“I am retired military. Started working as a federal government employee as a GS in 2015. I don’t have too many more working years in me. If I left government service next year, what benefits am I entitled to? What does it mean to defer retirement?
A postponed retirement is one where an employee meets the age service requirements to retire but defers the receipt of his annuity to a later date. This applies to FERS employees who meet the minimum retirement age (MRA) and leave with at least 10 but fewer than 30 years of service. They postpone the receipt of their annuity to a later date to avoid the 5 percent per year reduction in their annuity for being under age 62.
A deferred annuity is one where an employee has at least 5 years of service but isn’t old enough to retire. If they leave government with at least 5 but fewer than 20 years of service and don’t ask for a refund of their retirement contributions, they can apply for a deferred retirement benefit at age 62. If they have at least 20 years of service, they can apply for a deferred retirement benefit at age 60. In either case, that annuity would be based on their years of service and high-3 on the day they left government. Any unused sick leave they had to their credit when they left would not be used in the computation of their annuity.
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Reg Jones, a charter member of the senior executive service, is the resident expert on retirement and the federal government at Federal Times. From 1979 until 1995, he served as an assistant director of the U.S. Office of Personnel Management handling recruiting and examining, white and blue collar pay, retirement, insurance and other issues. Opinions expressed are his own.