service’s responsibility for CSRS costs in accordance with current law. OPM’s methodology is based on the determinations made by prior Congresses that the Postal Service is responsible for CSRS costs attributable to pay increases granted by the Postal Service. Congress first established this policy in 1974, under Public Law 93-349, and no subsequent legislation has established an alternative policy. To recap, in 2003, Congress directed OPM to make changes to the accounting of Postal Service CSRS obligations that led to a $78 billion decrease in future Postal CSRS funding payments. Then in 2006, Congress directed OPM to change how military service costs should be allocated under CSRS that led to a $28 billon adjustment. In both cases, the magnitude of the adjustment was understood by Congress when the laws were passed. It appears to OPM that when Congress intends to make adjustments of the magnitude suggested by the Segal report, it does so by taking specific legislative action.
Redetermination Provisions
We believe that the implication that OPM has the discretion to make basic changes in the allocation method between the Postal Service and the Treasury goes beyond the intent of, and the authority provided to OPM in, the 2006 Postal Accountability and Enhancement Act. That law included a provision, section 802(c), allowing the Postal Service to appeal to OPM its annual detemlination of the Postal Service CSRS supplemental liability under 5 U.S.c. 8348(h)(I).
Section 802(c) provides in pertinent part:
(A) Request for review.–Notwithstanding any other provision of this section (including any amendment made by this section), any determination or redetermination made by the Office of Personnel Management under this section (including any amendment made by this section) shall, upon request of the United States Postal Service, be subject to a review by the Postal Regulatory Commission under this subsection.
Footnote 1 of the PRC transmittal indicates that their action is based upon:
Request of the United States Postal Service for the Commission to Conduct a Review Pursuant to PAEA Section 802(c) ofOPM Determinations Regarding CSRS, February 23,2010; Clarification of Request of the United States Postal Service for the Commission to Conduct a Review Pursuant to PAEA Section S02(c) of OPM Determinations Regarding CSRS, March 2, 2010.
Conclusion
After careful review by counsel, we have concluded that OPM does not have the authority to make a reallocation in the manner suggested in the Segal report. However, if Congress determines that another methodology is more appropriate, OPM will of course comply with any changes in the current law.
Once again, thank yOu for the opportunity to provide our views. Copies of this letter will be furnished to the relevant committees of the Senate and House of Representatives, and to the United States Postal Service.
Postal Employee Who Retired Under Early Retirement Is Challenging OPM Over FERS Annuity Supplement
Filed under: FERS, legal cases, opm, postal, postal news, retirement, usps, vera
My name is Lennis B. Reynolds I am a retired Postal employee who took a VER/Incentive offer in August 2009. I am taking OPM to MSPB about the FERS Annuity Supplement. The difference without the Supplement is $1000.00 per month in retirement income.
To : Honorable Howard J. Ansorge
Administrative Judge
Central Regional Office
230 South Dearborn Street, Room 3100
Chicago, IL 60604-1669
Dear Judge Ansorge:
I, Lennis B. Reynolds CH-0841-10-0788-I-1,CSA 8 436-635 desires an in-person hearing, I will conduct the hearing in this appeal by telephone .The telephone hearing will be held: Date: September 13, 2010 Time: 2:00 p.m. Central time (3:00 p.m. Eastern) I am requesting a in person hearing.
PREHEARING SUBMISSIONS
The issue is a employee who retires under their MRA under FERS is eligible for the FERS Annunity Supplement when retiring on VERA. OPM position is that you have to be MRA to collect the FERS Annuity Supplement, but according to the THE FEDERAL EMPLOYEES’ RETIREMENT SYSTEM ACT OF 1986 legislation clearly states it allows only four types of retirement benefits :Unreduced, reduced, ‘involuntary, and deferred vested annuities.
Under the THE FEDERAL EMPLOYEES’ RETIREMENT SYSTEM ACT OF 1986 a employee who retired inVoluntary would have to wait to MRA not Voluntary(See exhibit 1). When Voluntary Early Retirement Laws Enacted in the 107/108th Congress under Voluntary Early Retirement Authority. Under both CSRS and FERS, a federal employee is eligible for an IMMEDIATE UNREDUCED RETIREMENT annuity at age 55 with 30 or more years of service. Under voluntary early retirement authority (VERA), the age and service requirements are reduced to 20 years of federal service at age 50 or 25 years of service,regardless of age. (see exhibit 2).
The Homeland Security Act (P.L. 107-296) provides that with the approval of OPM, an agency undergoing restructuring or downsizing can offer voluntary early retirement to employees in specific occupational groups, organizational units, or geographic locations. Reductions in annuity amounts for early retirement will continue to apply . In your offer (the “agency”) must submitted a request to OPM for a grant of authority to offer voluntary early retirement in conjunction with a proposed major reduction in force (“RIF”). OPM/ agency must have this in your offer letter see (JOSEPH T. TORRES,Petitioner,v.OFFICE OF PERSONNEL MANAGEMENT.(see exhibit 3)THIS WAS NOT IN MY offer letter ONLY a VER offer was issued NOT a proposed major reduction in force (“RIF”)this was not INCLUDED IN MY OFFER LETTER.
