UACES Facebook C.E.S.P. 8-1: Health and Life Insurance - Federal Employees

Employee Benefits - Fringe Benefits

C.E.S.P. 8-1: Federal Benefits and Retirement

Date Revised: 11-11-2015          
Supersedes: 2-21-2013

Summary: Establishes policies and procedures for employees with federal benefits to participate in federal health insurance, life insurance, and retirement programs and in the University of Arkansas Retirement Plan.

History

Until 2003, non-classified employees who joined the UA Cooperative Extension Service enjoyed a special federal appointment status through the United States Department of Agriculture called “Schedule A appointment” which allowed them to participate in federal benefit plans. The termination of federal Schedule A appointments was mandated by the 2002 Farm Bill (the Farm Security and Rural Investment Act). Effective January 31, 2003, Extension employees formerly on federal Schedule A appointment were allowed to maintain their University appointment status and were allowed to retain certain federal benefits.

Federal Employees Health Benefits Program (FEHB)  and
Federal Employees Group Life Insurance (FEGLI)

All eligible employees with federal benefits have the option of participation in the Federal Employees Health Benefits Program (FEHB) and the Federal Employees Group Life Insurance (FEGLI).

FEHB offers comprehensive self only, self plus one (eff. 1/1/16), or self plus family coverage. The FEHB program consists of a wide selection of health plans to choose from and provides health benefits that offer a complete line of medical services, such as doctor's office visits, hospitalization, emergency care, prescription drug coverage, and treatment of mental conditions and substance abuse. The U.S. Office of Personnel Management (OPM) is the administrator of the FEHB Program.

FEGLI provides group term life insurance to protect your family from burdensome funeral costs and catastrophic income loss if you die unexpectedly. FEGLI consists of Basic life insurance coverage and three forms of Optional life insurance.  Eligible employees are automatically enrolled for Basic life insurance unless coverage is waived. Enrollment in Optional insurance is not automatic; however, Basic insurance is required in order to elect any of the Optional life insurance options.

Basic insurance coverage is your annual salary rounded up to the next even $1,000, plus $2,000. It covers you alone, and the cost does not increase with age. Basic insurance includes accidental death and dismemberment coverage.  

Option A provides you with $10,000 of coverage. The cost increases with age.

Option B offers you coverage in 1, 2, 3, 4, or 5 multiples of your salary rounded up to the next even $1,000. The cost of Option B insurance depends on your age, in five year age brackets. When you have a birthday that moves you to another age group, you will begin paying the premiums for the new age group in the first pay period that starts after your birthday.

Option C automatically offers coverage for all of your eligible family members. in 1, 2, 3, 4, or 5 multiples of your salary. Each multiple is equal to $5,000 for your spouse, and $2,500 for each of your eligible children. You, as the insured enrollee, receive the life insurance payment when an eligible family member dies. The cost of Option C increases with age.

Retirees and Survivor Annuitants

Federal retirees and their surviving spouses retain their eligibility for FEHB health coverage at the same cost as active employees. In order to carry FEHB coverage into retirement, you must be entitled to retire on an immediate annuity under a federal retirement system for civilian employees and must have been continuously enrolled (or covered as a family member) in an FEHB plan for the 5 years of service immediately before the date your annuity starts, or for the full period of service since your first opportunity to enroll (if less than 5 years).

In order to carry FEGLI Basic and Optional (if applicable) coverage into retirement, you must be entitled to retire on an immediate annuity under a federal retirement system for civilian employees and must have been continuously enrolled in FEGLI for the 5 years of service immediately before the date your annuity starts, or for the full period of service since your first opportunity to enroll (if less than 5 years).

To review your summary plan description, visit www.OPM.gov or contact the CES Human Resources department for more information about these programs.

Retirement Plans for Employees with Federal Benefits

Extension employees with Federal benefits participate in the Civil Service Retirement System (CSRS), the CSRS Offset Plan, or the Federal Employees Retirement System (FERS).

