FERS employees who want to retire but aren’t eligible for an immediate unreduced annuity under standard age and years of service combinations have an additional option available to them,“the MRA+10″ provision—but which carries some special considerations.
Under MRA+10, FERS employees who have reached their minimum retirement age can retire when they have at least 10 years of service but fewer than 30. If you were born before 1948, your MRA is 55. It increases by two months each year from 1948 through 1952. Then it stays at 56 years from 1953 through 1964; since anyone born in 1952 or earlier already is past that age, effectively the MRA is 56 for anyone born before 1965. For those born in 1965 and later, it once again will increase (starting in 2021) by 2 months per year until it reaches a maximum of 57 years for those born in 1970 and later.
As far as those 10 years of service are concerned, they can be any combination of creditable service, from years employed under CSRS and FERS to any other kind of service for which you’ve paid a deposit. The prime example of the latter is active duty service in the military.
While it’s a real plus to be able to retire with less than 30 years of service, there is a downside. If you retire under the MRA+10 provision, your annuity will be reduced by 5 percent for every year you are under age 62. That’s 5/12ths of a percent per month. However, you can reduce or eliminate that reduction by postponing the receipt of your annuity until a later date. And if you have at least 20 years of service, you can begin receiving a penalty-free annuity at age 60.
As a MRA+10 retiree, your annuity will be calculated using the standard formula: .01 x your high-3 x your years and full months of service. Your high-3 and length of service will be the ones you had on the day you retire. However, as noted above, there can be a reduction depending on at what age your annuity begins.
No matter when you begin receiving your annuity, you won’t be eligible for the special retirement supplement, which approximates the amount of Social Security benefit you earned while employed under by FERS. And like most other FERS retirees, you won’t be eligible for a cost-of-living increase until you reach age 62.
If you have been covered by the Federal Employees Health Benefits and/or Federal Employees’ Group Life Insurance coverage for the five consecutive years before you retire, you can continue that coverage without a break if you begin your annuity immediately. On the other hand, if you postpone the receipt of your annuity, that coverage will end after 31 days of premium-free coverage; however, when you begin receiving your annuity, you’ll be able to reenroll in either or both of those programs.