Are You Eligible For A FERS Supplement ?
THE FEDERAL EMPLOYEES Retirement System annuity supplement ( SRS ) is an important benefit for FERS participants planning to retire before age 62 . The supplement bridges the time between the onset of retirement and the age you qualify for Social Security retirement .
Those who are eligible will not only receive their basic annuity but also an additional payment that represents the amount of Social Security benefit they earned while working as a FERS employee .
Since only half of all FERS employees are entitled to this benefit when they retire , a lot of questions arise about eligibility .
ARE YOU ELIGIBLE ? Some employees are immediately qualified for the FERS supplement when they retire . To be entitled to immediate and unreduced coverage , you must retire :
• at age 60 with 20 years of service ,
• at your minimum retirement age ( MRA ) with 30 years of service ,
• at your MRA , if involuntarily retiring ( for example , during a RIF ), or
• at your MRA , if retiring under the Voluntary Early Retirement Authority . Employees who retire under the MRA + 10 provision , deferred retirees , and disability retirees aren ’ t eligible for the SRS .
HOW IS THE SRS DETERMINED ? OPM has developed a simple formula you can use to get a good idea of what the dollar amount will be , which is :
Take your Social Security benefit estimate provided by the Social Security Administration , multiply it by your total years of FERS service , round it to the nearest whole number , and divide the product by 40 . The SRS is a fixed amount that ’ s determined on the day you retire . It ends when you reach age 62 and become eligible for a Social Security benefit , and it is not increased by any cost-of-living adjustments . This is true whether or not you apply for a Social Security benefit at that time .
WHO IS NOT ELIGIBLE ? If you are 62 when you retire , you will be eligible for Social Security retirement rather than the FERS supplement . Employees who resign without being old enough or having enough service to qualify for an immediate retirement are not eligible for the supplement even though they may receive a deferred retirement for a later date .
Employees who retire at their minimum retirement age with at least 10 years but less than 30 years of service — known as “ MRA + 10 ” retirement — and those retiring at age 60 or 61 with more than 10 but less than 20 years are not eligible for the supplement even though they may choose to postpone their retirement application .
Unfortunately , the government does not allow you to have the best of both worlds . There ’ s a downside for those who desire to continue to work for pay after they have retired from the federal government . Because the SRS benefit is at no cost to the employee , losing it might not be a big blow ; however , who wants to pass up the opportunity to get something for nothing ? Recognizing this benefit for what it is can take the surprise out of the equation and may sway you to work a little longer before retiring from federal service .
Kirstin Hatfield , FRC , is a Federal Retirement Consultant with Freedom Federal Educators . She earned her FRC designation and certification upon completing her training through FFEBA . She specializes in working with federal employees in the areas of FERS / CSRS retirement , TSP protection , FEGLI analysis , and Social Security benefits . Over the last 5 years , working in the retirement market Kirstin has given hundreds of clients peace of mind by educating and helping them achieve financial security in their retirement plan .
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