Over the past three weeks, I’ve written about how CSRS, CSRS-Offset and FERS employees can find out if they are eligible to retire and how to estimate what their annuity would be. This time, I’ll do the same for employees with mixed CSRS and FERS service.
CSRS and FERS calculations are based on formulas, which I spelled out for you in earlier articles. Those formulas allow you to estimate what your annuity will be when you retire. The nearer you are to retirement, the more accurate your estimates will be. All you have to know to use those formulas are your “high-3” and your total years of service each under CSRS and FERS.
It’s a matter of calculating benefits for the two periods separately and adding them together.
Even though the annuity itself will be mixed, retirement eligibility is controlled by FERS rules. As a reminder, under FERS, you are eligible for an immediate, unreduced annuity if you meet the following age and service combinations: age 62 with 5 years of service, 60 with 20, or your minimum retirement age (MRA) with 30. (MRAs range from 55 to 57, depending on your year of birth.)
You may also retire at your MRA with more than 10 but less than 30 years of service. However, your FERS annuity portion will be reduced by 5 percent for each year (5/12 percent per month) you are under age 62.
You may also be able to retire early if you are faced by a reduction-in-force (RIF), reorganization, transfer of function or are offered an opportunity to retire under the Voluntary Early Retirement Authority (VERA). In each of these situations, the age and service requirements are lowered and you can retire as early as 50 with 20 years of service or, if you have 25 years of service, at any age.
If you are under 55 when your agency offers you an early retirement opportunity, the CSRS portion of your annuity will be reduced by 2 percent for each year (1/6 percent per month) you are under age 55. While there won’t be any reduction in the FERS portion of your annuity, you won’t receive the special retirement supplement (SRS) until you reach your MRA.
In any year in which a cost-of-living adjustment (COLA) is authorized, it will be applied to the CSRS portion of your annuity, regardless of the age at which you retire. However, as a rule, you won’t be entitled to any COLA on the FERS portion of your annuity until you reach age 62 and you won’t ever be entitled to a COLA on your special retirement supplement, which ends at age 62. However, there are exceptions to the rule, COLAs are added to both the annuities and SRSs of military reserve technicians, law enforcement officers, firefighters and air traffic controllers.