Back to Basics: Understanding Special Groups Retirement Benefits in the Federal Government

3.21.25: Audio automatically transcribed by Sonix

3.21.25: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Speaker1:
Welcome back to the federal retirement Show. I'm your host, Val Majewski with American Benefits Exchange. I really appreciate you taking the time out of your busy schedule to join us to view our content. Remember, if you do like this, you like the content that we're putting out there. You like the material, you like the topics. Uh, share it with others. There's a lot of colleagues that you have that we're also work with the federal government that can use this information. And we just want to be a reference piece. We want to be a place where you can find honest and accurate information when it comes to your benefits and retirement information. We also appreciate your dedication right here. Your consistent attendance, uh, you know, like subscribe. Make sure you get notifications when a new episode comes out. Uh, if you're in the drive you've seen we're anywhere from 5 to 30 minutes per episode, but it's going to be beneficial. It's going to be information that other federal employees just like you are looking for. Last thing on that, if you do have any topics or recommendations or things that we do not talk about on a regular basis that you want to hear, we want to hear from you and let us know what those things are. I've bumped into so many federal employees over the years, um, the years of us doing this, as well as even recently at certain events where they're like, hey, it'd be great if you did a topic on that.

Speaker1:
It'd be great if you had an episode on this or if somebody come up and say, hey, I'm a I'm a listener of the podcast. I appreciate what you do, but when are you going to talk about such and such? We want to hear from you because I think I know what you need to hear, but I want to also know what you want to hear. So reach out to us. How do you do that? You can contact us directly by going to our website, Federal Retirement Show.com fill out the form. We will be in touch to talk about your personal benefit situation, but also you can let us know what else you want to hear. So today's topic we're in this series called back to the basics. And when we're talking about this it's just going back to the fundamentals. If you know my background, I played baseball professionally for ten years before working specifically with federal employees. And we always constantly worked on the fundamentals. You think, man, federal, federal professional baseball players take a lot of ground balls, fly balls. They hit a lot of balls off the tee or take batting practice constantly. Why? Because you have to hammer home these fundamentals. You have to do it over and over and over again. So it becomes a good habit. It becomes repetition.

Speaker1:
It becomes second nature. Same thing here. We want to share with you this information, even if it's stuff we've talked about before. We need to go back to the basics, back to the fundamentals, so you understand at least some of the root issues that federal employees just like you are dealing with. So today, our back to the basics, we're going to be talking about special groups federal retirement. We had a back to the basics before going about regular federal retirement for your your normal CSRs and Fers employees. But what if you were part of a special group? What that means either you're a federal law enforcement officer, a federal firefighter, or an air traffic controller. You're part of what I call and what is generally known as special groups. And your retirement is slightly different. So let's dive into today's content and talk about going back to the basics with special groups. Federal retirement. So as I mentioned, if you are a federal law enforcement officer, federal firefighter or air traffic controller, you're in what's known as the special groups category. And what does that mean? That just means that you have slightly different contributions to the federal retirement system. You have slightly different requirements for retirement as far as when can you leave. And then you have a slightly different calculation when it comes to your actual retirement that you're going to receive when you leave service. So a couple of things here.

Speaker1:
The first, how many systems are there. These are the same right. They're CSRs CSRs offset. There's fers fers ra and fers free. We went over all of these things during our back to the basics just federal retirement episode. This being special groups what is the difference. Well, if your CSRs and I know I'm meeting less and less CSRS employees because they're not meeting any new ones or they're not making any new ones, but these are federal employees that are hired prior to 1984. There's no Social Security, and a traditional CSRS employee contributes seven whole percent out of every paycheck towards the pension system. If you are a CSRs, you're putting a half a point more if you're in special groups, so it's 7.5% going towards the pension system. And just like regular CSRs, you're eligible to contribute to TSP, but there are no matching funds given. This is CSRS, special groups. Now, if you're part of the firs special groups, um, these there's three different categories. Firs, firs r, E and f are really the only difference as far as these next few slides are concerned are going to be your contribution percentages. Contribution percentages. So Firs special groups you're going to be contributing 1.3% towards your pension system. The traditional Firs employees put point 8% 8/10 of 1%. Go to the Firs system. Now when we rewind the tape right. The last one was CSRs. And they're putting in 7 or 7 and a half if their special groups.

