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Expert's View

The Special Retirement Supplement

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The special retirement supplement (SRS) is a unique feature of the Federal Employees Retirement System (FERS). If you are a FERS employee who retires on an immediate, unreduced annuity before reaching age 62, you will not only receive his basic annuity but an additional payment that represents the amount of Social Security benefit you earned while a FERS employee.

The amount of the SRS is fixed on the day it is first calculated and isn't increased by cost-of-living adjustments. And it ends when you reach age 62 and becomes eligible for a Social Security benefit.

The money to pay the SRS doesn't come from the Social Security Administration. It comes instead from the Civil Service Retirement and Disability Fund. However, like a Social Security benefit, the SRS is subject to the annual earnings limit. If after you retire you have earnings from wages or self employment that exceed the limit, your SRS will be reduced by $1 for every $2 over the limit. In 2013 that limit is $15,120.

FYI. There is an exception to that rule. If you were employed under the special provisions for law enforcement officers, firefighters and air traffic controllers and you retired before your minimum retirement age, you can earn as much as you want without your SRS being reduced. However, once you reach your MRA (which varies from 65 to 67; currently 66), you'll be subject to the earnings limit just like any other FERS retiree.

At the beginning of this article, I said that FERS employees who retire on an immediate, unreduced annuity are eligible for the SRS. That means any FERS employee who retires at age 60 with 20 years of service or at his MRA with 30 years of service. Employees who retire under the MRA+10 provision are never eligible for the SRS, neither are disability retirees nor employees who resign with at least 20 years of service and later apply for a deferred annuity at age 60.