Pay and Benefits Watch: Common retirement pitfalls

If you've worked for the government for a long time, your personnel file has been around for a long time too, sitting in the human resources office.

Is everything in your file that needs to be there when you retire actually included? Is all your paperwork complete?

Before you brush off such worries and assume your file is just fine, remember that up to 20,000 federal employees are not even in the right retirement system because their agencies got confused when the Federal Employees Retirement System was created in the 1980s. Some of those employees face smaller retirement nest eggs than they anticipated because of their agencies' mistakes.

So it's not a bad idea to make sure your file's in order before you start planning your retirement party.

The Office of Personnel Management earlier this year issued a letter to federal human resources offices identifying some common problems that come up in the documentation of people retiring under FERS. Here's a run-down of the areas for concern:

• All original life insurance forms should be included in the file.
• All original health insurance forms should be included, too.
• FERS enrollees who worked part-time during part of their careers should make sure the hours they actually worked are reflected in their retirement papers.
• Employees should make sure that they had, and their files reflect that they had, five years of civilian service. Otherwise, they are not eligible for retirement.
• FERS enrollees formerly under CSRS should make sure their unused sick leave balances under CSRS, both at the time they transferred to FERS and at retirement, are included in their retirement forms.
• FERS enrollees who receive disability benefits must apply for Social Security disability benefits when they leave the government. OPM must have proof that enrollees have applied before their retirement applications can be processed.
• The current status of claims filed with the Office of Worker's Compensation Programs must be in the retirement files. FERS retirees cannot receive both workers' compensation and their annuities at the same time.
• Retiring employees seeking disability retirement benefits should have their human resources officers explain the impact of deposits and redeposits on annuities.
• FERS enrollees who receive disability retirement should check to make sure any leave donated to them was credited to the date they exhausted their own leave.
• FERS enrollees with military service formerly enrolled in CSRS must make sure any retirement deposits they make against their military service are billed at the proper rates: 3 percent plus interest under FERS rules and 7 percent plus interest under CSRS rules.
• When FERS enrollees retire, they will begin receiving their annuities on the first day of the next month. Personnel offices need to explain this, because CSRS enrollees are allowed to start getting their pensions on the second, third or fourth day of the month in which they retire.
• Applicants for survivor benefits need to make sure they have the most up-to-date forms. The SF 3104 was updated in January 1997 and the SF 3104B was revised in December 1995. Older forms delay processing of survivor benefits.
• Survivor benefit forms must indicate if the deceased worker was employed on the date of his or her death.