Our former Central Jersey Area Local President, Hank Anderson, is currently the Retiree Counselor for the Greensboro NDC Local # 7035 and has sent in a few articles that he wrote and felt this information may help some of the union members from his former local.

Our most recent former President, "TJ", looked them over and felt this was good info to pass along.

Thank's to Hank for thinking of us here in New Jersey.

Don’t go on a blind date with VERA

The National APWU has concluded the arbitration hearing, with the USPS, in late May. As usual, there are rumors (on the workroom floor), that the USPS will be offering a VERA (Voluntary Early Retirement Incentive) to eligible employees. In the past, several former employees had made a decision to “go on a blind date with VERA” without being prepared for life after the U.S. Postal Service.

There are several steps that need to be done prior to a VERA being offered to the workforce. First, the USPS must contact the Office of Personnel Management (OPM) to request an opportunity to offer the early-out incentive. The USPS must give details, to OPM, of why this request is being made, the possible number of impacted employees, and provide an anticipated date that the USPS wants the retirements to take place. The OPM must review this information and determine if they will grant the USPS request. Since the OPM is the agency that handles all of Federal Government employees retirements they will need to be assure that the retirements can be processed, in a timely manner, by their department. The OPM will contact the USPS if their request has been approved (or not).

Second, the USPS must present this proposal to the National APWU President. The President (and APWU Staff) will have an opportunity to negotiate the terms of the VERA. These terms may include, but not be limited to, incentive bonuses, number of people from each APWU represented craft, deadline for submission paperwork, and/or what type of employees will be eligible (full time and/or part-time). If both parties reach an agreement, on the terms, then they will sign off and send a copy to OPM. At that point, the National APWU will notify the members of the VERA and the terms which were negotiated for the VERA.

In the past ten (10) years, the APWU and USPS had agreed on two (2) VERAs’. The first one took place in 2009. The USPS stated that due to the slumping economy, low mail volume, and the Postal Service Accountability and Enhanced Act of 2006 (PAEA) that there was a need to offer this incentive. This VERA was offered to approx. 57, 000 eligible Clerks and the USPS were anticipating that 6,496 Clerks will accept terms. The National APWU President (William Burrus) was able to negotiate an incentive package for $10,000. This incentive was paid out in two (2) installments of $5,000 each. Unfortunately, this VERA wasn’t offered to the eligible members of the Motor Vehicle and Maintenance Crafts. Management stated that “because of their specialized skills” it will be a major impact to facilities if these employees left early.

The second VERA took place in 2012. The USPS stated that they needed to offer the VERA based on the same reasons in 2009. However, the APWU negotiated that a “special incentive package “is offered to the VERA eligible employees, Regular Retirement Employees, and Voluntary Separation Employees. The incentive included that the employees receive an incentive of $15,000 that was paid out over two (2) installments. Unlike, the previous VERA, the incentive was offered to eligible employees of all APWU represented crafts. However, a limit was placed on the eligible employees in the three (3) Accounting Services Department in Eagan (MN), San Mateo (CA) and St. Louis (MO). Also, the VERA was offered to Part-Time Flexies (PTFs’) and Non-Traditional Full-Time (NTFT) employees in assignments of less than forty (40) hours. During this VERA, approx. 20,000 APWU represented employees said goodbye.

There are three (3) different types of retirements. They are Disability Retirement, Voluntary Early Retirement, and Regular (Optional) Retirement. For the purpose, of this article, we will talk about the minimum requirements of the Voluntary Early Retirement and Regular Optional Retirement.

To be eligible for Regular (Optional) Retirement you must meet the minimum requirements:

•55 years old (or more) with 30 years of service

•60 years old (or more) with 20 years of service

•62 years old (or more) with 5 years of service

To be eligible for a Voluntary Early Retirement, you must meet the following minimum requirements:

•50 years old (or more) with 20 years of service

•Any age with 25 years of service

If a VERA is offered (or not), and/or you are planning for Regular Retirement, there are a few things that you should check on first:

-Social Security Records: Contact the Social Security Administration office and take a look at your records. It is important to make sure all of your years of earnings are listed so that your Social Security is calculated at the highest rate possible. If you switched from CSRS to FERS check to see how many years of service that you will earn towards your Social Security earnings. You can contact the Social Security Administration at (800) 772-1213.

-Service Time: Contact HR Shared Services in regards to your creditable service time. Check to make sure that all years are included whether it is with the USPS or any other federal agency. If your total government service time isn’t correct then this should be discussed with a HR Specialist. Making sure that this is correct will guarantee that your calculations are processed for the highest annuity possible.

-Military Time: Check with HR Shared Services to see if this time is added to your USPS time. Based on personal choices, you may (or may not) want to pay the deposits (back) to add this time to your creditable service years. Several former military personnel wait until they are ready to retire to inquire about this. If you plan on retiring, several years down the line, now will be the best time to see if paying the retirement contributions is the best thing for you to do.

-Service Break: Did you have a break in Service with the USPS (or another Federal Agency)? Usually, individuals are given an opportunity to get a refund of their retirement contributions. Do you fit this category? If so, if you haven’t done already, you can redeposit those funds to guarantee credit for all the years of service. Contact HR Shared Service to discuss any redeposits that you may owe. 

