Expert's View

Reg Jones

Over the last four weeks I’ve been writing about employees who were retiring at the last minute, the mechanics of the retirement process, and an error in planning that could affect their whole life. Today I want to turn my attention to two other options that are available for those who want leave.

Deferred annuities
You can elect this option if you leave government before you have met the age and service requirements to retire on an immediate annuity, have at least five years of creditable civilian service, and don’t take a refund of your retirement contributions when you leave.


Under CSRS rules, you’d be eligible for a deferred annuity at age 62. Under the more flexible FERS rules, there are a range of times when you’d be eligible for an annuity: 62 with five years of creditable service, 60 with 20 and at your minimum retirement age (MRA) with 30. MRAs range between 55 and 57, depending on your year of birth; it’s currently 56.

You could also apply for a deferred annuity at your MRA with as few as 10 years of service. However, under the MRA+10 provision, you annuity would be reduced by 5 percent for every year you are under age 62 (5/12 of 1 percent per month), unless you have at least 20 years of service and your annuity begins at age 60 or later.

Deferred annuities are calculated using the standard CSRS and FERS formulas, with your years of service and high-3 being the ones you had on the day you left government. The latter is important to stress: the high-3 is not adjusted over time for pay raises, retiree COLAs or for any other reason, and thus the longer the time between your separation and the beginning of your annuity, the more your benefit will have eroded to inflation.

Under both retirement systems, you’d begin receiving annual cost-of-living adjustments (COLAs) beginning at age 62.

As a FERS deferred retiree, you wouldn’t be eligible to receive the special retirement supplement, which approximates the Social Security benefit earned while covered by FERS.

Finally, whether you are covered by CSRS nor FERS, you wouldn’t be eligible to reenroll in either the Federal Employees Health Benefits or the Federal Employees’ Group Life Insurance program.

See, Calculating a Deferred Annuity at

Postponed annuities
This is an option that is only available to FERS employees. If you retire under the MRA+10 provision of law you can postpone the receipt of your annuity to a later date to reduce or eliminate the 5 percent per year age penalty mentioned above.


Your annuity will be calculated using the standard FERS formula and be based on your years of service and high-3 on the day you retire. And that’s the amount you’ll receive when your annuity begins, minus any portion of the age penalty that remains.

If you were enrolled in the FEHB and/or FEGLI programs for the five consecutive years before you retire, you can reenroll in either or both of those programs when your annuity begins.

See, Retirement Eligibility & FERS Minimum Retirement Age (MRA) at