Under the Federal Employees Retirement System (FERS), there are four types of retirement; voluntary, early, deferred, and disability. Previous posts in the series have looked at the eligibility requirements, annuity computation, and special provisions for each. This post will focus on special deductions for each.
Non-Disability Retirement—Voluntary, Early, and Deferred
If you have 10 or more years of service and retire at the Minimum Retirement Age (MRA), your benefit will be reduced by 5/12 of 1% for each full month (5% per year) that you were under age 62 unless
- you complete at least 30 years of service,
- or if you complete at least 20 years of service and your annuity begins when you reach age 60.
If you postpone the beginning date of your annuity, the age reduction will be reduced or eliminated.
The age reduction applies to employees under both CSRS and FERS components of your annuity.
If you are married, your benefit will be reduced for a survivor benefit, unless your spouse consented to your election of less than a full survivor annuity. Electing a full survivor benefit will equal 50 percent of your benefit, and your annuity will be reduced by 10 percent. If you elect a partial survivor benefit, which equals 25 percent of your benefit, your annuity is reduced by 5 percent.
Unpaid or Refunded Service
If you have a CSRS component to your annuity, the CSRS portion will be reduced by 10 percent of any deposit owed for the CSRS non-deduction service performed before October 1, 1982, unless the deposit was made before retirement.
Your benefit may be reduced if you elected a lump sum payment equal to your retirement contributions and a reduced monthly annuity. However, only non-disability annuitants who have a life-threatening condition can elect this option.
Under a deferred retirement, you are not eligible to receive a retirement annuity supplement or continue participation in FEHB or FEGLI.
This reduction is the same as the non-disability survivor benefits.
Unpaid Service if “Earned” Annuity is Paid
If you have a CSRS component in your annuity, the CSRS portion will be reduced by 10 percent of any deposit owed for CSRS non-deduction service performed before October 1, 1982, unless the deposit was paid before retirement.
Cost of Living Adjustments
Your annuity will be increased for COLA’s if you(r):
- Are over the age of 62.
- Retired under special provisions for Air Traffic Controllers, Law Enforcement personnel, or Firefighters.
- Retired on disability, except during the first year when you are receiving 60 percent of your High-3 salary.
- Retirement included a portion computed under CSRS rules.
**FERS retirees under the age of 62 who don’t fall into one of the above categories aren’t eligible for COLA’s until 62. Also, if you’ve been receiving retirement benefits for less than a year and are eligible for COLA’s, you will get a percent of the COLA. That percentage depends on how long you were receding an annuity before the effective date of the COLA.
If you retire on a disability retirement, your annuity may be subject to social security deductions. During the first year receiving your annuity, your benefit will be reduced by 100 percent of any social security deductions. During the second year, and every year after, your benefit will be reduced by 60 percent of social security.
Harris Federal Law Firm has helped thousands of federal workers with their disability cases. If you think you may qualify, please give us a call at 877-226-2723 or fill out this INQUIRY form. We would love to schedule a FREE consultation with you and discuss the specifics of your case.