This Notice is intended as a resource document for career Foreign Service employees covered by the "old" Foreign Service Retirement and Disability System (FSRDS) or the "new" Foreign Service Pension System (FSPS).  A separate retirement planning guide is issued for Civil Service employees.  We ask that personnel offices destroy copies of the previous Retirement Planning for Foreign Service Employees Department Notice and retain extra copies of this year’s Department Notice to counsel employees.  This information is also available through the Department’s Intranet at http://hrweb.hr.state.gov/ret/index.html.

 

A.  PLAN AHEAD

1.  Virtual Locality Pay

The FY 2002-2003 State Department Authorization Act includes a provision that allows FS employees assigned abroad who participate in the FSRDS or the FSPS to have their annuity benefits calculated as though they received Washington, DC based locality pay in the computation of their high three average salary.  This provision is not retroactive.  It only applies to salary/service on or after December 29, 2002.

2. Retirement Planning Seminar

Employees in the Retirement Planning Seminar will learn about their annuity, financial and estate planning, tax issues, health and well-being in retirement, volunteer work, continued employment and more.  Experts in these fields will answer questions during a week of sessions, held six times a year at the Foreign Service Institute (FSI).  Spouses are also welcome to attend the seminar.

To attend the seminar an employee must be within 5 years of eligibility for voluntary retirement.  Management and Human Resources (HR) officers who may find information imparted at the Retirement Planning Seminar useful for counseling employees abroad are also welcome to participate at any convenient time.  All employees attending the seminar are on duty status during the days they attend.  Eligible employees traveling/transfer orders to an assignment other than Washington, DC or on home leave/return orders will be authorized per diem to attend the seminar.  Any questions about per diem should be addressed to the appropriate HR technician in the Bureau of Human Resources, Office of Career Development and Assignments, Assignments Division (HR/CDA/AD).  Employees who plan to attend the seminar while in the United States on R&R, personal, or official travel other than Post Assignment Travel, may be authorized per diem, which must be requested through the employee’s Career Development Office (CDO) in HR/CDA.

3. Job Search Program (JSP)

Employees who are interested in seeking full or part-time employment after retirement may wish to consult the Career Transition Center (FSI/CTC), Room E 2101, SA-42, Telephone: 703-302-7407, FAX: 703-302-7416), about attending the Job Search Program (JSP).  Employees in the program will receive assistance deciding what they want to do next, assessing skills, values and interests, preparing resumes, developing a network of people who can help in seeking a job, sharpening interviewing skills, and learning how to negotiate for compensation and benefits.

Foreign Service employees of the State Department may participate in the JSP during the last 60 days before retiring.  Civil Service employees may participate during their last 30 days. The formal classroom part of the Program lasts about 4 weeks.  All participants may use the Career Transition Center facilities for one year after retirement. 

Before beginning the Program, participants must agree to retire when the program ends.  Those who have not attended the Retirement Planning Seminar (RPS) must do so at the beginning of the program.  Those who already have retired may attend the JSP during their first year of retirement, but they must formally apply prior to retirement.  Per diem will not be authorized for the RPS when taken in conjunction with the JSP.  

4.Talent Bank

Those wishing to receive periodic lists of job leads may register in the Talent Bank by completing a registration form and sending it to the Career Transition Center.  The lists can be sent to home addresses.  Retired employees may retain active status in the Talent Bank for two years following retirement, during which time they may continue to receive the newsletter and job leads. From time to time registrants may be contacted directly concerning possible employment opportunities.  This service is open to all employees.

5. How to Apply

Employees who wish to apply for the Retirement Planning Seminar or Job Search Program should contact their CDO, who will register them for the requested programs. 

Employees who apply for the RPS must include approval from a supervisor.  Those who apply for the JSP should include the scheduled retirement date.  Schedules are announced periodically via Department Notice, cable and they are posted on Career Transition Center (CTC) Home Page.

The Talent Bank forms are available from the Career Transition Center at FSI, or from the Management or HR Officer at post.

Employees who will be receiving Post Assignment Travel orders should advise HR/CDA of their plans to attend these Programs by including the information in the TMTWO - Proposed Itinerary.

For more information, see 3 FAM 6100 or call the Career Transition Center at 703-302-7407.

