Most employees retire when they’ve reached the standard age and service requirements to receive an immediate unreduced annuity. If you are a CSRS employee, those are age 62 with 5 years of service, 60 with 20 or 55 with 30. If you are a FERS employee, they are 62 with 5, 60 with 20 or at their minimum retirement age (MRA) with 30. FERS also has a unique feature that allows you to retire at your MRA with as few as 10 years of service. However, there’s a hitch. If you retire under the MRA+10 provision, your annuity will be reduced by 5 percent per year for every year (5/12ths of 1 percent per month) that you are under age 62.

Postponed annuity

If you retire under the MRA+10 provision but postpone the receipt of your annuity, you can reduce or eliminate the age penalty by holding off applying for it until a later date. The longer you delay, the smaller the impact will be. Even if you are under age 62 when you apply for your annuity, you’ll be entitled to receive the special retirement supplement, which approximates the amount of Social Security benefit you earned while you were a FERS employee.

If you are eligible to carry your Federal Employees Health Benefits of Federal Employees’ Group Life Insurance into retirement, those benefits will end after a 31-day free extension of coverage; however, you may re-enroll in either or both when your annuity begins. Note: Under the Temporary Continuation of Coverage (TCC) provision, you can continue your FEHB coverage for up to 18 months by paying the full cost of that benefit plus 2 percent to cover administrative expenses.

In addition, any unused hours of sick leave you had to your credit when you retired will be restored and included in the computation of your annuity.

Deferred annuity

Here’s the good news. You’ll be entitled to a deferred annuity if you resign from the government before you are old enough to retire, have at least 5 years of service, and don’t ask for a refund of your retirement contributions. If you were covered by FERS, you can apply for that annuity when you have one of the age and service combinations mentioned in this column’s first paragraph. However, if you were covered by CSRS, you’ll only be eligible for that benefit at age 62.

Now here’s the bad news. First, any unused sick leave you had to your credit when you left government won’t be used in the computation of your annuity. Second, regardless of how many years you were enrolled in the FEHB or FEGLI programs, you won’t be able to re-enroll in either one when your annuity begins. Third, if you are covered by FERS and under age 62 when you apply for your annuity, you won’t receive the special retirement supplement.

Reg Jones, a charter member of the senior executive service, is our resident expert on retirement and the federal government. From 1979 to '95, he served as an assistant director of the Office of Personnel Management handling recruiting and examining, white and blue collar pay, retirement, insurance and other issues. Opinions expressed are his own.

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