By: Reg Jones
Two recent articles covered law enforcement and firefighter retirement benefits under FERS and under CSRS. These so-called “special category” employees have different eligibility requirements to retire, a mandatory separation requirement, and an enhanced formula used to compute your annuity – but we didn’t cover an exception to the rules when leaving the government before reaching age 50.
What I wrote was based on the standard picture of a law enforcement officer entering service, continuing in a covered position until retiring when he or she has at least 20 years of covered service and is at least age 50. I also mentioned that once you have those 20 years of covered service, you can move to a non-covered position and still retain your rights to the enhanced retirement benefit for that covered service time plus any additional benefit you earned under the standard formula afterward. All well and good.
There is an exception, however, in the less common situation where an LEO or firefighter with 20 years of service wants to leave government before they reach age 50. The big question is, will they be entitled to the enhanced annuity and, if so, when can they apply for it?
Well, the answer isn’t what you might expect. That’s because the special formula is only used to compute the annuity of an LEO or firefighter who retires on an immediate annuity. If you leave government before you are retirement-eligible and later apply for an annuity when you reach the age of eligibility given your years of service—a “deferred” annuity—your annuity will be computed using the standard formula, not the more generous one.
See also Federal Annuity Calculation for LEOs and Firefighters at ask.FEDweek.com
When you can apply for that annuity depends on your retirement system. If you were covered by CSRS, the earliest you could apply for one is age 62. If you were covered by FERS, it would depend on your minimum retirement age. MRAs range from 55 to 57, depending on your year of birth; currently it’s 56.
So, unless you are independently wealthy or moving on to a job that will make your annuity look like pocket change, it would make better sense not to leave before you’ve locked in that enhanced retirement benefit.