Retirement planning is something that will take effort, on your part to do, whether you are retiring in 5 or 10 years. If you will be working, longer than 10 years, then there isn’t any reason as to why you shouldn’t start planning now. The planning process starts with having your paperwork (in order), estimating your expenses (pre and/or post retirement) and discussing with family when will be the best time for you to choose that date.

New Changes to Social Security Benefits

In October 2015, HR 1314, also known as the Bipartisan Budget Act of 2015, was passed by Congress. The legislative bill called for some modifications to the Social Security program which will take effect on May 1, 2016. Section # 831, of the Act, made several changes to the Social Security Act and closed two(2) complex loopholes that were used primarily by married couples. The name, of Section # 831, was entitled “Closure of Unintended Loopholes”. This law made changes to “Deemed Filing” and “File and Suspend.”

The pending changes are relatively minor and they do not take away any existing benefits or alter core Social Security Benefits or payment levels. The changes will alter or eliminate a few strategies used by some people to maximize their Social Security Benefits. However, there are individuals that are still in position to be “grandfathered “in and take advantage of these strategies while they still exist.

Deemed Filing

Deemed filing means that when you file for either your retirement or your spouse’s benefit, you are required “or deemed” to file for the other benefit as well. The current law provides incentives to delay claiming retirement benefits. The incentives included that monthly benefits grew larger for each month that you delayed receiving retirement benefits between full retirement age (currently 66) and 70. The loophole allowed some married individuals to start receiving spousal benefits at full retirement age while letting their own retirement benefit grow by delaying it. The benefits will grow at a rate of 8% per year. This currently exists for individuals that are eligible for benefits as a retired worker and as a spouse (or divorced spouse).

Under the new law, deemed filing will be extended to apply to those at full requirement age and beyond. In addition, deemed filing may occur in any month after becoming entitled to retirement benefits. For example, if you begin receiving your retirement benefit and only later become eligible for a spousal benefit (or vice versa), you will be “deemed” to have applied for the second benefit as soon as you are eligible for it. Your monthly payment will be the higher of the two benefit amounts.

Historically, spousal benefits were designed to be paid only to the extent that they exceeded any benefit the spouse earned in his or her own work record. The Budget Act rationale, for this change, was to preserve the fairness of the incentives to delay. Also it means that you cannot receive one type of benefit while at the same time earning a bonus (incentive) for delaying the other benefit.

If you turn 62 on or after Jan. 2, 2016 and will be eligible for benefits as a retired worker and as a spouse (or divorced spouse) then the new law will apply to you. Deemed filing applies to retirement benefits and not survival benefits. Deemed filing does not apply if you receive spouse’s benefits and are also entitled to disability, or if you are receiving spousal benefits because you are caring for the retired worker’s child.

The Social Security Administration has already implemented this change because the law applies to those who attain age 62 on Jan. 2, 2016 or later.

File and Suspend

This method is a “piggyback” on Deemed Filing. As I mentioned above, retirement benefits grow for each month you delay claiming between full retirement age (currently 60) and 70. Under the current law, the loophole allowed a worker at full retirement age (or older) to apply for retirement benefits and then “voluntarily suspend” payment of those retirement benefits. This allowed a spousal benefit to be paid to his (or her) spouse while the worker was not collecting retirement benefits. This worker would then have the ability to restart his (or her) benefits later with an increase for every month retirement benefits were suspended.

Under the new law, you can still voluntarily suspend benefits payment, at your full retirement age (currently 66), in order to earn higher benefits for delaying. But during a voluntary suspension, other benefits payable (such as benefits to your spouse) are also suspended. Also, if you have suspended your benefits, you cannot continue to receive benefits (such as spousal benefits) from another individual. There is an exception if you are a divorced spouse then you can continue receiving a divorced spousal benefit even if your ex-spouse voluntarily suspends his or her retirement benefit.

The Budget Act’s rationale, for this change, is that it eliminates the Social Security Administration for paying dependents if the primary worker hasn’t retired or is not receiving payments from Social Security. Also, it preserves the fairness of the incentives to delay so that simultaneously couples cannot receive benefits and bonuses for delaying.

The new law applies to individuals who request a suspension on or after April 30, 2016. In order to request a suspension, you must have reached your full retirement age (currently 66).

In some situations, the Social Security Administration will honor requests received before April 30, 2016. If you contact the SSA and request to apply before the deadline, and if the SSA is unable to process (before deadline), your request will be honored to voluntary suspend your benefits.

Also, if you voluntarily suspend benefits (prior to April 30, 2016) you may remain in voluntary suspense status and the new law will not affect you. If you submit your request (before deadline) then your spouse (or children) will be entitled to benefits either before or after the deadline. They will not be impacted, by the new rules, and will continue to receive payments.

Determining when to start your Social Security benefits is a personal and complex decision. We encourage you to research your options before you apply for benefits. The Social Security Administration can be contacted at 1-800-772-1213 if you wish to speak with a representative about your retirement options.