When Congress created the Federal Employees Retirement System, it included a unique feature: the special retirement supplement.
The special retirement supplement was designed to bridge the gap between when you retire and age 62 when you first becomes eligible for a Social Security benefit. It’s based solely on your years of actual FERS service. It doesn’t include any other Social Security-covered employment, such as work in the private sector. Nor does it include active duty service in the armed forces, even if you make a deposit to get credit for that time. That’s because the SRS is paid out of Office of Personnel Management’s Civil Service Retirement and Disability Fund, not the Social Security Administration’s Old-Age and Survivors Insurance Trust Fund.
To be eligible for the SRS, you must be under age 62, eligible for an immediate annuity and retire at your minimum retirement age (MRA) with at least 30 years of service; at age 60 with at least 20 years of service; at your MRA under one of the early retirement or buyout provisions; or under one of the special provisions for law enforcement officers, firefighters, air traffic controllers or military reserve technicians.
Those who aren’t eligible for the SRS include disability retirees; anyone retiring under the MRA+10 provision; anyone who leaves government and later applies for a deferred annuity; or anyone retiring at age 62 or later.
To estimate what your SRS would be, take your Social Security benefit at age 62 provided by the Social Security Administration, divide it by 40 and multiply the product by the number of years you’ve been a FERS employee, rounded to the nearest whole number. The closer you are to retirement the more dependable the SRS estimate will be.
The SRS isn’t increased by cost-of-living adjustments. Therefore, it won’t change until it ends at age 62, when you’ll first be eligible for a COLA.
As a rule, if you have earnings from wages or self-employment that exceed the Social Security annual earnings limit, your SRS will be reduced or stopped until your earnings fall below the limit. In 2019 that limit is $17,640. If you exceed the limit, your SRS will be reduced by $1 for every $2 you earn above that amount.
Note: The earnings limit doesn’t apply to special category employees, such as law enforcement officers, firefighters or air traffic controllers who retire before reaching their MRA. If you are one of those, you’ll receive the SRS regardless of your age. While you can earn as much as you like until you reach your MRA, once you reach it, the earning limit will apply and you’ll be treated the same as any other FERS retiree.
Reg Jones was head of retirement and insurance planning at the Office of Personnel Management. Email your retirement-related questions to firstname.lastname@example.org.