Expert's View

If any of you FERS employees have taken the time to calculate what your annuity will be when you retire, you know that it ain’t going to be much. That’s because your annuity is composed of three parts: a defined benefit (your annuity), Social Security, and the Thrift Savings Plan. However, since you aren’t eligible for a Social Security benefit until age 62, if you retire before that age you’ll need something to bridge the gap. That’s the special retirement supplement.

If you meet the criteria spelled out below, you will receive an SRS that approximates the Social Security benefit you’ve earned while employed under FERS. The SRS is paid out of the civil service retirement fund and will continue to be paid until you either reach age 62 or your outside earnings exceed the annual Social Security earnings limitation. I’ll get back to that in a minute.

To be eligible for the SRS, you have to retire:

  • at your minimum retirement age (MRA) with at least 30 years of service;

  • at age 60 with at least 20 years of service;

  • at your MRA under one of the early retirement provisions, whether your retirement is voluntary or involuntary; or

  • under the special provisions for law enforcement officers, firefighters, air traffic controllers, or military reserve technicians who lose their military status due to medical reasons.

Those who don’t qualify for the SRS include:

  • disability retirees;

  • anyone retiring under the MRA+10 provision;

  • anyone who is eligible only for a deferred annuity; and

  • anyone retiring at age 62 or later.

To get a rough estimate of what your SRS would be, take your annual estimated Social Security benefit at age 62 (provided by the Social Security Administration), divide it by 40, and multiply the product by the years you’ve been employed under FERS, rounded up to next full year. For example, if your estimated annual Social Security benefit at age 62 is $26,000 and you have 20 years of FERS service, your SRS will be $13,000 ($26,000 ÷ 40 x 20). Note: The only years that count when doing this calculation are those when you were covered by FERS. They don’t include periods of military service for which you paid a deposit, time spent under CSRS, or Social Security credits earned somewhere else.

Now that I’ve given you the good news, let me give you some bad news. First, with the exception of special category retirees, such as law enforcement officer, firefighter or air traffic controller, and disability retirees and survivors, your annuity won’t be increased by cost-of-living adjustments until you reach age 62. And your SRS won’t be increased by COLAs at all, regardless of what kind of retiree you are.

Second, for most retirees, if your earnings from wages or self-employment exceed the Social Security annual earnings limit, your SRS will be reduced or eliminated. This isn’t true if you are a special category employee. If you are one of these, you may earn as much as you want until you reach your MRA, after which you’ll be treated the same as all other retirees.