6. Estimating Your Annuity 

(a) Credit for Service

Employees may receive full credit for any civilian service in the U.S. Government, provided the employee was hired by an appointment, rather than by contract.  Service for this purpose includes temporary and Christmas appointments with the US Postal Service, periods as a Peace Corps or VISTA volunteer, and service with other Federal agencies.  Service under a personal services contract (PSC) is not creditable for retirement purposes unless the employee specifically applied by January 8, 1990 for retirement credit for the PSC service under PL 100-238, and the application was approved. 

Many employees had temporary appointments in the U.S. Government before beginning their careers in the Foreign Service.  Service under these appointments is generally creditable without depositing retirement deductions for that service, but there is a small reduction in the annuity.  Any service for which an employee received a refund of retirement deductions is not creditable unless the amount of the refund, plus interest is repaid, except as explained below.  If a refund of retirement deductions was paid prior to November 1, 1983, interest only accrues at the rate of 3% per year, so there is no urgency to make a redeposit (repayment).  A new provision of law allows employees to receive credit for a period of CSRS/FSRDS service for which a refund of retirement deductions was paid (before October 1, 1990), without making repayment.  Under this provision, the annuity is reduced on an actuarial basis by the value of the redeposit, causing only a modest reduction in the annuity.  For example, failing to redeposit a refund of $7,000 would cause a monthly annuity reduction of only $32.

Military service performed on active duty is also creditable in the retirement benefits.  If the employee is receiving military retired pay when he or she retires under the FSRDS or the FSPS, the military service is not creditable unless the employee waives the military retired pay.  Military retired pay based on a disability incurred in combat, or reserve retainer pay which is payable at age 60, need not be waived for the military service to be credited.

Military personnel began paying social security benefits on January 1, 1957.  To offset the double credit for military service in both social security and Federal retirement benefits, the law requires payment of a military deposit, which is 7% of military earnings for service credited under FSRDS and 3% of military earnings for service credited under FSPS.  If the employee joined the Foreign Service prior to October 17, 1983, the military deposit is required for periods of military service performed on or after January 1, 1977.  If the employee joined the Foreign Service on or after October 17, 1983, the military deposit is required for periods of military service performed on or after January 1, 1957.  A summary of details on deposits for military service credit is provided in Appendix IV.  Employees who wish to make the military deposit should contact HR/RET.

(b) Extra Service Credit at Unhealthful Post

Any American Foreign Service employee who received either a new assignment or an extension of a new assignment, either of which was effective on or after February 16, 1990 is not eligible to elect extra service credit in lieu of post differential.  Any valid extra service credit election made prior to that date will continue to apply for the duration of the current assignment.  Likewise, any valid election made for a prior assignment will continue to be honored in the annuity computation.  Employees under the FSRDS who made valid extra service credit elections will need to ensure that the post properly certifies and promptly submits OF-140, Election to Receive Extra Service Credit in Lieu of Post Differential, to HR/RET.  No extra service credit can be allowed until this form has been received.  Employees under the FSPS were never eligible to elect extra service credit at an unhealthful post, but those who transferred from FSRDS to FSPS will receive credit for any valid extra service credit elections made under FSRDS.

(c) Approximate Annuity Computations - FSRDS

Once seriously considering retirement, the employee can easily figure his/her own approximate annuity computation, using pay records (not taxable income, which may be different).  To determine the average high three years of earnings (normally the last three years), determine the total salary earned for the 36 months preceding the anticipated retirement date, and divide by three.  The annuity is based on basic salary, including authorized locality pay, which is the salary of the employee’s class/step; it does not include overtime, post differential, danger pay or any other allowance.  The employee should adjust the salary for service abroad on or after December 29, 2002 by a factor available from your HR office, which represents the addition of the Washington, DC based locality pay to the high three average salary.  Using the service computation date found in latest PAR printout, determine total time of creditable service and add earned hours of sick leave.  A rule of thumb is 176 hours equals one month of service and 2087 hours equals one year.  For an employee retiring under the FSRDS, multiply the total by 2%(.02).  Then multiply the result by the average high-three figure.  For instance, 20 years of service times .02, equals a figure of .4, or 40%.  An average high-three earnings of $30,000, would indicate an annuity of $12,000 per year (.4 times $30,000).  If the maximum survivor annuity is chosen, the annuity is then reduced by approximately 10%.

(d) Approximate Annuity Computations -FSPS

Those who have switched to FSPS should use the FSRDS formula for the service prior to the date of change.  This benefit should then be added to the FSPS benefit, which is computed as follows.  Each year of service under FSPS is credited at the rate of 1.7% of high 3 average salary (up to 20 years of FSPS service) and at the rate of 1.0% of high 3 average salary for any service performed under FSPS in excess of 20 years.  (In other words, the 1.0% rate does not apply until the employee has worked for over 20 years under the FSPS.  An employee who had 20 years under FSRDS and 5 years under FSPS has the annuity computed at the rate of 2.0% of high 3 average salary for each year of service under FSRDS and 1.7% of high 3 average salary for each year of service under FSPS.)

The amount of unused sick leave the employee had at the time of the transfer to FSPS may be credited in the FSRDS portion of the annuity, provided the employee had at least that amount at the time of retirement.  If the maximum survivor annuity is chosen, the annuity is reduced by 10%.

Employees retiring under FSPS with an immediate annuity, except a Minimum Retirement Age (MRA) annuity payable at age 55-57, will be eligible to receive an annuity supplement until age 62.  The supplement (currently estimated at $30 per month for each year of service under the FSPS) approximates the Social Security benefit.  Eligibility for the supplement is subject to the Social Security Earnings Test. (Detailed step by step procedures for estimating annuity benefits are provided in the worksheet in Appendix III.)

(e)  The Alternative Form of Annuity (AFA)

What is the AFA or Lump Sum Payment at Retirement?

The AFA provides an eligible employee with an option of electing a lump sum payment equal to the employee’s unrefunded retirement deductions and a reduced monthly annuity, in lieu of a regular unreduced annuity.  (There is no reduction for the AFA in the rate of annuity payable to surviving spouse.)   In general, the annuity of one who is eligible to elect the AFA is reduced by about 10-l5%.

Who is eligible to elect the AFA?

(1)  Only Foreign Service and Civil Service employees who are suffering from a life threatening illness or disease (who do not retire on disability) may elect the AFA in one installment.

(2)  All other employees are INELIGIBLE. 

How is the lump sum payment distributed?

Employees under the FSRDS or the FSPS who have a life threatening illness are paid the AFA in one installment at retirement.

(f)  Obtaining your Record of Retirement Deductions

Some retirees may wish to obtain the record of their retirement deductions while employed at the Department of State.  In order to obtain this information, employees must write the Bureau of Resource Management, Retirement Account Division (RM/RAD), providing their name, date of birth, social security number, and dates of employment.  Since the top priority of RM/RAD is to authorize benefits to those who have already retired, employees who are requesting the amount of their retirement deductions should allow sufficient time for response (four weeks or more).

(g)  Taxation of Annuity Benefits

Under the law, employees who joined the Foreign Service prior to 9/25/75 and who retire on disability are not subject to Federal income tax.  The annuity of all other employees who retire is fully taxable by the Federal government, but each employee is entitled to a tax deduction equal to the amount of the employee’s retirement contributions.  This tax deduction is distributed over the lifetime of the annuity, so only a portion of the total contributions can be deducted from the taxable income each year.  For example, if a single employee had a life expectancy of 20 years at retirement, 5% of the retirement contributions could be deducted from the taxable portion of the annuity each year.

In general, about 85% to 90% of the lump sum payment under the AFA is fully taxable the year in which it is received.  However, legislation (PL 102-3l8) provides that if this payment is dated on or after January 1, 1993, the taxable portion of the AFA payment as well as any interest payable (on the second installment) can be "rolled over" to an Individual Retirement Account (IRA).  In addition, interest on any refund (dated on or after January l, l993) of retirement deductions withheld after 35 years of service can be rolled over to an IRA.  Any lump sum benefit that is not rolled over to an IRA shall be subject to automatic Federal income tax withholding of 20% of the taxable portion of that payment.  The retiring employee has 60 days to roll over the payment to an IRA.  Thus, if the payment is not sent directly to an IRA, the 20% tax withholding applies, but the employee can, within 60 days of the date of the payment, roll over the payment to an IRA and recover any taxes due when the tax return is filed.  

Employees who retire before the year in which they reach age 55 and elect the AFA are subject to a tax penalty of 10% of the amount of the taxable portion of the lump sum payment.  Details about taxation of annuity benefits or the AFA are explained in IRS Publications 575, 590, and 721, which are available from the IRS.

