Planning to Retire in the Next Six Months?
Friday, October 29, 2010
OPM Announces Delay with the Retirement Determination Process
If you are planning to retire in the next six months be advised that the Office of Personnel Management (OPM) announced a delay with the retirement determination process.
What does this mean for you? If you are planning to retire at the end of 2010 or the first half of 2011, you can expect to receive “interim” payments (approximately 75 percent of your final annuity payment) for six to eight months. These payments represent a portion of your final annuity and are usually made on the first business day of each month.
OPM will only withhold federal income tax from the interim pay. If you elected to be covered by federal health and life insurance, the coverage will continue while you are receiving interim pay. OPM will begin withholding federal health and life insurance premiums retroactive to the beginning date of your annuity once your retirement application is finalized.
The FAA has advised us that the OPM is finalizing a Benefits Administration Letter (BAL) designed to address employee questions and concerns regarding the interim payments and delay processing retirement applications. As soon as it comes out, we will forward it to the membership.
For more information, please see this story that appeared in the Federal Times: