Employee Benefits - NIH Benefits Information - Did You Know? April 2008
What’s New?
Topics Of Interest:
- The Thrift Savings Plan (TSP) - Do You Want Free Money?
- When Is The Best Date To Retire?
- Can I Transfer Money From My IRA To My Thrift Savings Plan (TSP)?
- What Does It Mean To “Assign” Coverage Under The Federal Employees Group Life Insurance (FEGLI) Program?
- As A New/Returning Federal Employee, What Should I Think About Now In Terms Of Retirement Preparation For The Future?
- Why Do I Need A myPay PIN?
Where Do I Go If I Have Questions About My Benefits?
1. BENEFITS CALENDAR OF EVENTS
2. NEW IRA TRANSFER OPTION OFFERED BY THE THRIFT SAVINGS PLAN (TSP)!
The TSP now offers a new option permitting eligible participants to transfer money from their TSP account to a Roth IRA, as well as to a traditional IRA or other eligible employer plan (like a 401(k) plan). Eligible participants are those individuals who are eligible for an age-based in-service withdrawal (age 59 ½ or older) or those individuals who have separated from Federal service. Please note that participants cannot transfer Roth IRA funds into the TSP. For additional information, refer to the TSP website.
3. THE THRIFT SAVINGS PLAN (TSP) – DO YOU WANT FREE MONEY?
If you are covered by the Federal Employees Retirement System (FERS), the TSP (pdf) is a major component of your retirement benefit. The TSP gives you the opportunity to save a portion of your salary on a pre-tax basis. If you contribute at least 5% of your bi-weekly gross pay to your TSP account each pay period, you will receive an additional 5% in agency contributions (TSP) each pay period. That’s free money! You pay no taxes on your contributions or the earnings until you withdraw the funds from your account. By beginning your contributions early, you take advantage of the effects of compounding. Contributing to the TSP is voluntary.
If you are covered by the Civil Service Retirement System (CSRS) or CSRS-Offset, you can also contribute to the TSP. Although, you do not qualify for agency contributions, the TSP does offer an excellent opportunity to provide you with supplemental retirement income later.
The IRS limit for 2008 is $15,500 for regular TSP contributions, and $5,000 for TSP catch-up. You may start, stop, or change your TSP election at anytime via myPay (DFAS). Even if you don’t remain with the Federal Government until retirement, you can take your vested account balance with you. For valuable information about the TSP features, visit the TSP website.
4. WHEN IS THE BEST DATE TO RETIRE?
If you are covered by the Federal Employees Retirement System (FERS), you must retire on the last day of the month in order to have your annuity commence the next day. If you are covered by the Civil Service Retirement System (CSRS) or CSRS-Offset, you must retire on the first, second, third, or last day of the month to have your annuity commence the following day.
For those of you who have wondered why so many individuals choose to retire at the end of the year, here’s why, retiring at the end of the calendar year will typically maximize your lump sum payment for your unused annual leave, including use or lose. It will also ensure that the lump sum payment for some of your annual leave, likely the majority of it, will be paid at the new pay rate. Additionally, the lump sum annual leave payout will be made in the following tax year when you may have less taxable income. With that said, if you are covered by FERS, the best end of year retirement date in 2008 is December 31, 2008. However, if you are covered by CSRS or CSRS-Offset, the best date is likely January 2, 2009. If you have questions, please notify your Benefits Contact.
5. CAN I TRANSFER MONEY FROM MY IRA TO MY THRIFT SAVINGS PLAN (TSP)?
Yes, you can transfer money from a traditional IRA or an eligible employer plan (TSP) into your existing TSP account. Please note the TSP can only accept transfers that consist of before-tax money. It will be subject to income tax when it is eventually paid to you from your TSP account.
To transfer your money, you must complete a Form TSP-60 (Request for a Transfer Into the TSP) and give it to the administrator of your IRA or plan for certification. Your former plan will then send the completed TSP-60 and the funds to TSP. The funds will be invested in your account according to your most recent contribution allocation. If you haven't made a contribution allocation, the funds will be invested in the G Fund. If you have questions about your transfer, contact the Thrift Line at 1-877-968-3778.