RM/RAD will withhold Federal income tax at the withholding rate applicable for a married employee with 3 dependents (total of 4), unless the employee requests another rate of withholding.  Each retiree must estimate his or her own state income tax liability and specify the amount of state income tax to be withheld.  Some states have no income tax, while others exempt all or a portion of Federal annuity benefits from state income taxes.  A list of these states is available in HR/RET.

(h)   Preparation of Annuity Estimates

HR/RET will do whatever it reasonably can to assist retirees in planning for retirement.  We will provide an annuity estimate for those who are seriously considering retirement.  We have provided a worksheet at the end of this notice that you may find helpful in estimating your own benefits.

(i)  Annuity (Estimate) Calculator

   

Employees can now use an online annuity calculator, available in e-Phone, to calculate their annuity (estimate) benefits.  In order to use the Calculator, you will need to enter a retirement date and your survivor election (maximum, minimum or none).  The survivor election is a benefit payable to your surviving spouse after your death.  The calculator will then verify that you are entitled to an annuity on a given date and estimate your annuity.  If the calculator does not work for you, you can submit an Application for Annuity Estimate, DS-5000, to HR-RET for processing.

7.  Lump-Sum Payment of Annual Leave

Retirees will be paid a lump sum for any unused annual leave.  Generally, a lump-sum payment will equal the pay the employee would have received had he or she remained employed until expiration of the period covered by the annual leave.

Lump-sum payments are calculated by multiplying the number of hours of accrued annual leave by the employee’s applicable hourly rate of pay, plus certain other types of pay the employee would have received, as specified by regulation.  Such other types of pay include locality pay, post allowances, special differential, and certain types of premium pay, but do not include post differentials, retention allowances, or physician’s comparability pay.  To compute an hourly rate of pay, divide salary by 2087.

 

8.  Thrift Savings Plan

(a)  Contributions

All employees under FSRDS and FSPS are eligible to participate* in the Thrift Savings Plan (TSP), which provides an opportunity to make tax-deferred investments in five investment accounts: a stock fund, a bond fund, a government securities fund, a small capitalization index fund and an international fund.  There is 60-day enrollment period for new employees. In 2004, employees under FSRDS may contribute up to 9% of their salary to the TSP, but they do not receive any government contribution towards the TSP account; employees under FSPS may contribute up to (a) 14% of their salary, or (b) a ceiling set by the IRS of $13,000 in 2004. In addition, employees age 50 or over (by December 31, 2004) can make catch-up contributions of $3,000.00 to the TSP.

FSPS employees receive an automatic government contribution of 1% of salary, and the government also matches the first 3% of their contributions $1.00 for $1.00, and the next 2% of their contributions $.50 to the $1.00.  Thus, an employee under FSPS who contributes 5% of salary to the TSP will receive government TSP contributions of 5%.

*Unlike participants of the Civil Service Retirement System (who are eligible to make voluntary contributions to the CSRS), Foreign Service participants are ineligible (Public Law 94-350, July 12, 1976) to make voluntary contributions to the FSRDS or the FSPS.  Participation in the TSP is the only government-sponsored investment option available to Foreign Service employees.

Investment Fund Options

There are five investment funds: the Government Securities Fund, known as the Government or (G) Fund; the Common Stock Fund, known as the Stock or (C) Fund; the Fixed Income Fund, known as the Bond or (F) Fund, the Small Capitalization Index Fund or (S) Fund and the International Fund or (I) Fund.  Employees are free to allocate their TSP investments (and agency contributions) to any fund.  An employee can change investments by filling out a form, making a change on-line (http://www.tsp.gov/.), or by calling the TSP Service Office in New Orleans. 

Borrowing Options

Employees who participate in the TSP can borrow from their own contributions for any reason.  Interest begins to accrue on the loan at the rate of return on the Government Securities Investment (G) Fund at the time the loan application is received at the TSP Service Office.

TSP Lost Earnings

Employees are reminded that the regulations now allow employees to be reimbursed for "lost earnings" due to administrative errors in processing valid TSP elections, errors in retirement code, etc.  Any employee who believes he or she is entitled to lost earnings under the TSP should write HR/RET and provide as much documentation as possible.  RM/CFSC will determine whether lost earnings are payable, notify the employee and coordinate processing of any amount due.

