Expert's View

Reg Jones

Recently I heard from a supervisor that said he told an employee that any FERS employee who accepted an early out under the Voluntary Early Retirement Act before he reached his minimum retirement age wouldn’t be eligible for the special retirement supplement (SRS) when he reached his MRA. He said that he was told that by someone in the Social Security Administration. If he did hear it from that source, what he heard was absolutely wrong!

The SRS is based on the amount of Social Security benefit an employee has earned while covered by FERS. The authority for granting it is the responsibility of OPM. And the money paid out comes from the Civil Service Retirement and Disability Fund.

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The Social Security Administration’s role is limited to two things. First, to provide OPM with the benefits data needed to compute a retiree’s SRS. Second, to provide it with information about a retiree’s post-retirement earnings, which may require OPM to reduce or suspend that retiree’s SRS.

Like the Social Security benefit of anyone who hasn’t reached full Social Security retirement age, the SRS is subject to the annual Social Security earnings limit. For example, if you are retired and receiving the SRS, it would be reduced by $1 for every $2 you earned above the limit. In 2021, that limit is $26,550. Just to be clear, the earnings limit applies only to earnings from wages or self employment, not to income you receive in your annuity, from investments or from other sources of income, such as Social Security benefits or rental properties.

It’s bad enough when incorrect information gets passed around in email chains or social media. It’s worse when it comes from what people trust as an authoritative source such as a manager.

From ask.FEDweek.com: FERS Retiree Annuity Supplement
A FERS Retiree Annuity Supplement, commonly called the special retirement supplement, may be paid in addition to your FERS annuity benefits. It represents what you would receive for your FERS service from the Social Security Administration and is calculated as if you were eligible to receive SSA benefits on the day you retired. It’s designed to bridge the gap between retirement and age 62, when a retiree first becomes eligible for Social Security.

Retirees who are not eligible for the supplement include the following:
-disability retirees;
-anyone retiring under the MRA+10 provision (minimum retirement age with at least 10 years of service but fewer than 30; see table);
-anyone who is eligible for a deferred annuity; and
-anyone retiring at age 62 or later.

If you are eligible and your annuity has a Civil Service Retirement System component, you can still receive an annuity supplement. However, you must complete one full calendar year of service subject to FERS computation rules.


How to Estimate a FERS Special Retirement Supplement

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Mistaken Beliefs: Unused Sick Leave

FERS Retirement Guide 2021