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  1. #1
    Join Date
    Mar 2004
    Posts
    78

    How does the Federal Retirement System Work?

    I was wondering how the Federal Retirement system works? Do you get 50% after 20 years or do you have to do 25 years? What are the ages for retirement to collect? And all the cops who went from local to federal were you able to roll your retirement into the Federal System?

  2. #2
    Join Date
    Jan 2001
    Posts
    1,588
    The percentages depend on whether or not you're covered as a LEO/firefighter or under the "basic" fed. retirement system. Non-LEO's earn 1% per year towards a pension (30 years minimum for a full pension, I believe) and you can buy back active duty military time, which also gives you 1% towards retirement (you can do this in either retirement system). All calculations are based on an average of your high three years (usually your last three).

    LEO's earn 1.7% per year for the first 20 (the minimum for full pension in most cases, although if you hire on early enough in life and do 25 years, you can go after that). After 20 you earn an additional 1% per year. You can't get credit for anything other than fed. time. Civilian fed. time is calculated automatically while the military buy back time only counts after you purchase it. One other issue for LEO's is a mandatory retirement age of 57. You have to be able to complete 20 years in the LEO retirement system, which is why you have to be hired by age 37, unless you have creditable time in another fed. LEO position (it's 20 years total in the LEO retirement system, regardless of how many agencies/positions you move through). Clear as mud, I'm sure.

    Lastly, the fed. retirement system in based on a three tier system. Pension, the Thrift Savings Plan (fed. employee version of a 401K) and laughably, Social Security.

    A good example of how all of this meshes is my personal situation. I'm 34 and have been a fed. employee since 1989 (7 years active duty military to start). After leaving the military I worked as a fed. civilian for 5.5 years in the non-LEO retirment system. I also bought back my military time during the first few years (it costs 3% of your earned based pay, calculated by the DoD). In 2002 I was hired as a criminal investigator (LEO retirement system). I have to do at least 20 years in the LEO retirement system and the 12.5 years I brought to the party count towards retirement (1% per year). I'll be eligible to retire when I'm 51 (almost 52), which will give me nearly a 47% pension. If I go until they kick me out at age 57, I'll earn nearly 53%. In todays money, at the top of the journeyman pay scale, that's roughly $64,000/year. I think I covered it all, but if not, there will no doubt be others chiming in.
    Last edited by k9cop21811; 08-11-2004 at 07:18.

  3. #3
    Eaglearm Guest
    Great post!!!!!

    However, is that percentage based upon your base GS pay or gross pay with FLEP included? It would make a big difference.

  4. #4
    Join Date
    May 2003
    Location
    Time and Space
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    310
    Quote Originally Posted by Eaglearm
    Great post!!!!!

    However, is that percentage based upon your base GS pay or gross pay with FLEP included? It would make a big difference.
    FLEP??? Is that some form pay I am supposed to be getting!

    I assume you mean LEAP. The answer is yes, LEAP and locality pay are included in the total amount used for the retirement calculation. AUO also counts for the Feds that get that instead of LEAP. Overtime does not count.

  5. #5
    Eaglearm Guest
    I'm sorry. I meant LEAP. I'm brain farting. Yet thanks for the info on the total gross for calculations.

  6. #6
    Join Date
    Jan 2001
    Posts
    1,588
    Overtime used to count for Customs, but I don't know how it works now under CBP. LEAP is definitely counted as part of your pay for retirement. The way things work with fed. pay increases is pretty good too. Take a 4% increase for cost of living (the number fluctuates, but the pres. usually gives us something). That bumps up your locality pay, which LEAP is based on. So your base goes up, which causes your locality to go up, which causes your LEAP to go up as well. Then tack on a GS level increase (many 1811 jobs are journeyman GS13) or step level increase in the GS13 bracket and it makes you really feel for the local copper going on his second work year without a contract, which when they eventually get one will include some crappy 3% increase over 5 years or something. Meanwhile, we get between 2-4% per year without hardly asking for it. It's hard to complain too much about pay in the fed. system (unless you're living in San Fran., NY or the like). Most local PD guys make out a bit more in the end, however, at least on the percentages. Most cops in our area get at least a 65% pension. Not bad.

  7. #7
    Eaglearm Guest
    That is my deal. By the time I reach 55 (I can retire), if I were to stay with my PD, I would get 75% retirement of base pay. Right now, I'm at $51,000.00

    However, who knows what kind of Mayor and City Counsel we will have then. They will probably like the Firefighters more than us Cops.

  8. #8
    Join Date
    Jan 2001
    Posts
    1,588
    You're looking at about $38,000 right now Eagle. Better get a promotion or two. That's what I mean by locals making out on the percentages. The only problem is, a high percentage of a low figure, is a low figure. Now, if you can move your way up to the $80,000 range, you're at $60,000. No more mac n' cheese for you.

    One other thing to take a hard look at when considering local PD retirement packages is whether or not your pension is subject to cost of living increases. My neighbor, a local copper, is with a dept. that does not give cost of living increases in pensions. He knows an officer that retired 20 years ago from his dept. that is still collecting the same pension he did, well, 20 years ago. Can't imagine. You can't live like that. The guy now has to work. It's easy to not think about that stuff when you're 22 years old, but you have to.

  9. #9
    Join Date
    Aug 2000
    Location
    New York City
    Posts
    5,320
    Brother, retirement is one of the few factors which keeps many folks with my Dept. I have mentioned it before. If you can hit $100,000 during any three year period and retire with 20 yrs on, your pension will be $50,000 per year. We also get a variable supplement of $12,000 per year. Add on whatever you make in your deferred compensation plan, social security, etc... I was shocked to learn a few years ago that when my Postal Inspector buddy who was making more than $100,000 per year retired, his pension was so much less than ours and he had to go right back to work right away. -- Note: He is doing quite well now with his own PI company.