I was offer to retire voluntary. .(see exhibit 4.) I also took a look at my form 50 and I looked up how agency/OPM retired me I was retired Involuntery (see form 50 Nature of Personnel action(Nature of action code is (303) Description (Retirement-Special-option .(see exhibit 5.) Chapter 30. Retirements (Natures of Action 300, 301,302, 303, and 304).then go to Table 30-B. Remarks Required for Retirement Actions rule(see exhibit 5 A1) .
According to voluntary Early Retirement Laws Enacted in the 107th/108 Congress under Voluntary Early Retirement Authority I retired(voluntary with unreduced benefits the same way that a regular employee /special groups retirement it is Voluntery. Note: only the age and service requirements are reduced not the benefits. OPM retired me under Early retirement provision under CSRS not Voluntary Early Retirement under FERS it is a big diffence see chapter 43 fers(see exhibit 6). OPM retired me as an Early-Optional retiree when I should have been retired on Voluntary Optional.(see exhibit 7) I was not in a MAj-RIF must be in my offer voluntary early retirement in conjunction with a proposed major reduction in force (“RIF”). this was noted in my offer letter.
If you have any question please feel free to call XXX-XXX-XXXX this is a major case on all FERS employees who retired under VER and who is under their MRA. Note: I had a prehearing telephone conference call with the Honorable Howard J. Ansorge and OPM Agency Representive James Wiliams. In the conference call OPM claims that they retired me under 8414b (1) B. OPM cannot retire any FERS employee who retired voluntary under 8414 b (1) B unless the agency is undergoing a RIF and they must be documented in the offer letter as a reasonable offer. Therefore under U.S Code 8421 Annuity Supplement paragraph a(2) only applies to people who retired involuntary not voluntary. The only way a FERS employee can retire,. who retired voluntary is under U.S. Code 8412 IMMEDIATE RETIREMENT. The decision will be on September 13, 2010
Sincerely
Lennis Reynolds
former non-commissioned officer/retired Postal employee:
**This article may not be reprinted or republished without the approval of PostalReporter.com or Lennis Reynolds.
OPM Study Finds Federal Workers Earn 22 Per Cent Less Than Private Sector
A new OPM study finds that federal employees earn 22 percent less than their private sector counterparts doing similar jobs. Now, the study examined straight salary and didn’t factor in benefits. OPM says there is no information to compare federal and non-federal benefits. The findings are based on data from the Bureau of Labor Statistics. OPM Director John Berry ordered the study in June, following media reports that feds earn much more money than people in the private sector.
Friedman said several articles, the most recent in the USA Today, are misleading because they are not doing fair comparisons. He said BLS clearly states that is survey is not appropriate for comparing federal and non-federal workers because the occupation statistics survey doesn’t measure level of work.
Full story: Federal News Radio- OPM trying to correct fed salary facts
PRC Affirms USPS Overpaid $50 Billion to Retirement Fund
OPM Must Reconsider Calculations
The Postal Regulatory Commission (PRC) released an independent actuarial report [PDF] on June 30 which confirms that the Postal Service was overcharged $50-$55 billion for payments to the Civil Service Retirement System (CSRS) between 1972 and 2009. The report recommended an “adjustment” of $50-$55 billion in favor of the Postal Service.
The PRC has submitted the report to Congress and the Office of Personnel Management (OPM), which administers the fund. By law, OPM must reconsider its calculation of the Postal Service’s pension assets in light of the report; make any appropriate adjustments, and submit the results of its reconsideration to the Commission, the Postal Service, and Congress.
“There seems to be agreement that an updated recognition and disposition of any surplus, if it is to take place promptly, will require Congressional action,” the report noted.
The Postal Service is facing severe budget deficits due to a requirement of the 2006 Postal Accountability and Enhancement Act (PAEA) that the USPS must “pre-fund” future retiree healthcare benefits at a cost of more than $5 billion a year for 10 years. To help restore the Postal Service to financial health, postal unions and other “stakeholders” have been urging Congress to relieve the USPS of the pre-funding obligation – a burden that no other government agency or private business bears.
“The APWU has opposed the elimination of Saturday mail delivery and other cutbacks,” said APWU President William Burrus. “This finding denies the Postal Service any excuse for refusing to provide the American people the service they have received for more than 200 years.”
The PRC study, Civil Service Retirement System Cost and Benefit Allocation Principles, [PDF] was commissioned by the PRC in response to a request by the USPS. It followed a Jan. 20, 2010, report by the USPS Inspector General [PDF] which concluded that the Postal Service had overpaid CSRS obligations by $75 billion.