6. WHAT DOES IT MEAN TO “ASSIGN” COVERAGE UNDER THE FEDERAL EMPLOYEES GROUP LIFE INSURANCE (FEGLI) PROGRAM?
Assignment means that you give ownership and control of your Basic, Option A, and Option B life insurance coverage to someone else. You are still covered by life insurance, and you must continue to pay for it, but someone else “owns” and controls your coverage. You may assign your life insurance coverage to an individual, a corporation, or an irrevocable trust. FEGLI is generally assigned to comply with the requirements of a court order upon divorce, for inheritance tax purposes, to get money before death (if terminally ill), or to satisfy a debt. For detailed information regarding an assignment, refer to the OPM website.
7. AS A NEW/RETURNING FEDERAL EMPLOYEE, WHAT SHOULD I THINK ABOUT NOW IN TERMS OF RETIREMENT PREPARATION FOR THE FUTURE?
You should keep in mind the importance of investing in the Thrift Savings Plan (TSP). This is especially important if you are covered by the Federal Employees' Retirement System (FERS) (OPM), given that the TSP (pdf) is a major component of your retirement benefit. Early contributions take advantage of the effects of compounding and agency contributions to your TSP account of up to 5% of your basic pay. Even if you don’t remain with the Federal Government until retirement, you can take your account balance with you.
For returning employees, if you had prior temporary Federal service or if you took a refund of your retirement contributions (for CSRS covered service) upon separating from your prior Federal position, you may need to pay a deposit/redeposit in order to receive credit for that service for retirement purposes. If you have questions, your Benefits Contact will be able to assist you. A delay in paying a deposit/redeposit could result in a significant increase in the deposit/redeposit amount owed.
If you have active military service, you may need to pay a military deposit in order to receive credit for that service for retirement purposes. Your Benefits Contact will be able to answer any questions you have regarding this as well. A delay in paying the military deposit could result in a significant increase in the deposit amount owed.
8. WHY DO I NEED A myPAY PIN?
It is very important to have access to your myPay account so that you can view your Leave and Earnings Statement each pay day. You must also use myPay to make changes to your home address, TSP contributions, direct deposit of pay, allotments, and Federal and state tax withholdings. Additionally, all open season health insurance elections must be accomplished using myPay. If you have misplaced your myPay PIN, you may request a new one in one of two ways. One of which is by selecting “New Pin” on the myPay (DFAS) website. Please make sure you use the “Go” button to finalize your request. Using this method your PIN will be mailed to your current address of record within 7 to 10 business days.
If you need it sooner, your second option is to send a fax to 216-367-3549. You will need to include in your request your name, a daytime phone number, and a copy of your NIH ID, and you must sign the fax. Upon receiving your fax, the Defense Finance & Accounting Service (DFAS) will reset your PINusing the last 5 numbers of your SSN as your temporary PIN. You will then be able to log in within 3 days using your temporary PIN. Upon logging in, you will be prompted to reset your PIN.
If you encounter problems with your PIN or technical issues using myPay (DFAS), contact the DFAS Centralized Customer Support Unit toll-free at 1-888-332-7411. This support line is available Monday through Friday, 7:00 A.M. to 7:30 P.M. Eastern Standard Time. The Centralized Customer Support Unit can provide assistance on how to use the options available to you in myPay. The Centralized Customer Support Unit will also provide support for establishing and changing your PIN.
9. HOW CAN I GET IN TOUCH WITH MY BENEFITS CONTACT?
Your contact in the Benefits and Payroll Liaison Branch will be able to help you with a variety of issues pertaining to the health and life insurance programs, designating beneficiaries, the Thrift Savings Plan (TSP), calculating your retirement annuity estimate, working with you to pay a redeposit for prior civilian service if you previously withdrew your retirement funds, paying a deposit for prior civilian or military service for which retirement deductions were not withheld, etc. To find your benefits contact, review our list of contacts. In addition, the Benefits and Payroll Liaison Branch (BPLB) website has a wealth of information regarding your Federal benefits. Human resource topics not related to your benefits are normally handled by your Client Services Division HR Representative.