  10. #10
    Eaglearm Guest
    K9COP. I'll let you do the math. Seeings how your were I want to be.

    I'm 36. Will be 37 in Aug of 2005. (Thus, I need to get hired.)

    I have 10 yrs of Active Air Force to sell back.

    I will need to do 20 years as an 1811 and punch out at 57.

    What's my magic number????

    I better start an IRA or Thrift savings hu????????


    OR Stay where I am at. Do FEDS get cost of living increases?

  11. #11
    Join Date
    Nov 2001
    Location
    honolulu, hawaii
    Posts
    391

    a change of pace.

    I see changes coming. If the gov. can give OPM the right to define what law enforcment, and give equal pay to fed L.E. across the board, fed l.e. might be the right place to be. I see age 37 in the near future will change to 40. It makes to much sense (that may be the problem). I know capitol polce are age 37 but are not 6c and many dont want it due to OT conflict. I am a CBP Inspector and like the OT. It wil be interesting to see what happens. OPM has released it notes to the gov. We will see. who knows. Your thought please.

    Seaker

  12. #12
    Join Date
    May 2003
    Location
    Time and Space
    Posts
    310
    Eaglearm,

    Using your numbers: If you buy back your military time, and retire at age 57, you would have 30 years of credible govt service. Your retirement would be 44% of your "high-3" average salary. Only 20 years are counted at the higher rate of 1.7%. Anything over 20 is counted at the lower rate of 1%. Here is how it works:

    20 yrs (in an 6c covered position) X 1.7 = 34%
    10 yrs (if you buy back Mil time) X 1.0 = 10%
    Total = 44% of your high-3 salary

    In addition to the 44% retirement, you will receive Social Security (if it is still around in 20 years), and the annuity from your TSP (Thift Savings Plan). So that will bump things up a bit. Currently, you can't claim any SS benefits until age 62, the govt will pay you a supplement for the time between ages 57 and 62. Once you reach 62, the supplement will stop, whether you start getting SS benefits or not.

  13. #13
    Eaglearm Guest

    Thanks

    Thanks. I'll have to print this post and save it for my files.

  14. #14
    Join Date
    Jan 2001
    Posts
    1,588
    Eagle,

    Reservoir hit all the numbers for you. What your 44% will be based on depends on where you spend your high three years (i.e. the locality you get in LA is a lot different than what you get in Biloxi, MS). For the locality I'm in, at the 15 year mark (GS13, step 10), I'll be at $121,000/year (in todays dollars). For you that would mean a pension worth $53,240.

    For the TSP you can put up to 14% of your pay (pre-tax) in to your account. The G matches (I think I have this right, check me Reservoir) you dollar for dollar for the first 3% and .50 on the dollar for the next 2% (that's why you need to put in at least 5% to get the matching dollars. So, that's a total of 18.5% of your pay going towards your TSP. That should turn out to be a good chunk of change over 20 years.

    Like I said before, local PD guys usually make out better on the percentages, but generally speaking, anyone in the fed. system earning LEAP (especailly if you go to GS13 as a journeyman), is going to make more money during their career (at just over the two year make I'm at about $70,000/year as a GS11, step 3. FYI-I'm at step 3 because of the pay matching I got as a fed. employee transferring to ATF), which of course translates in to a better quality of life. I'm NOT saying that being a fed. agent is better than being a cop. There's just a whole lot to consider. You having 10 years of military service you can buy back puts you in a pretty good position. Being that you're 36 year old, you might also be able to get a small pension with your current agency, if you've been there long enough, or get a pretty good chunk of change that you can invest in some type of retirement investment, again, if you've been there long enough to earn that.

    When I first hired on there was a guy in the office that had spent 15 years as an El Paso, TX police officer. He took a lump sum payment for his years (somewhere in the $200,000 range), which he invested. He hired on with ATF just before he turned 37, with no creditable military service time. So, the most he can get with ATF for a pension is 34%, but he'll make out pretty good with the money he invested from the El Paso PD. There's so much to consider, it can be pretty mind boggling for anyone other than an accountant.

    papi,

    I recently met a retired NYPD officer here in MI (not sure when he retired exactly, but it hasn't been long). His wife is from here and couldn't take living in the city any more. He said he stayed in patrol his whole career and when he retired was making $45,000/year. His pension is $1,600/month. He didn't go in to anymore detail about his pension, but I was dumbfounded at how little a patrol guy with that much time makes. My neighbor is a local officer who intends to stay in patrol and at the 12 year make he's making a little over $50,000). I knew you guys were underpaid, but I had no idea it was that bad. You almost have to move up the chain. Fortunately NYPD is so big the opportunities are endless (I assume).

  15. #15
    centerfield Guest
    Although there are somewhat different flavors of Fed retirement, the bottom line is that it's as good as it gets. As I've been advised many times, remember that those who make the rules on retirement for Feds (Congress) have the same system.

    Yeah.. there are some different calculations for LE, DoD, etc., but the basics are VERY good. And a key point to remember - if, at retirement, you were enrolled in a Federal health package, you get to keep it in retirement. That is no small point.

    Additionally, whatever your pension is at the time of retirement, you also get annual cost-of-living increases - usually about 2% On a $50K pension, that's $1K. That'll pay a few greens fees.


 

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