Speaker1:
For Firs traditional special groups it's 1.3%. Still it's 6.2% every pay period towards Social Security, but 1.3% towards the first system. If you're an RA, sorry RA, which stands for Revised annuity employees, and you're also part of the special groups. Your contribution will also go up by half a point, from 3.1% each pay period, to 3.6% each pay period. These are folks that are hired in 2013, so just in 2013, special groups are a revised annuity employees putting 3.6% towards the pension system. If you're an Fri meaning further revised annuity employees and this means that you are hired after 2013, your contribution also went up by half a point if you're in special groups instead of 4.4 for the traditional Fri, you're putting in 4.9% towards the pension system. Okay, so really, for special groups, the way it looks on the front end, you're just putting in more. You're putting half a percent more than your regular Fers employee counterparts. Why is that? Because I said you guys are special. This is a special group. And what is different about you is going to be. The next section that we talk about is when can you leave? Now, I mentioned this all the time. The two biggest questions that we get asked by federal employees when it comes to retirement are when can I leave? When can I get out of here? When does my minimum that I need to satisfy in order to retire with full benefits? And then what am I going to receive? What's my pension going to look like? How do I calculate it? Now for special groups, here's your retirement eligibility.

Speaker1:
You have to satisfy one of these two main criteria. You need to be age 50 with at least 20 years of service as a special group employee, or have you can retire at any age if you have at least 25 years of service as a special group employee. Now, I'm going to explain this because let's say that you worked for the government. You were a federal law enforcement officer. I actually had this happen recently. It was a federal firefighter that worked as a federal firefighter for over ten years. I believe it was about 15 years in this example, 15 years, and then switched out to another position that was not covered under special groups. Will those 15 years did not allow her once she got to 20 to then retire? Right. This better employee had to then wait for the normal Fers retirement requirements in order to be eligible for retirement. So this means if you have your age 50 with at least 20 years of service as a special group employee, you can retire any age if you have at least 25 years of service. A special group. Now you're forced out. Forced out at either age 56 or 57.

Speaker1:
When does this occur? If your air traffic controller you're forced out or have forced retirement at age 56? If your federal law enforcement or federal firefighter your forced retirement is age 57, you can retire early or earlier than your regular first counterparts, but you're also forced out at an earlier age if you're still in those positions. Now, there could be some ways where you can take another job, another position and work beyond those forced years, but are forced age ranges. But a lot that I see, a lot that I talk to will leave by then because they'll be able to retire with full benefits at age 50, or at any age if they have 25 years of service. So that's the first thing. When am I eligible to leave? When are you able to go? If you're in the special groups, like I said, law enforcement, firefighter, air traffic control, these are the things you have to satisfy. Remember, you are putting in more towards the pension system for this, I'd say privilege or for this opportunity. And because of that also, you're going to get a slightly higher calculation than your traditional Fers counterparts. So I said the first question is when can I leave? Next question is what am I going to receive? How do we calculate this. Well it all revolves around your high three. So that is the same for traditional Fers employees versus special groups.

Speaker1:
The high three is the average of your highest three consecutive years of total base pay. Base pay plus locality. It's the highest 36 month period during your career. And they take the average of that. Now as a traditional Fers employee it's typically just base pay plus locality. No bonuses or overtime or things like that are included. But for special groups, that's not entirely correct because for some of the special groups, your AEW or your automatic overtime or your your special pay right, or your leap pay or your overtime that you get, it could also count towards your high three. Now, if you're part of special groups, those things can count towards your high three. I'm not guaranteeing it depending on your position, whether you are again law enforcement, firefighter or air traffic. But it's important to note that those things could also be considered in your high three if you're part of these special groups, but just typically base pay plus locality. And for the special groups, each of you might have different things that you get get added into your high three. Like I said, premium pay different bonuses. Leap pay a you know, things of that nature could be included in your high three. So how do we calculate the pension? The pension is calculated by taking that high three. And for the special group you're multiplying it by 1.7% for the first 20 years of service, 1.7 for the first 20 years.

Speaker1:
Then it is 1% thereafter. So if you had 25 years of service, 25 years of service as a special group employee, you would take your high three, multiply it by 1.7% for the first 20 years, so high three times 1.7 times 20 years. And then add to that high three times 1% times five years in this example. And that would be your total annual retirement annuity, your annual pension. And you'll start to get that right away. So if you had 25 years at age 50 and you could retire based on those requirements we mentioned, then you will start getting that immediately upon retirement. So pretty awesome stuff. If you put in the time as a special group employee, the same type of retirement income sources that a traditional Fers employee has. And I'll talk about some other things that might be available, but you've got your CSRs or Fers annuity. Now if your CSRs you're relying basically on one pension check, even if your special groups is still one pension check for Fers employees it is Fers the first pension plus the first supplement or Social Security. So here's the cool thing. If you retire, let's say you retire as a federal law enforcement officer at age 50. With 20 years of service, you'll collect an immediate pension. You'll also get the Fers supplement, and you'll get that first supplement from age 50.

