The Foreign Service Journal, January 2004

W hen I retired, I received a “Foreign Service Annuity Supplement Computation,” which noted that, “The annuity supplement takes the place of the Social Security portion of FSPS, which is not payable until age 62. The annuity supplement is payable only until the month prior to the month in which the retiree reaches age 62,” regardless of whether I actually receive Social Security benefits or not. The document included the calculated supplement and was signed by the chief of the Retirement Division under the words, “I certify the above as true and correct as shown by the records of the Department of State.” When I reached 62, I received an “Annuity Adjustment Notice” reducingmymonthly annu- ity by the amount of the supplement. Did you? Youwill have seen theQ&Aon pension overpayments in the November 2003 AFSA News. We addressed this issue because 10 retirees have contacted AFSA after being notified by the department that their pensions had been overpaid, some for many years and into the tens of thousands of dollars. In most cases, the reason was that the department failed to stop the annu- ity supplement, and the retiree failed to real- ize that it was still being paid (it is not shown separately on the monthly annuity breakdown you receive). We don’t know howmany retirees have been notified but have not contacted AFSA; the department declined to tell us how many cases of overpayment had been found. (There were also some cases of underpayment.) AFSAGeneral Counsel SharonPapp, two other AFSA staffers and I met recently with Cecilia Cooper, the chief of the Retirement Division (HR/RET), and representatives from the Legal Advisor’s office and the Resources Management Bureau (RM), to discuss this issue. They said they were confident they had now found all the erroneous annuities, and that all those affected had been notified. The problem, they said, arose from the fact that the supplement is not automatically stopped; some- one has to manually change the annuity. Until recently, the retirement office did not even have the capability to do a com- puter printout of those nearing age 62. Themove of the depart- ment’s Finance Center to Charleston, S.C., further complicated matters. The department officers also acknowledged that the letter notifying retirees of an annuity error was “not very consumer-friendly” (a true understatement!) and did not even identify the reason for the over (or under) payment. The letter is being changed, computer systems have been upgraded, and Ms. Cooper has instituted a system to check and double-check cal- culations to prevent future errors. The November Q&A explained how retirees can contest the notification of overpayment and/or request a waiver— in effect, forgiveness—of part or all of the overpaid amount on grounds of financial hardship. The department representatives told us that they “wouldn’t want to discourage anybody from requesting a waiver.” What they do discourage is stonewalling —failing to exercise any of the annuitant’s options, which are to repay, appeal the repayment decision, request a full or par- tial waiver of repayment or file a grievance. A retiree who does nothing will eventu- ally have to repay with interest, and the payments can be deducted fromthe annu- ity. Annuitants who request a waiver must, of course, fully document their financial situation, andAFSA can provide some guidance on that. We pressed our interlocutors on the standards used to determine whether a waiver is justified and whether in some cases a compromise could be reached on the repayment amount. They declined to go beyond saying that retirees with a total income of $12,000 a year would obvious- ly be waived, and that those with $2million in assets obviously would not. Those in between, they insisted, had to be looked at on a case-by-case basis. The Office of Personnel Manage- ment has published guidelines for Civil Service that serve as a “baseline,” but they said the department wants to do better than the baseline. The department is trying to redact information protected by the PrivacyAct so that they (andAFSA) can explain the facts of some of the cases where waivers have been grant- ed without violating privacy rights. That would provide some guidance to other retirees. As we noted inNovember, if you are uncertainwhether your annuity is correct, you may ask HR/RET to recalculate it by submitting Form DS-5000. And, of course, retirees who are members of AFSA may always come to us for help. ▫ When I reached 62, I received an “Annuity Adjustment Notice” reducing my monthly annuity by the amount of the supplement. Did you? V.P. VOICE: RETIREES BY GEORGE JONES JANUARY 2004 • AFSA NEWS 5 Watch Your Annuities