(b)  Withdrawals

When an employee retires, he or she may immediately withdraw the amount in his or her TSP account, or defer withdrawal of the account.  The TSP will be notified that the employee has retired and HR/RET provides the employee with the forms necessary to withdraw monies from the TSP.  An employee may withdraw the TSP account in many ways, including a single lump sum payment; a series of equal lump sum payments; a monthly annuity with or without a survivor benefit, and with or without a cost-of-living adjustment.  TSP withdrawals are fully taxable, but an employee may defer taxation by rolling over a TSP account into IRA.  An employee who retires before the year in which he or she reaches age 55, and who withdraws a TSP account in single payment or a series of equal payments, will be subject to a tax penalty on amounts withdrawn before age 59 1/2.

Additional information on the TSP may be obtained by contacting the National Finance Center at (504) 255-6000 or by visiting the TSP website: http://www.tsp.gov/.

B.  ONCE YOU DECIDE

1. Get Prepared

Retiring involves a series of actions, required by statute, by various offices within the Department and by outside agencies.  Designated forms and documents have to be fully and accurately completed by the retiring employee, and by the Department before final salary and annuity payments can begin.

2.  Retirement Counselors

Foreign Service employees have a retirement counselor (determined by alphabet) in HR’s Office of Retirement (HR/RET).  That counselor provides employees in the Washington area the forms that need to be completed to begin retirement processing, and serves as a guide throughout the retirement process.  The counselor works closely with HR/CDA (Office of Foreign Service Career Development and Assignments), which, after retirement is approved, initiates the separation orders that allow travel and shipment of effects.  Additional questions concerning the retirement process may be directed to HR/RET at (202) 261-8960.  Our office is located in Room H-620, SA-1 (Columbia Plaza).  Our FAX number is (202) 261-8988.

3.  Employees Abroad

Once Foreign Service employees serving overseas have decided on a firm retirement date, they should obtain forms DS 5004 (Application for Retirement) and OF-126 (Residence and Dependency Report) and pouch them to HR/RET, together with a copy of their latest earnings and leave statement.  The employee should cable HR/RET the date of pouching and a travel itinerary so that HR/RET will know where to send the initial retirement letter indicating formal approval of the retirement, and the required forms necessary to initiate the annuity.  This cable should also be sent to HR/CDA/SL, HR/CDA/ML or HR/CDA/EL as appropriate.

4.  Choosing a Retirement Date

(a)  FSRDS Annuitants

In order for FSRDS annuities to start the day following retirement, the date of retirement must be one of the first three days or the last day of a month.  Selection of any other date causes the annuity to be delayed until the first day of the month following retirement.  Salary is payable on a normal workday basis, while an annuity is pro-rated on a 30-day month regardless of the number of days in the month.  Therefore, if the first falls on a Friday, that may be the best date to retire, since the annuity would start on Saturday, the second.  However, if the third is a Friday, that would be a better date since the employee would be receiving salary rather than annuity for two more days.  Also, if the last day of the month ends a pay period, that may be a better date.  The selection of a date also figures into the service credit time, and may affect the reduction under the alternative form of annuity, which is based on the age at retirement.  Each individual case is different, but the retirement counselors in HR/RET can advise as to what date is best as far as service time is concerned.

(b)  FSPS Annuitants

In general, the annuity of employees who voluntarily retire under FSPS will begin the first of the month after the month in which the employee retires.  Therefore, FSPS retirees should plan to retire on the last day of the month so that their annuities will begin the next day.

5.  Annuity Payments

A Foreign Service retiree can normally expect that the first annuity payment will be sent 30 days after retirement--if all the required forms in HR/RET’s initial retirement letter (see No. 3 above) are returned to HR/RET before the 5th of the month following retirement.  For example:  If retirement is effective 6/30/03, the annuity commences 7/1, and the first payment is dated the first business day of the following month, 8/1.  The monthly payment should be via Electronic Transfer of Funds to a bank account. 

6.  Retire Abroad?

Those employees retiring abroad, who do not stop in Washington, will need to contact their retirement counselor and arrange for all out-processing, including physicals.  Employees retiring from abroad are eligible for the Job Search Program during the first year after retiring, but they must formally apply prior to retirement.

