Chapter 4: Section 1

After you retire, the Office of Personnel Management provides most benefits services that your human resources office provided while you were an active employee. When OPM receives your retirement application, it will notify you of that fact and provide you with a civil service ID number, which consists of seven numbers preceded by “CSA.” Use that number when contacting OPM about your annuity; if you need to contact OPM before you get that number, ask your former agency’s payroll office for the number and date of the Register of Separations and Transfers you were on. You also would need your payroll ID number, which is on each pay statement.

Final adjudication of claims can take a number of months. Until OPM completes the adjudication of your claim, you will receive interim payments based on an OPM estimate of your correct monthly amount. Interim payments average about 80 percent of the final amount, although the percentage can be substantially lower in some cases. Complex employment histories and inaccurate or incomplete information on application forms are common causes of delays. Upon final adjudication, full benefits will be paid and you will be reimbursed for any shortfall from the interim payments. 

See Applying for Retirement and Survivor Benefits in Chapter 3, Section 4, for information on challenging OPM’s benefits determination if you disagree with it.

Retirement annuity payments cover the preceding month. Almost all retirees receive their annuities through direct deposit, with the funds available at the chosen financial institution on the first business day of each month, or, if the annuitant does not designate one, through the government’s Direct Express Debit MasterCard program. For those receiving payment by check, mostly applicable to long-time retirees, mailings are timed to be received on that day. While OPM administers the benefits, the payments come from the Treasury. 

If you asked on your application that federal taxes be withheld, the amount you specified will be deducted from your annuity; if you didn’t specify an amount, the deduction will be based on the “married plus three dependents” rate. Elections for withholding of state taxes, if applicable, also can be made. If you chose not to have taxes withheld, you’ll have to fully settle any tax obligations on your own, typically involving quarterly payments. 

See Section 3 of this chapter for information on how benefits are adjusted for inflation.

Retirees no longer contribute to the retirement system. They further may not make investments in the Thrift Savings Plan, get government contributions toward their TSP accounts or borrow against them. However, they can leave their TSP accounts in place, within limits, and can continue to shift money among the investments funds. They also have a number of options to withdraw money or transfer it into other tax-favored accounts, again within limits. See Chapter 6.

Retirees must pay the premiums of any government-sponsored insurance that they are eligible to continue and wish to continue. If you were eligible to carry your coverage under the Federal Employees’ Group Life Insurance program (FEGLI) and the Federal Employees Health Benefits (FEHB) program into retirement, OPM will automatically deduct from your annuity any premiums due on a monthly basis. Note that the monthly premium withholding is slightly more than twice the active employee biweekly rate since there typically are 26 biweekly pay periods in a year, not 24.

Premiums under the Federal Employees Dental and Vision Insurance Program will transfer automatically from payroll to annuity withholding, although OPM recommends that you also contact your carrier; those premiums also will be deducted monthly rather than biweekly. If you have coverage under the Federal Long-Term Care Insurance Program and are paying those premiums through direct billing or automated withdrawals from a financial account, you do not need to make any changes. However, if you had FLTCIP premiums deducted from pay as an active employee, you will need to contact the carrier to switch to withholding from your annuity, direct billing, or automated withdrawals. 

Although insurance rates do not change because of retirement (except that postal retirees lose the additional FEHB premium subsidy paid to postal workers versus non-postal workers), benefits under FEHB and FEDVIP effectively become more expensive because retirees are not eligible to pay those premiums with pre-tax money through “premium conversion.” That is not the case with FEGLI and FLTCIP, where all enrollees pay premiums after-tax. However, premiums under FEGLI increase when you advance into a higher age group, as they did when you were an active employee.

There are restrictions on new enrollments after retirement under FEHB and FEGLI for those who did not carry those benefits into retirement. New enrollments are allowed under FEDVIP and FLTCIP after retirement regardless of prior coverage status. 

Various changes to FEHB and FEDVIP are allowed for retirees on the same terms as for employees during the annual open season for those programs and on experiencing certain life events. FEGLI coverage cannot be increased in retirement, only decreased or canceled, and that program’s rare open seasons do not apply to retirees, Retirees also are not affected by the opportunity for employees to newly enroll with only minimal underwriting during the rare open seasons in the FLTCIP program, although they are subject to any general premium increases; in addition, at any time retirees can cancel or reduce coverage or, within restrictions, increase it. 
See Chapter 2 for details on each program.See Section 2 of this chapter for information on post-retirement survivor benefit elections. 

Special rules apply to annuities and other benefits for retirees re-employed by the government, as described in Section 4 of this chapter. 

For information about Social Security enrollment and benefits, see Chapter 3, Section 9. For information about Medicare enrollment and costs, see Chapter 5, Section 8.

Note: In phased retirement the individual does not separate from service but rather changes to part-time employment (while collecting a partial annuity), and is treated as an active employee, not as an annuitant, for benefits and other purposes during the phased retirement period. Special rules apply to annuity computations and to inflation adjustments at full retirement. See Phased Retirement in Chapter 3, Section 1.

For retirement information and to make certain changes, such as providing a new mailing address or starting or changing direct deposit or tax withholding, go to www.opm.gov/retirement-services. You may also contact OPM at retire@opm.gov, (888) 767-6738 or write to OPM, Retirement Operations Center, P.O. Box 45, Boyers, PA 16017-0045. 

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