The Civil Service Retirement System (CSRS) is a defined benefit, contributory retirement plan where the employee and employer make contributions into a “pool” of funds from which members receive a retirement income based on a benefit formula.  CSRS benefits are based on your "high-3" average pay and the years of service. Under the general formula, 30 years of service will provide 56.25 percent of the "high-3" average salary. You contribute a percentage of your pay to CSRS. You generally pay no Social Security retirement, survivor and disability (OASDI) tax, but you must pay the Medicare tax. Cooperative Extension matches your CSRS contributions. Since 1983, CSRS has been a closed system that allows for current member participation only, i.e., no new enrollments are available. 

Certain Extension employees participate in the CSRS Offset Plan. When you retire as CSRS Offset, you receive full CSRS benefits until you are eligible for Social Security benefits, generally at age 62. At that time, your CSRS benefit is offset by the portion of your Social Security benefit that represents the period of time you were covered by both CSRS and Social Security.

The Federal Employees Retirement System (FERS) was implemented in 1984. FERS is a retirement plan that provides benefits from three different sources: a Basic Benefit Plan, Social Security, and the Thrift Savings Plan (TSP). The Basic Benefit and Social Security parts of FERS require you to pay your share each pay period. Cooperative Extension pays its share too. Extension withholds the cost of the Basic Benefit and Social Security from your pay as payroll deductions. Then, after you retire, you receive annuity payments each month for the rest of your life.

Federal Retirement: Regular Eligibility   (CSRS/Offset & FERS) 

Age

Length of Federal Service

 

 

62 years

5 years

60 years

20 years

55 years   (CSRS)

30 years

Minimum Retirement Age*    (FERS)

30 years

 

                    *FERS Minimum Retirement Age (MRA) is a specific age between 55 & 57, based on the year you were born.

For specific information regarding Federal retirement plans, please visit https://www.opm.gov/retirement-services/ . Contact the CES Human Resources department at 501-671-2219 for questions about participation in the UA Defined Contribution Retirement Plan.

Participation in the UA Retirement Plan

Employees in the Civil Service Retirement System (C.S.R.S. and C.S.R.S. Offset) and Federal Employees Retirement System (F.E.R.S.) may also participate in the UA Defined Contribution Retirement Plan (the Plan).  Unlike these federal retirement plans, the UA defined contribution plan does not pay a specific pension benefit when you retire.  Your retirement benefit is dependent on the earnings or losses of your retirement investments

  • C.S.R.S.: You may make contributions to the Plan, but it is not mandatory. Extension will contribute an amount equal to 5 percent of your salary. You may contribute any amount. Extension will match your contribution up to 9.2 percent of $62,700 plus 3 percent of your salary above $62,700.
  • C.S.R.S. Offset: You may participate in the Plan, but it is not mandatory. Extension will match your contribution up to 3 percent of salary.
  • F.E.R.S.: You may make contributions to the Plan, but it is not mandatory. There is no employer matching contribution.

There are two companies in the UA Defined Contribution Plan (CESP 8-19): Fidelity Investments and TIAA-CREF.   You may allocate contributions to either company or both. Fidelity Investments is a mutual fund company which offers an opportunity to make pooled investments in stocks, bond, and short-term investments. T.I.A.A./C.R.E.F. is a nonprofit financial services company which offers investment opportunities in long-term bonds and common stocks. Benefits from each include lifetime annuities and lump sum payments.

Vesting in the UA Retirement Plan

To be vested in the UA Defined Contribution Plan means that you own the money in your retirement account. Employee contributions are 100% vested immediately.  University (employer) contributions are vested if, while employed in a benefits-eligible position, the employee:

  • Completes 12 consecutive months of employment
  • Reaches age 65
  • Becomes disabled as determined by the Social Security Administration or the University's long-term disability insurance provider
  • Dies

Employees not vested when they leave University employment forfeit any University employer contributions made to the Plan.