I recently wrote about some difference between being employed and retired (Your Finances after Retiring from the Federal Government). There was one difference that I touched on in my last article. It’s the special retirement supplement (SRS), which only applies to Federal Employee Retirement System (FERS) employees.
If you are a FERS employees who retires on an immediate, unreduced annuity before reaching age 62, you’ll receive an annuity based on your age and years of service and an additional payment – the SRS – that represents the amount of Social Security benefit you earned while a FERS employee.
To be entitled to an immediate, unreduced, you must retire
• at age 60 with 20 years of service,
• at your MRA with 30 years of service,
• at your MRA, if involuntarily retiring, for example during a RIF, or
• at your MRA, if retiring under the Voluntary Early Retirement Authority (VERA)
You won’t be eligible for the SRS if you leave government and later apply for a deferred retirement or are approved for disability retirement.
To estimate how much your SRS would be, you can use the following formula:
Social Security benefit x Years of FERS service / 40
The SRS is a fixed amount that’s set on the day you retire. It isn’t increased by any cost-of-living adjustments (COLAs) and it ends when you reach age 62 and become eligible for a Social Security benefit. That happens even if you don’t apply for a Social Security benefit at that time.
The money used to pay the SRS doesn’t come from the Social Security Trust Fund. Instead it comes from the Civil Service Retirement and Disability Fund and is based solely on your actual FERS service. It doesn’t include any years of active duty service in the armed forces even if you’ve paid a deposit to capture credit for that time toward your basic FERS annuity.
Like your Social Security benefit, the SRS is subject to the annual earnings limit. If you have earnings from wages or self employment that exceed the limit, your SRS will be reduced by $1 for every $2 that exceed that limit. In 2022 that limit is $19,560.
FYI: There’s an exception to the earnings limit. If you were employed under the special provision for law enforcement officers, firefighters and air traffic controllers and you retired before your minimum retirement age, you can earn as much as you want without your SRS being reduced. However, once you reach your MRA, you’ll be subject to the earnings limit just like any other FERS retiree.