Last week I went over the retirement rules governing law enforcement officers and firefighters under CSRS. This time I’ll do the same for those covered by FERS.
As a law enforcement officer or firefighter covered by FERS, you can retire at an earlier age than most other employees if you meet the age and service requirements and separate from a position covered by FERS. The minimum age and service requirements are age 50 with 20 years of covered service or any age and 25 years of covered service.
Note: Unused sick leave earned under CSRS may not be used to meet the minimum service requirement nor may military service, unless you go directly from a law enforcement or firefighter position into the military on a military furlough.
As a law enforcement officer or firefighter, you are subject to mandatory separation at age 57. If you have completed 20 years of service under these special retirement provisions, you must be separated on the last day of the month in which you reach age 57, but only if you are currently occupying a law enforcement or firefighter position. In the public interest, an agency head may exempt an employee from mandatory separation until age 60.
Note: It’s important to understand that once you’ve met the years-of-service requirement, you don’t need to stay in a covered position to retire under the special annuity computation provision. You can take a non-covered job, avoid mandatory separation, and still receive the special annuity computation for those 20 years of LEO or firefighter service.
Because of your career is usually shorter than most other employees, your annuity is calculated using a more generous formula than is used for others covered by FERS. However, that enhanced benefit isn’t free. You have to pay for it by contributing 1.3 percent of your base salary to the retirement fund instead of .8 percent.
To estimate your annuity, use the following formula: take 1.7 percent of your “high-3” average salary and multiply the result by 20 years of law enforcement or firefighter service. Then take 1 percent of your “high-3” and multiply it times all remaining service over 20 years. Add the two dollar amounts together and you have your starting annuity.
As an added benefit, there won’t be any reduction in your annuity if you retire before the normal retirement age. You will also be eligible to receive the special retirement supplement, which approximates the amount of the Social Security benefit you earned while covered by FERS (but only when you reach your minimum retirement age (MRA), which ranges between 55 and 57, depending on the year you were born). And, as if that isn’t enough, you will be able to receive annual cost-of-living adjustments (COLAs), unlike non-special category employees who must wait until age 62. However, those COLAs will not be applied to your special annuity supplement.
Mixed CSRS & FERS Service Computation
>BR>If you had at least five years of CSRS-covered service before joining FERS, you’ll have a CSRS component in your annuity. That component will be calculated according to CSRS rules for LEOs and firefighters. In other words, your “high-3” would be multiplied by 2.5 percent and the product multiplied by your years of CSRS service. Once you have met the 20-year service requirement, any unused sick leave that doesn’t exceed the amount you had in your account on the day you transferred to FERS will be added to your earned service time and will increase the dollar value of your CSRS component. However, be aware that if you retire before age 55, your CSRS component will be reduced by 2 percent for every year you are under age 55 (1/6 percent per month).
One final note: If you transferred to FERS, you are permitted to begin your 20-year countdown all over again. For some of you, that could mean working into your 60s without fear of mandatory separation until that new 20-year target is reached. Hang in there!