The end of the year is when a lot of feds decide to retire. Here’s a quick checklist about the process for submitting a retirement application.
What can federal employees expect from the retirement application process for both FERS and CSRS? For one, the less complicated your case, the less time it will take. The three main parties involved are you (the potential retiree), your agency (specifically your retirement specialist and payroll department), and the Office of Personnel Management (OPM).
Step One: Apply
This part is your biggest responsibility. You have to submit a paper application, but it is best to fill it out electronically and print it rather than using handwriting for anything other than your signature. If you are CSRS or CSRS-offset, you’ll use the SF-2801 form (and SF-50 if CSRS-offset). SF-3107 is the form for those retiring under FERS.
*Ensure you include all necessary attachments and make a copy for your records!
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Step Two: Certification
Included in your application is a checklist that offers a list of what documents you can expect your human resources department to be responsible for forwarding to OPM. Your agency is required to submit this package within thirty days of your separation date. The agency will compile a certified summary that you must verify and sign.
After that, your payroll department will verify deductions before the package gets sent off to OPM. Then payroll will provide your last paycheck from employment and the lump-sum cash payment from any unused annual leave.
Step Three: Iron Mountain
Last, the paper retirement claim application is shipped off to Iron Mountain in Boyers, PA where it gets placed in the backlogged inventory of pending claims. At this point, you should be given a retirement claim, or CSA, number for tracking purposes. Once at OPM, it goes through the following process:
- The application is reviewed to make sure it is complete.
- Prior retirement records, and documentation from previous payroll providers, are attached to the packet.
- At this point, one of three outcomes can occur:
- 1. The case is very clear-cut, and OPM approves the application right away. Interim status is bypassed, and you’ll be sent information about how to access your OPM account online.
- 2. OPM determines the applicant will be eligible for retirement payments and issue interim payments, which constitute an estimated portion of your full annuity income. These interim payments do not include any Special Retirement Supplement benefits, if there are any. Also, only federal taxes are withheld from these interim deposits – there is no state tax withholding (if your state taxes federal pension income.)
- 3. Additional information might be requested. This can be the biggest cause of delays. Average processing time goes from 40 days to over 120 if more information is needed. This is why the first two steps can be crucial in preparing for retirement.
Until Next Time,
**Written by Benjamin Derge, Financial Planner, ChFEBC℠ The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Benjamin Derge and not necessarily those of RJFS or Raymond James. Links are being provided for information purposes only. Expressions of opinion are as of this date and are subject to change without notice. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors.