Expert's View

Last week I explained how disability benefits are calculated for CSRS employees. This time I’ll do the same for those covered by FERS.


Before showing you how a FERS disability annuity is calculated, I need to remind you of one thing. Because FERS employees are also covered by Social Security, you’ll need to apply for a Social Security disability benefit at the same time you apply for one under FERS. If you don’t, OPM won’t accept your application. You’ll understand why that is so in a minute.

If you are under age 62 and aren’t eligible to retire voluntarily, your annuity will be calculated as follows: for the first 12 months you’ll be paid 60 percent of your high-3 minus 100 percent of any Social Security disability benefit you are entitled to. After the first 12 months you’ll be paid 40 percent of your high-3 minus 60 percent of any Social Security disability benefit you are entitled to. Note: If you had fewer than three years of creditable service, your annuity would be based on the average of the salary you received from the day you entered service until the day you separated for disability retirement.

If you retire on disability before age 62, when you finally reach that age, your disability benefit will be recomputed as if you had worked to age 62. Here’s how that works. The time you were on the disability roll will be added to your earned service and the total multiplied by 0.01 percent, unless you have 20 years of creditable service and are at least 62 years old. In that case, the multiplier is increased to 0.011. The product of that calculation will be 1) multiplied by your high-3 on the day you went on disability retirement and 2) increased by all FERS COLAs that were paid out between that date and age 62.

While you will be eligible for annual cost-of-living adjustments (COLAs), regardless of the age at which you retire on disability, you won’t be entitled to receive the special retirement supplement, which approximates the amount of Social Security benefit you earned while covered by FERS.

Next week I’ll explain what happens once you are on the disability annuity roll and what might cause your annuity being suspended.