I got an e-mail from one of my readers that brought me up short. He pointed out that I’ve had too little to say about the retirement benefits of FERS employees, especially those little negative features that often pass by unnoticed until after they retire. I’m writing this to rectify that oversight. Let’s start at the beginning.

Retirement eligibility
Under FERS you can retire on an immediate, unreduced annuity with 30 years of service when you reach your minimum retirement age. MRAs range between 55 and 57 depending on your year of birth. Unique to FERS is the MRA+10 provision, which allows you to retire at your minimum retirement age with as few as 10 years of service. However, if you do, your annuity will be reduced by 5 percent for every year you are under age 62 (age 60 if you have at least 20 but fewer than 30 years of service). You can reduce or eliminate that penalty by postponing the receipt of your annuity to a later date.

If you are offered a voluntary early retirement authority (VERA) opportunity by your agency, you can retire earlier than normal: age 50 with 20 years of service or at any age with 25. And, unlike, CSRS employees who will have their annuities reduced by 2 percent for every year they are under age 55, there is no age penalty under FERS.

Retirement annuity
The amount of your annuity will be based on a formula: 0.01 x your high-3 x your years of service. It’s 0.011 x your high-3 x your years of service if you have at least 20 years of service and retire at age 60 or later.

Special retirement supplement
As a FERS retiree, you’ll receive a special retirement supplement that approximates the amount of Social Security benefit you earned while covered by FERS. With certain exceptions, such as law enforcement officers, firefighters or air traffic controllers, the SRS is only paid when you reach your MRA. Note: The SRS is never payable to anyone who leaves government and later applies for a deferred annuity. Nor is it payable to disability retirees.

Cost-of-living adjustments – annuities
Unless you are a disability retiree or survivor annuitant, you won’t receive annual cost-of-living adjustments (COLAs) on your annuity until you reach age 62. Therefore, the younger you are when you retire, the longer your annuity will be stuck at the amount you were entitled to on the day you retired. When you finally receive a COLA, it will often be smaller than that for CSRS employees. While CSRS retirees receive the full COLA adjustment, FERS employees only receive that amount up to 2 percent; between 2 and 3 percent, they receive 2 percent; and above three percent, they receive that amount minus 1 percent.

Cost-of- living adjustments – special retirement supplement
The SRS is never increased by COLAs. It remains fixed at the amount you first received until age 62, when it ends and is replaced by your earned Social Security benefit. As a rule, if you have earnings from wages or self employment that exceed the annual Social Security earnings limit, your SRS will be reduced or eliminated. It can only be restored if your earnings once again fall below the annual limit. Note: If you are a special category employee who retires before your MRA, you can earn as much as you want without affecting the SRS until you reach your MRA. After that, your SRS will be subject to the annual Social Security earnings limit.