Speaker1:
In this example until age 62. So you have this gap filler. You have this bridge that you're going to be able to get as a result of retiring with full benefits as a special group, you'll get that earlier. Tsp will be another income source for you. Now, there are, um, you know, different provisions. I mentioned this before that TSP for those that retire from, uh, Fers service, if you want to have access to your TSP funds upon retirement, you have to wait until at least age 55 to retire to be able to take money out of your TSP without penalty. As a Fers employee. As a federal employee, we'll say that here. Um, the special groups provision allows for for some withdrawals from your TSP prior to even age 55 if you retire with full benefits as a special group employee. So that's just another little caveat. Another little thing that we can talk about on a personal level. If you have other questions. And then if you have supplemental accounts, right, maybe you had a previous 401 K, you have an outside IRA or a Roth IRA or other retirement savings account that we can factor in to see what your total retirement income looks like. I've mentioned this before, and it's the same is true for special group employees. But most federal employees want to get to 100% or as close to it of their pre-retirement income in retirement.

Speaker1:
So of the money you were taking home before you retired, federal employees want to take home the same, if not very, very, very close to that so they can live the same lifestyle in retirement. But I generally see, even with special groups falling between 50 to 80% of that mark. So how do you know where you stand? How do you know what your situation looks like? Even if you are special groups and you have an enhanced payout and retirement, it still might not be enough once we run the numbers. Because remember, you're going to be getting the first supplement, which is not as much as your Social Security amount that you can collect at age 62. You don't have as much time maybe to be putting into TSP if you're retiring at 50, compared to a regular Fers employee that retires at 60 or 62. So how do you know where you stand? You have to get a benefits review done. You have to have somebody take a look at your situation, run the numbers, check out the calculations, show you your entire scenario so you can ensure that you're heading in the right direction. How do you do that? I mentioned our website, Federal Retirement Show.com. Fill out the form. You can request a full benefits and retirement evaluation. Um, one of our experts, if it's not me personally, will be reaching out to schedule time with you and we'll share with you a couple of different reports.

Speaker1:
We'll plug in all the numbers we'll share with you, not only talking about pension, but we'll talk about your fegley. We'll talk about your your pension system, your pension calculation, survivor benefits. We'll talk about the supplement or Social Security. We'll talk about TSP and wrap it all up in a nice bow so you can see exactly where you currently stand. And if there's any modifications or changes that need to be made so you can hit your desired goals. That's the whole thing. That's what this all boils down to. That's what I hope you are tuning into our show and watching our podcast as diligently as you do, is to make sure that you are heading in the right direction. Make sure when the time comes for you to retire, submit your paperwork and you leave. That you're retiring how you want, when you want, with the lifestyle that you want, and along the way, making the best decisions, the best choices because you've got all the information you have all the variables, you know, all the data so that you can pick apart your situation and make sure that you are set up correctly. Ensure that you are efficiently heading in the right direction towards retirement. I say that a lot, but it is true. I don't want you to, uh, take time to do this. If you realize you have to make a decision or you'd like to get a benefits review done, reach out to us today.

Speaker1:
Do it right now. It doesn't take much time to fill out a little form. Put some information in there so somebody can follow up and schedule some time with you. If you realize you need to make a move or you need to find out what's going on, fill out that form, we'll be in touch. So again today we talked about special groups of how it's slightly different than a regular CSRS and Fers employee use. Special group employees appreciate what you do appreciate your service if you're in harm's way with law enforcement or firefighter air traffic controllers. A lot of respect. I know there's it's a stressful situation. It is a very stressful job. There's there's a lot of things going on in the air that the average person probably doesn't know about, that you have to deal with on a daily basis. So appreciate all of you and what you're doing to keep us safe. Um, thank you all for again your attendance. If you do like this, subscribe. Get your notifications. So you get all the the new content. Share it with your colleagues. We want to make sure all the federal employees out there have this information. That's why we do what we do. So thank you again for your attendance. Appreciate you showing up each and every episode and look forward to seeing you in the future.

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