FERS Annuity FAQs
The Federal Employee Retirement System, or FERS, is a retirement plan that consists of a pension, Social Security, and individual savings. FERS was launched in 1986 and replaced the Civil Service Retirement System or CSRS. The pension consists of the FERS basic benefit and for some retirees, the FERS supplement, and individual savings are contributed to the Thrift Savings Plan (TSP). Federal government employees under the FERS system also contribute to Social Security, which is a change from the old CSRS system. For those retirees with substantial creditable service, between the FERS basic benefit and Social Security, retirement income can be substantial, particularly when compared to the private sector where pensions are rare.
FERS eligibility is based on your age and years of creditable service. Age comes into play in the form of MRA, or Minimum Retirement Age. MRA varies between 55 and 57 and is based on when you were born. If you retire before your MRA, you typically won't be eligible to begin FERS. There is also a service requirement as well, and that varies anywhere from 5 years if you're retiring at age 62 or later to 30 years if you're retiring at a much younger age. If you don't meet the age or service requirements, deferred retirement might be an option. With this option, you can still retire early, but defer payments until you qualify for the full amount. Lastly, the government may offer early retirement in which these requirements can be waived. The requirements may also be waived if you are deemed to be disabled, in which case you might be able to take a disability retirement as long as you have 18 months of service.
SF-3107 - the Application for Immediate Retirement - is the form you'll need to submit to apply for retirement. Once you do that, your personnel office will begin the process of preparing all relevant paperwork, including a form they'll send to you to verify your federal service. Ideally, you'll have confirmed this information is correct prior to requesting retirement so neither the federal service used to calculate your FERS benefit nor the benefit amount itself will be a surprise to you. If you are retiring early and are eligible for the FERS supplement, make sure you know what the amount of that benefit will be as well.
The FERS retirement calculation is based on your creditable service and your high-3 salary. Those two factors are multiplied by a factor that varies from 1% to 1.7%, and which factor you use depends on your creditable service and age at retirement, as well as which agency you worked for within the Federal Government. The largest group of employees who qualify for a higher factor are Special Provision employees. Even if you aren't a special provision employee, you can use a factor of 1.1% as opposed to 1% if you retire at age 62 or later and have 20 years or more creditable service. You can find more detailed information on the calculation in the post above.
The amount FERS retirement pays is based on the factors listed above. While it will be substantially less than the highest annual salary you earned while working, you'll also very likely have Social Security for income in retirement along with any savings you were able to put away in the Thrift Savings Plan.
The number of years you have to work to qualify for the FERS basic benefit varies, but the absolute minimum number of years is 5 and that is only applicable if you are retiring at age 62 or later. At the other end of the spectrum, if you're retiring a good deal earlier than age 62, you might need as much as 30 years of service to begin drawing your annuity immediately upon retirement.