Expert's View

Over the past two weeks, I’ve described the criteria that must be met to be approved for disability retirement and the application process used. This week and next I’ll explain how those disability benefits are calculated under the two retirement systems. I’ll begin with CSRS. 


Under CSRS the annuity you receive will be the higher of your earned annuity or a guaranteed minimum annuity. An earned annuity is based on your high-3 and total years of creditable service. It’s calculated using the standard formula:

• 0.015 x your highest three years of average salary (your high-3) x your first five years of creditable service, plus

• 0.0175 x your high-3 x your next five years of creditable service, plus

• 0.02 x your high-3 x all remaining years and full months of creditable service

Note: Your disability benefit will be the same as your earned benefit if you have 22 years or more of creditable service or you are at least 60 years old.

On the other hand, the guaranteed minimum is the lower of the following two numbers: 40 percent of your high-3 or the annuity you would have earned if you worked to age 60. As a rule, if you are receiving military retired pay or compensation from the Department of Veterans Affairs in lieu of such pay, your disability annuity will be based on your earned benefit. However, if the total of that benefit plus your military benefit is less than the guaranteed minimum benefit, you’ll be paid whatever amount is necessary to bring you up to the minimum.

Note: If you are a CSRS Offset employee who retires on disability, and you are eligible for a Social Security benefit, your disability annuity will be offset by the amount of that Social Security benefit. The total amount you receive will be the same, but it will just come from two different places, OPM and the Social Security Administration. 

Here’s some good news for CSRS and CSRS Offset employees. Regardless of the age at which you retire on disability, you will be eligible for annual cost-of-living adjustments. These COLAs will be the same as those given to regular CSRS retirees.

Next week I’ll explain how a FERS disability annuity is calculated.