7.  Separation Address

A Foreign Service employee’s final separation address documented on the Residence and Dependency Report (Form OF-126) can be anywhere in the United States and its territories.  The choice must be made before the effective date of retirement and before travel orders are processed.  No changes can be made after the last day in pay status.  The address indicated in Block 8 of the OF-126 is the location to which separation travel orders will be issued and is not necessarily the same as your correspondence forwarding address.  If the employee’s last duty station prior to retirement is Washington, D.C. and an address in the Washington, D.C. metropolitan area is listed in Block 8, no separation travel orders will be issued.

8.  Travel and Shipment of Effects (Reference 6 FAM 133.2-2)

(a)  Time Allowed to Travel and Ship

When an employee is separated from the Service and qualifies for travel and shipment of effects, the actual departure of the employee, the departure of the employee’s eligible family members and the transportation of all effects shall not be deferred more than 12 months (6 months if separation is from a domestic assignment). The time limitation will be calculated from the employee’s last day in pay status, unless an earlier or later limitation is specified in the travel authorization. An extension may be granted; however, the maximum time limit including an extension cannot exceed 18 months from the employee’s last day in pay status, regardless of whether separation occurs from a domestic assignment or from an assignment abroad.  Requests for extension of the time limitation to travel and ship effects should be submitted to the appropriate HR technician in HR/CDA/AD.  No exceptions beyond 18 months can be made.

If travel or transportation of effects is interrupted for personal convenience, the final departure of travelers and effects from any point(s) of interruption must take place within the time limitation specified in the separation orders.

(b)  Travel Orders and the End of the Fiscal Year

If your retirement date falls near the end of the fiscal year (September 30), it may affect the issuance of your travel orders.  For retirement travel beginning overseas, an expense (packing of effects, purchase of an airline ticket, etc.) must be incurred in the fiscal year in which the orders are issued and travel must commence within the first two weeks of the new fiscal year.  If orders are issued and no expense is incurred by September 30, the orders would have to be cancelled and reissued in the next fiscal year.  If you plan to delay the beginning of your travel more than two weeks into the new fiscal year, your orders should be issued in October rather than in September.  Early submission of your travel plans will assist in determining which fiscal year should be charged and preventing an unnecessary obligation of funds.

(c)  Ship Effects Only to Final Destination

Warning:

An employee should not ship effects against the separation orders unless he/she is certain the place of separation specified in the orders is the final destination.  While he/she is authorized to attend the RPS and is allowed to change the place of separation prior to the actual date of separation, the employee will be allowed shipment only from his/her old post to the final destination.  For example, an employee in Canberra identifies Washington, D.C. as the separation address; the orders will authorize shipment to Washington.

(d)  Temporary Storage:  (Reference 6 FAM 176.1d)

In connection with the separation of an employee from the Foreign Service, temporary storage is authorized for an aggregate period of three (3) months for each separate lot of household effects.  For effects already in storage in the United States, the three-month authorization commences from last day in pay status.  For effects originating abroad or in the United States (other than from storage), the three months authorized may be applied to storage in-transit and/or storage at destination.  An additional period of up to 90 days may be authorized in extraordinary circumstances.  Extensions may be requested through the employee’s HR technician in HR/CDA/AD.  The request must include the reason an extension is needed and it should be submitted prior to the expiration of the initial 90 days.

(e)  Weight Allowance for Shipment and Storage of Effects:  (6 FAM 163)

The combined shipment and storage of effects allowance has been established at the statutory limit of 18,000 pounds, net weight, for each employee, regardless of family status.  An employee departing a furnished, limited shipment post will be authorized the limited shipment allowance of 7,200 pounds in addition to the net weight of effects in storage not to exceed the statutory limit of 18,000 pounds.

(f)  Shipping/Moving Prohibitions (6 FAM 168.4 Prohibitions in Connection with Resignation, Retirement, or Separation)

Upon an employee’s resignation, retirement, or separation from the Service, everything need not be shipped at once.  However, shipments must not be deferred more than 12 months as noted in 8(a) above.  In addition, the Government only provides transportation for effects (including a privately owned car) that were the property of the employee or an eligible family member while the employee was in an active duty status in the Service.  Effects (or a car) acquired en route to a place of residence upon separation will not be transported at Government expense.

A certification of compliance with this section is required on the employee’s travel voucher.

(Please note: a separation travel authorization to move within a metropolitan area cannot be authorized.  Therefore, the Government cannot provide for the transportation of effects from an employee’s present residence to a new residence within the same metropolitan area.)

