Proposed cuts to federal employee benefits and retirement are a common theme of late. One benefit that is in danger of being eliminated is the Special Retirement Supplement (SRS).
What is the SRS?
If you’re a FERS employee who plans to retire before age 62, the SRS is important. It’s especially significant for those who must retire early under special provisions that apply to certain groups of employees. Federal law enforcement officers, firefighters, air traffic controllers, and Customs and Border Protection officers are among these special groups.
Others eligible for this supplement are FERS employees who can retire on an immediate, unreduced annuity before reaching age 62. To be entitled to an immediate, unreduced annuity, you must meet one of the following retirement criteria:
- Age 60 with 20 years of service
- Retire at your Minimum Retirement Age (MRA is currently at 57 with 30 years of service)
- At MRA, if involuntarily retiring, such as during a RIF
- Retire at MRA, if retiring under the Voluntary Early Retirement Authority (VERA)
The FERS SRS is designed to “bridge the gap” until 62. It mimics the age 62 Social Security benefit but it’s computed using only civilian federal service creditable to your FERS retirement benefit. It ends when you reach age 62 and is subject to an earnings test from your MRA until the supplement runs out at 62. The earnings test can cause a reduction or elimination of the supplement.
Amount of Supplement
The amount of your SRS depends on a complicated formula. Thankfully, OPM has provided a simple formula so you can get a rough estimate.
- Take your Social Security benefit estimate provided by the Social Security Administration, multiply your total by your total years of FERS service, round to the nearest whole number, and divide the product by 40.
The amount of the SRS is a fixed amount established on the day you retire. It isn’t increased by COLA’s and it stops at 62 when you become eligible for Social Security. The money used to pay the SRS comes from the Civil Service Retirement and Disability Fund and is based solely on FERS service.
It is subject to the annual earnings limit. If you have earnings from wages or self-employment that exceed the limit, your SRS will be reduced by $1 for every $2 over that limit. The limit in 2018 is $17,040.
Exception: If you were employed under the special provision for law enforcement officers, firefighters, and air traffic controllers and you retired before your MRA, you can earn any amount without your SRS being reduced. However, once you reach your MRA, you’ll be subject to the earnings limit like other FERS retirees.
What if the SRS Were Eliminated?
If you retired before age 62, until you reached that age and start receiving Social Security, you’ll only receive your FERS annuity. The government won’t fill the income gap. This could mean taking another job or drawing from your TSP earlier than you had hoped.
For now, the SRS remains in place. It can be a huge help, financially, if you are eligible to receive it.