Now we’ve come to the key question that’s been on your mind all along. How much money will I get when I retire? Well, it depends on which retirement system you are in, your high-3, and your years of creditable service. I’ll start by showing you how it’s done for most employees. Then I’ll do the same for special category employees.
CSRS – Regular Employees
The formula for computing a CSRS annuity is a little more complicated than the one used for FERS, but it’s simple enough that it can be done with pencil and paper or, if you want to go medium-tech, a calculator.
0.015 x your high-3 (which we talked about last week) x 5 years of service, plus
0.0175 x your high-3 x 5 years of service, plus
0.02 x your high-3 x all remaining years and full months (credited proportionately) of service.
Note: Any leftover hours of actual service can be combined with your unused sick leave hours to create additional months, where 174 hours = 1 month. Full months are credited proportionately, with any excess days dropped.
CSRS – Special Category Employees
If you are a law enforcement officer or firefighter who has at least 20 years of covered service, your annuity would be calculated as follows:
0.025 x your high-3 x 20 years of service, plus
0.02 x your high-3 x all additional years and full months of service, including sick leave, as noted above.
If you are an air traffic controller with at least 20 years of service as an ATC, you will receive 50 percent of your high-3, plus 2 percent x your high-3 x all remaining years and full months of service, including unused sick leave.
FERS
The formula for computing a FERS annuity is simple as pie:
0.01 x your high-3 x all years and full months (credited proportionately) of service, unless you have at least 20 years of service and retire at age 62 or later. In that case the multiplier is increased to 0.011.
Note: As with CSRS, any leftover hours of actual service can be combined with your unused sick leave hours to create additional months. However, if you retire before January 1, 2013, only half of your unused hours of sick leave can be used. On or after that date, you will be able to use all of them. Full months are credited proportionately, with any excess days dropped.
FERS – Special Category Employees
If you are a law enforcement officer, firefighter or air traffic controller who has at least 20 years of covered service, your annuity would be calculated as follows:
0.017 x your high-3 x 20 years of service, plus
0.01 x your high-3 x all additional years and full months of service, including sick leave, as noted above.
Special Retirement Supplement
As a FERS-covered employee who retires on an immediate annuity, you’ll have an additional benefit, one that isn’t available to CSRS-covered employees or to FERS-covered disability retirees or those who retire under the MRA+10 provision. It’s called the special retirement supplement.
The SRS approximates the Social Security benefit you earned while employed under FERS. Since the money for this benefit comes out of the Civil Service Retirement and Disability Fund, to which you and your agency made contributions, the SRS doesn’t include any other Social Security-covered employment, including military service for which you made a deposit.
To get a rough estimate of what your SRS would be, take your Social Security benefit estimate provided annually by the Social Security Administration, divide it by 40, and multiply the result by your total years of FERS service rounded up to the next higher year.
You’ll continue to receive the SRS until age 62 unless you have earnings from wages or self-employment that exceed the annual Social Security earnings test. In 2010 that limit is $14,160.
