Reg Jones Expert's View

If you leave the federal government before you are eligible to retire, you may be eligible for a deferred annuity. The conditions under which you can receive that annuity are bone simple. You must have had at least five years of creditable service under either CSRS or FERS when you left, have left your retirement contributions in the fund, and be age 62.

How large an annuity you’ll receive will depend on your total years of service and your highest average salary over three consecutive years (your so-called “high-3”).

Deferred annuities are calculated using the same formula that is used for an employee. However, the “high-3” figure used will be the one in effect at the time you left the service. It will not be increased by any intervening cost-of-living-adjustments (COLAs) or by the increases in salary for the grade and step of the position you held before leaving. However, COLAs will be paid on any annuity you receive.

If you were a CSRS employee, any unused sick leave hours you had to your credit on the date you left the service won’t be included in your annuity computation. That’s a big difference in the treatment of retiring employees and deferred retirees. Retiring CSRS employees have their unused sick leave added to their years of service, thus increasing their final annuities. On the other hand, by law those covered by FERS never have unused sick leave hours included in their annuity computations.

If you are eligible for a deferred annuity, you may elect a survivor annuity. However, you won’t be eligible either to participate in the Federal Employees Health Benefits program or acquire Federal Employees’ Life Insurance coverage.

If you are eligible for a deferred annuity, call 1-888-767-6738 or write OPM, P.O. Box 45, Boyers, PA 16017-0045 and ask for OPM Form 1496A (CSRS) or RI 92-19 (FERS). Mail the completed form to OPM no sooner than two months before you reach age 62. Your deferred annuity will begin on your 62nd birthday. If you apply at a later date, your annuity will be paid retroactively to age 62.