FERS lump sum payment

[Afishegg]

I have a question and can't seem to get a straight answer on. Maybe you guys can help me.

If an employee who is covered by FERS leaves the federal gov (quits) and he ops to withdraw his FERS afterward in a lump sum payment (before age 55 or 20 yrs service). Does he get "everything" back?

What I wanna know is, does he get the amount he or she contributed AND the amount the GOVERNMENT contributed? It might be put down like this.

Say I work for 8 years for the fed and am under fers. I make 40k per yr and I contribute about 1k per year to my FERS....BUT...The government contributes 4k per year. When I "quit", I opt to get a lump sum payment. Do I get 8k back or do I get 45k back?

8 years x $1,000 (my contribution) = $8,000
0r do I get
8 years x $5,000 ($1,000 my contribution per year + $4,000 government contribution per year) = $45,000

OR....Is the government contribution only given to me if I wait till I'm 65 retirement age?

Thanx!

 

[Tsunami]

You can find the answers to your questions on the tsp.gov website in the publications.

https://www.tsp.gov/forms/formsPubs.shtml (e.g., the August 2010 summary booklet)

All of the governments contributions are yours once you meet the vesting rules, which is 3 years for most FERS employees. If you're not rolling over the account to an IRA or another employer's retirement plan, TSP will take out "appropriate" federal taxes from your lump sum withdrawal check.

My question is though, how are you getting so much more matching contributions from the government than what you are putting in? I think that's impossible. The first 3% you put in is matched dollar for dollar, then next 2% is matched 50 cents for each dollar, so that when you put in 5% you get the maxium 5% match. In your example, $1000 contributions is 2.5% of the $40,000 salary, so the government would contribute the automatic 1% plus 2.5% more, or 3.5% of the salary. Also, since this hypothetical person has 8 years in, he/she is vested and would get the entire account balance, minus taxes.

 

[Afishegg]

You can find the answers to your questions on the tsp.gov website in the publications.
https://www.tsp.gov/forms/formsPubs.shtml
All of the governments contributions are yours once you meet the vesting rules, which is 3 years for most FERS employees. If you're not rolling over the account to an IRA or another employer's retirement plan, TSP will take out "appropriate" federal taxes from your lump sum withdrawal check.

My question is though, how are you getting so much more matching contributions from the government than what you are putting in? I think that's impossible. The first 3% you put in is matched dollar for dollar, then next 2% is matched 50 cents for each dollar, so that when you put in 5% you get the maxium 5% match. In your example, $1000 contributions is 2.5% of the $40,000 salary, so the government would contribute the automatic 1% plus 2.5% more, or 3.5% of the salary. Also, since this hypothetical person has 8 years in, he/she is vested and would get the entire account balance, minus taxes.

I think your thinking about the "TSP". I am talking about the FERS (Federal Employee Retirement System) account, which is different. The FERS is an "extra" retirement benefit, like what a private companies "pension" is. You can ask to get it once you quite the govnmt but My question remains the same....

You get a statement every year or you can go to the EPP page and look up your FERS benefits page, it's actually under "benefits" on there. But thanx anyways...

 

[Guest2]

Darn, I wish I saw the previous post before hand.

FERS Pension don't give out Lump Sums.

The TSP does, now I'm really confused.

 

[Guest2]

The 1.3% (Law Enforcement) amount that I paid to FERS has already
been taxed and when it comes time to retire, they will pay it back to you
by using a formula. If you go to the OPM.gov website and search alittle,
you'll find a section about the "Non Taxable Amount" concerning your
Pension (FERS)

Yes, these contributions you get back.

TSP Contributions are yours once your vested. (See TSP website)

 

[Tsunami]

I think your thinking about the "TSP". I am talking about the FERS (Federal Employee Retirement System) account, which is different. The FERS is an "extra" retirement benefit, like what a private companies "pension" is. You can ask to get it once you quite the govnmt but My question remains the same....

You get a statement every year or you can go to the EPP page and look up your FERS benefits page, it's actually under "benefits" on there. But thanx anyways...

Oh, the 0.8% that goes toward your FERS retirement annuity....Yeah I think you can get that 0.8% back but I don't know about getting anything more than that for whatever amount the government throws into the pot, never heard of that. I had 8 years under CSRS that I got a refund for, and later did a redeposit to get credit back for those years....I'll have to plead ignorance on the FERS rules....here's the first thing that popped up in a Google search:
http://www.myfederalretirement.com/public/453.cfm

 

[elleni]

check http://www.opm.gov/retire/pre/fers/index.asp to get more info.

As far as I know you receive no benefit if you quit unless early out is offered and requirements are met.

 

[Guest2]

check http://www.opm.gov/retire/pre/fers/index.asp to get more info.

As far as I know you receive no benefit if you quit unless early out is offered and requirements are met.

Absolutely right Elleni ! The Government will hold onto everything until you meet the Age and Service (Years) Requirements.

Eight Years won't bring anyone a Big Pension, but they'll hold onto the money until all are met.

 

[Frixxxx]

Does this help:

http://www.opm.gov/forms/pdfimage/RI90-1.pdf

I think it basically answers your question, but it's the elligibilty that is questionable.