When federal employees begin exploring their retirement options, they realize they have more questions than answers. Federal Times Retirement Columnist Reg Jones, former head of retirement and insurance programs at the Office of Personnel and Management, has heard them all.
Here are his answers to the most frequently asked retirement questions:
When can I retire?
If you are a Civilian Service Retirement System (CSRS) employee, you can retire at age 55 with 30 years of service, at age 60 with 20 or at age 62 with five.
If you are a Federal Employees Retirement System (FERS) employee, you can retire at your minimum retirement age (MRA) with 30, at age 60 with 20 or at age 62 with five.
You can also retire at your MRA with 10 years of service; however, your annuity would be reduced by 5 percent for every year you were under age 62.
How will my annuity be calculated?
If you are a CSRS employee, it will be calculated using the following formula:
■0.015 x the average of your highest three years of basic pay (your high-3) x 5 years of service, plus
■0.0175 x your high-3 x 5 years of service, plus
■0.02 x your high-3 x all remaining years and full months of service.
If you are a FERS employee, it will be calculated using the following formula:
■0.01 x your high-3 x all years and full months of service.
However, if you retire at age 62 or later with at least 20 years of service, the multiplier will be increased to 0.011.
As a retiring FERS employee, will I be eligible for the special retirement supplement?
Yes, if you retire on an immediate, unreduced annuity; however, if you retire under the MRA+10 provision, you wouldn't be entitled to the special retirement supplement.
When would I be eligible for early retirement under the Voluntary Early Retirement Authority (VERA)?
At age 50 with at least 20 years of service or at any age with 25. If you were a FERS retiree, the 5-percent-per-year age penalty would be waived; however, if you were a CSRS retiree, the reduction would be 2 percent for every year you were under age 55 (1/6 percent per month).
If I don't have the right combination of age and service, but want to leave government, would I be eligible for an annuity later on?
Yes, if you don't ask for a refund of your retirement contributions when you leave and have at least five years of service, you would be entitled to a deferred annuity at age 62; if you have at least 20 years of service, you'd be entitled to one at age 60.
If you were a FERS employee, you could also apply for a deferred annuity under the MRA+10 provision; however, as noted above, that annuity would be subject to the age penalty.
What's the difference between a postponed annuity and a deferred annuity?
A postponed annuity is one where a FERS employee resigns after meeting the age and service requirements for an annuity under the MRA+10 provision, but postpones its receipt until a later date to reduce or eliminate the 5-percent-per-year age penalty.
A deferred annuity is one where an employee resigns before meeting the age and service requirements to retire, but will be eligible for an annuity at a later date; for example, at age 62 with at least five years of service.
If I elect a survivor annuity, how much will my survivor spouse receive?
A full CSRS survivor annuity equals 55 percent of your basic annuity before any deductions are taken from it; a full FERS survivor annuity equals 50 percent.
Can I provide less than a full survivor annuity for my spouse?
You are required by law to provide a full survivor annuity unless your spouse agrees in writing to a lesser amount or none at all. As a CSRS employee whose spouse agrees to a lesser amount, it can range from a minimum of $1 a year up to a maximum of 55 percent of your unreduced annuity. As a FERS employee whose spouse agrees to a lesser amount, you only have one option: 25 percent.
Can I carry my Federal Employees Health Benefits (FEHB) and/or Federal Employees' Group Life Insurance (FEGLI) into retirement?
Yes, if you were enrolled in the FEGLI program for the five consecutive years before you retire or from your first opportunity to enroll. With one variation, the same rule applies to the FEHB program. Under FEHB, you must be enrolled in (or covered by) the program.
Will my premiums be the same as they were while I was an employee?
For FEGLI, yes. For FEHB, yes, unless you are a Postal Service retiree. Under union contracts, the Postal Service pays a higher percentage of its employees' premiums. When they retire, the subsidy is ended and they pay the same premiums as all other employees and retirees.■
Have a retirment question that Reg didn't cover? Email him at email@example.com.