Dear Class Members,
The firm finally received notice from OPM of its approval of the modifications to the annuities of retirees who elected that option. We hope to send within the next week the second set of notices regarding the second payment to class members.
Second Payment Issues
Please be aware that the “total pay loss” noted on your paysheet will NOT be the amount you will receive as payment, and is likely to be higher than what you’ll actually receive, but is only given so that you can see how the payments were calculated. We cannot provide your exact payment amount at this time, as we do not know the total amount of the settlement fund to be distributed until our CPAs complete the fund’s taxes and we know whether all class members will be accepting awards. Also, note that the calculations for the second payment are much more complicated than for the first payment. The pay sheets will have notes explaining some of the key elements of these calculations - we ask that you read these carefully before contacting us with questions!
Also note that the Verification Form requests that you certify whether you were covered by the Civil Service Retirement System (CSRS) during the years for which you will be paid. We must have this information to determine what tax withholdings may need to be made. If you do not know, check with your personnel office or with OPM if you are retired. Contact us, however, if you changed your retirement election during the 1991-2002 time frame, or otherwise do not believe you were covered by only CSRS or only FERS as a DCVAMC employee during this time.
Retiree Option
Retirees who elected a change in annuity should expect to receive notification soon from OPM of the changes to their annuities. You may receive a lump sum back annuity payment and/or find that your modified annuity payment has gone into effect prior to receiving notification from OPM of these changes. The revised pay scales provided to OPM are the same as the “Revised Pay” listed on your paysheets. Do not forget that you will be given “0" lost pay for your last three years of employment because you elected the revised annuity option. You should direct all questions concerning the recalculation of your annuities directly to OPM.
Tax Issues
Some of you have asked whether the firm will issue 1099s with regard to last year’s class contribution payments. 1099s will be mailed by this weekend listing last year’s payment as other (non-wage) income. You should consult your tax professional with regard to how to deal with this payment.
Also, the second payment will be treated as wages, from which withholdings will be made as required by law. We plan to send the W-2s along with the checks for your second payments, and you should retain this information for your tax returns. Again, you should consult your tax professional with regard to these withholdings and how to deal with the second payment.