(g)  A Travel Voucher Must be Filed (4 FAM 465.1 Traveler’s Responsibility)

A travel voucher must be filed upon arrival at the retirement location.  Also, please refer to 6 FAM 113 Official Travel Expenses, and 6 FAM 115, Traveler’s Responsibility.  Send completed voucher to: Department of State, F/DFS/FO/PD/TV, SA-15, 1800 N. Kent Street Arlington, VA  22219.

(h)  Consultations in Washington

Retirees are normally authorized three consultation days in Washington, D.C. en route to the separation address.  No per diem can be paid for consultations in Washington, D.C. if the residence for service separation is within the Washington, D.C. metropolitan area (see 6 FAM 156.6-1c).  Eligible family members are not authorized consultation in connection with a separation order.  They may travel via any route; however, reimbursement for travel expenses will be based on the cost of transportation from the employee’s duty station to separation address only.  If the employee’s separation medical exam will be performed in Washington, D.C., it should be scheduled to take place during the consultation period.

C.  GET THE PAPERWORK DONE

1.  Start Early

Separation travel orders will not be sent until the retirement has been paneled and the employee has submitted a TMTWO-Proposed Itinerary (if retiring from an assignment abroad).  Panel action cannot take place until the retirement application has been approved and the final OF-126 is received.  HR/RET’s letter of retirement approval, enclosing all the forms needed to get an annuity started, is generally sent 1 to 3 months before the effective date of retirement.

This letter will also include information on benefits payable to the spouse or former spouse of the retiree.  The time it takes to complete the process can vary, depending on whether the Department’s records are up-to-date.  Employees can help by making a habit of reviewing the accuracy of their Earnings and Leave Statements and most recent Notification of Personnel Actions (SF-50).  Retirement counseling well before the requested date of retirement will also help speed the process.  Regulations require applications for retirement to be submitted 90 days before actual retirement.  However, HR/RET will strive to process late applications as quickly as its workload permits.  Last-minute applications may delay initial annuity payments.

2.  Other Forms

Submit to HR/RET: a mailing address for the annual leave lump-sum payment; the DS-8A, Administrative Clearance; the DS-8, Fiscal Clearance from the HR officer at post or the bureau executive office (needed to prevent delay in the annual leave lump-sum payment); and travel itinerary so HR/RET knows where to send the letter containing the annuity forms once retirement is approved.

3.  Medical Examinations/Disability Retirement

Separation medical examinations are required and should be initiated within 90 days prior to the planned retirement date and completed within 90 days after the retirement date.  Examinations may be completed at post if adequate facilities exist.  If medical exams are to be completed in MED in the Department while on consultation, make appointments with MED in advance via telegram (see State 008390).  Those posted in Washington, D.C. may call (202) 663-1779/1782 to schedule an appointment.

Retiring employee’s eligible family members – spouse, children up to age 21 - are also eligible for separation exams. However, since eligible family members are not authorized to travel to Washington, D.C., examinations may be completed at the separation address, or at post.  Each retirement letter contains a statement of intent, or no intent, to apply for disability retirement.  If disability retirement is not initially requested, application is possible within one year post-retirement provided it is determined that total disability existed on the date of separation from the Service. If one became a member of the Foreign Service prior to September 25, 1975, a disability annuity is exempt from Federal income tax.

FSRDS Disability Retirement: If you retire on disability under FSRDS, you will receive an annuity which is guaranteed to be at least the lower of (a) 40% of your high three average, or (b) your annuity computed under the regular formula, but projecting your service to age 60.

FSPS Disability Retirement: If you are under 62, but not eligible for regular (50/20) retirement, your annuity during the first year of disability FSPS Disability retirement is at least 60% of your high three average salary, less 100% of your social security benefits.  During the second year and until age 62, your annuity is at least 40% of your high three average salary, less 60% of your social security benefits.  At age 62, your annuity is recomputed as if you worked until age 62 and your average salary is increased by the FSPS cost-of-living adjustments.

4.  Annuity, Life Insurance, Health Insurance Coverage

HR/RET’s retirement letter will provide detailed information to assist retirees in making decisions about:  (a) choosing the full annuity or a reduced one with a survivor annuity; (b) the 18-month period in which to change a survivor election if the initial election provided less than the maximum survivor benefit; (c) choosing the regular or the alternative form of annuity, if applicable; (d) electing a health insurance change i