How FERS Disability Retirement Annuity is Computed

Oct 3, 2016

A federal employee learning how to calculate his annuity

You are eligible for Federal Disability Retirement benefits after you have 18 months of creditable service. You must also meet the requirements laid out by OPM (Office of Personnel Management). Your annuity computation is dependent upon your age and years of service at retirement.

The following applies if you’re 62 or older at retirement or you meet the service requirements for immediate voluntary retirement:
  • If you’re under the age of 62, or you are 62 with less than 20 years of creditable service, you receive one percent of your High-3 salary for each year of service.
  • If you are 62 or older and you have 20 or more years of service, you will receive 1.1 percent of your High-3 salary.

*A 0.1 percent bonus is applied when you have more than 20 years of service and you’re over the age of 62.

The computation gets a little tricky if you’re under the age of 62 and are not eligible for immediate retirement.
  • The first year, you will receive 60 percent of your High-3 salary minus 100 percent of your Social Security Disability benefits (if any). However, you are entitled to your earned annuity if it is the larger amount.
  • The second year, and every year after until age 62, you receive 40 percent of your High-3 salary. This amount is offset by 60 percent of your Social Security Disability benefits (if any). Again, you would be entitled to your earned annuity if it is the larger amount.
  • At age 62, your annuity is recomputed. The amount used represents the annuity you would’ve received had you kept working and retired on a voluntary retirement. At this point, your annuity amount is computed in the same way as if you were eligible for immediate voluntary retirement (shown above).

*Remember to apply for Social Security Disability when filing for Federal Disability Retirement, however, you don’t have to be approved.

The amount of time you receive a disability annuity increase your years of creditable service. The average salary used for computation is increased by all FERS COLA increases paid during the time you received a disability annuity.

Applying for Federal Disability Retirement can be an uncertain time. The payouts can be confusing to understand. To find out how these benefits and computations affect your specific situation, don’t hesitate to call us at 877-226-2723. Our experienced team has been helping federal workers for years. You can also fill out this inquiry form, and the consultation is always free!

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