The FERS Retirement System
FERS Annuity Menu
Your basic FERS retirement annuity is computed based on your length of service and "high-3"
average pay. The high-3 is calculated by adding your highest salary for three
consecutive years, then dividing the amount by three. Usually this is your last
three years of federal service. The high-3 average pay includes locality pay and annual premiums
for standby duty and availability if applicable. Other pay such as
differentials, overtime, allowances and others are not included.
Generally, your regular FERS retirement benefit is calculated according to this formula:
1%* of your high-3 average pay
years of creditable service
* High Three Adjustment
If you retire at age 62 or later with at least 20 years of service, a factor
of 1.1% is used rather than 1%.
To determine your length of service for computation, add all of your periods
of creditable service, then eliminate from the total any fractional part of a
month (less than 30 days).
Depending on the category of retirement benefits you receive, your benefit may
be reduced as described in the Retirement Options section. For example, the
total could be reduced if you elect to retire at the minimum retirement age
before completing 30 years of service.
FERS employees are eligible for a retirement annuity at the
Minimum Retirement Age (MRA) with just 10 years of service. However, if
you retire at the Minimum Retirement Age (MRA) with 10 service, but less
than 30 years of service, your benefit will be reduced by the age reduction.
Reduction - Your MRA annuity will be reduced by 5 percent
per year (5/12 of 1 percent for each month) in which your retirement
date precedes your 62nd birthday. However, you can postpone the
commencing date of your annuity to reduce or eliminate this age
Computation of an MRA
retirement: (1% x high-3 salary x years of service) –
age reduction = MRA annuity
There is a difference between a postponed and a deferred FERS retirement.
A deferred retirement means
that you are not fully eligible for a retirement annuity, but you can apply
for the deferred retirement when you are eligible, such as when you reach
the MRA. For example, if you are 50 years old with 18 year of service,
you can apply for a deferred retirement when you reach your MRA of 57 years
A postponed retirement means that you are fully eligible
for an immediate MRA +10 retirement annuity, but you elect to delay the
retirement to reduce or eliminate the age reduction. For example, you
are at your MRA of 56 with 20 years of service. You elect to postpone
the start of your annuity until you are 60, you avoid the age reduction.
Postponed example 2: If you retire at age 56 with 10 years of
service, you are 6 years away from age 62. Your retirement benefit checks
will be reduced by 30% if you start receiving your annuity right away. In
contrast, if you wait until age 58, the reduction in your payments would be
If you choose to postpone the starting date of your annuity, your FEHB
and FEGLI coverage will terminate. When you start receiving your annuity,
you may reinstate your FEHB and FEGLI coverage if you met the eligibility
requirements to continue coverage into retirement when you left Federal
employment. This does not apply to a deferred retirement because they
are not eligible for an immediate annuity when they left Federal service.
If you meet certain requirements, you will receive a Special Retirement
Supplement which is paid as an annuity until you reach age 62. This supplement
is somewhat similar to the Social Security benefit earned while you were employed by the
Federal government. However, since the formula for the Special Supplement
assumes a working life of 40 years, each year of FERS service is worth
one-fortieth of the estimated Social Security benefit. Therefore, the FERS
Supplement is often significantly less than your Social Security benefits. The
supplement ends at age 62 even if you elect to wait to apply for Social Security
You may be eligible for a Special Retirement Supplement if
- After the Minimum Retirement Age
(MRA) with 30 years of service;
- At age 60 with 20 years of service; or
- Upon involuntary or early voluntary retirement (age 50 with 20 years of
service, or at any age with 25 years of service) after the U.S. Office of
Personnel Management determines that your agency is undergoing a major
reorganization, reduction-in-force (RIF) or transfer of function. You will
not receive the Special Retirement Supplement until you reach your MRA.
If you transfer to the Federal Employees Retirement System (FERS) from the
Civil Service Retirement System (CSRS), you must have at least one full calendar
year of FERS-covered service to qualify for the supplement.
If you have earnings from wages or self-employment that exceed the Social
Security annual exempt amount ($15,120 in 2013), your Special Retirement
Supplement will be reduced or stopped.
calculate your Social Security Offset through one of several calculators
that we offer on this site.
FERS employees will also be able to use the
Calculator spreadsheet even though it was originally designed for CSRS
retirements. FERS employees projected annuity without survivor benefits will
be the same; just enter your annuity estimate, age, year of retirement, what
you consider to be a realistic growth rate, and the spreadsheet will
calculate your annuity for the next 40 years! The column reserved for your
annuity with survivor benefits will be slightly lower since the maximum
spousal benefit is 50% for FERS, not the 55% for CSRS. Also, the full FERS
annuity will cost the retiree a little more because FERS employees pay 10%
of their annuity for a full survivor’s benefit where CSRS pay just under
10%. FERS COLAs are also
weighted and adjusted down when the COLA exceeds 2%.
Effective immediately, OPM is accepting the current
FERS Application to Make a Deposit, SF 3108,
from employees wanting to make a FERS redeposit. Employees must indicate on
the application that the period of service was refunded and send the
completed application through your agency for certification.
Please do not submit a payment with the application.
OPM’s financial policy requires all payments be sent to OPM’s Funds
Management office. If a payment is sent to OPM before the service credit
account is established, Funds Management will not be able to identify where
to apply the payment. As soon as the Service Credit office processes the
application, a bill and instructions for making payments will be sent to the
employee. Mail the completed FERS application (SF 3108) to:
Office of Personnel Management
Retirement Operations Center
PO Box 45
Boyers, PA 16025, or fax it to 724-794-1351.
Prior to enactment of the NDAA, FERS employees who separated from
federal service and were paid a refund of their FERS retirement
deductions permanently forfeited all retirement credit for the service
covered by the refund. If the FERS refund included a refund of CSRS
deductions covering CSRS service that became subject to FERS rules,
employees permanently forfeited all retirement credit for that CSRS
service as well. If that individual returned to work for the Government
in a position covered under FERS, the employee could not repay (or
redeposit) the refunded FERS and CSRS deductions. The service covered by
the refunded deductions could not be used in determining when the
employee would become eligible to retire and it could not be used in
computing the amount of the employee’s annuity. Section 1904 of the
National Defense Authorization Act (NDAA) now permits individuals who are
subsequently reemployed to make a redeposit of the amount refunded, plus
interest, and to have credit for the service reinstated. For the purpose of
survivor annuities, redeposit may also be made by survivors.
Interest is based on the same basic rules applicable to CSRS as described
in 5 U.S.C. 8334 and 5 CFR 831.105. Interest will accrue annually on the
outstanding portion of any amount that may be redeposited and is compounded
annually, until the portion is deposited. The interest is computed from the
date the refund was paid through December 31 of the year before the one in
which the redeposit is paid in full.
Section 1904 applies to individuals who are employed under FERS on or
after October 28, 2009. Individuals retiring on or after October
28, 2009, and employed under FERS will be given the opportunity to make the
redeposit upon the adjudication of their benefit.
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