Retirement & Financial Planning Report

Washington DC - Sept 2015: Members from Amtrak police, TSA and local law enforcement agencies participate in Operation RAILSAFE at Union Station. (DHS photo by Barry Bahler)

As a federal law enforcement officer or firefighter, you can retire at an earlier age than most other employees. To do that you must meet the age and service requirements and separate from a covered position. The minimum age and service requirements are age 50 with at least 20 years of covered service or any age and 25 years of covered service. Unused sick leave can’t be used to meet the minimum service requirement nor can any military service, unless you go directly from a law enforcement or firefighter position into the military and return to a covered position.

If you have completed 20 years of service under these special retirement provisions, you must be separated on the last day of the month in which you reach age 57 if you are currently occupying an LEO or firefighter position. In the public interest, an agency head may exempt an employee from mandatory separation until age 60.

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Once you’ve met the years-of-service requirement, you don’t need to stay in a covered position to retire under the special annuity computation provision. You can take a non-covered job, avoid mandatory separation, and still receive the special annuity computation for those 20 years of LEO or firefighter service.

Your annuity is calculated using a more generous formula. However, that enhanced benefit isn’t free. You have to pay for it by contributing a larger percentage of your base salary to the retirement fund than do other employees.

To estimate your FERS annuity, use the following formula: take 1.7 percent of your “high-3” average salary and multiply the result by 20 years of LEO or firefighter service. Then take 1 percent of your “high-3” and multiply it times all remaining service over 20 years. Add the two together and you have your starting annuity. (Note: The formula differs under CSRS but there are very few LEOs or firefighters under that system currently in the active workforce.)

As an added benefit, there won’t be any reduction in your annuity if you retire before the normal retirement age. You will also be eligible to receive the special retirement supplement, which approximates the amount of the Social Security benefit you earned while covered by FERS.

You will also receive annual cost-of-living adjustments (COLAs), unlike non-special category employees who must wait until age 62. However, those COLAs will not be applied to your special annuity supplement.

Note: If you had at least five years of CSRS-covered service before joining FERS, you’ll have a CSRS component in your annuity, which will be calculated according to CSRS rules for LEOs and firefighters. In other words, your “high-3” would be multiplied by 2.5 percent and the product multiplied by your years of CSRS service. Once you have met the 20-year service requirement, any unused sick leave up to the amount you had in your account on the day you transferred to FERS will be added to your earned service time and increase the dollar value of your CSRS component. However, if you retire before age 55, your CSRS component will be reduced by 2 percent for every year you are under age 55 (1/6 percent per month).

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