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Federal Employees Retirement System (FERS)

Federal Employees Retirement System (FERS) . Eligibility Requirements: Min. years for Min. years for Year of Birth Minimum Age Unreduced Benefit Reduced Benefit Optional N/A 62 5 N/A

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Federal Employees Retirement System (FERS)

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  1. Federal Employees Retirement System (FERS) • Eligibility Requirements:Min. years for Min. years for Year of BirthMinimum AgeUnreduced BenefitReduced Benefit Optional N/A 62 5 N/A & N/A 60 20 N/A Deferred Before 1948 55 30 10* 1948 55 & 2 mos 30 10* 1949 55 & 4 mos 30 10* 1950 55 & 6 mos 30 10* 1951 55 & 8 mos 30 10* 1952 55 & 10 mos 30 10* 1953-1964 56 30 10* 1965 56 & 2 mos 30 10* 1966 56 & 4 mos 30 10* 1967 56 & 6 mos 30 10* 1968 56 & 8 mos 30 10* 1969 56 & 10 mos 30 10* 1970 & After 57 30 10* *Reduction is 5% for each year the employee is under age 62 (MRA + 10)

  2. Federal Employees Retirement System (FERS) • Discontinued Service Retirement: Year of BirthMinimum AgeYears N/A 50 20 N/A Any 25 The separation must be involuntary and not for misconduct of delinquency.

  3. Federal Employees Retirement System (FERS) • 3 Components of FERS Retirement Benefit: • Basic Annuity • Annuity Supplement/Social Security • Thrift Savings Plan (TSP)

  4. Federal Employees Retirement System (FERS) • Basic Annuity is based on: • Total years of service; and • The high-3 average salary

  5. Federal Employees Retirement System (FERS) • Eligibility for a Unreduced Basic Annuity: • At least 5 years of creditable civilian service; • Be subject to FERS at date of separation; and • Meet one of the age and service requirements • Employee’s meets Minimum Retirement Age (MRA) and has at least 30 years of service; or • Age 60 with 20 years of service; or • Age 62 with 5 years of service

  6. Federal Employees Retirement System (FERS) • Computing Basic Annuity: • Under Age 62 or over Age 62 with less than 20 years of service: • 1% x high-3 average salary x years & months of service • Example: • high-3 average salary = $45,000 x 1% = 450 x 19 yrs of svc = $8,550 • Age 62 with at least 20 years of service: • 1.1% x high-3 average salary x years & months of service

  7. Federal Employees Retirement System (FERS) • Annuity Supplement: • Benefit paid to employees who are entitled to an immediate unreduced, non-disability annuity prior to age 62, i.e., meets the MRA and number of years of service • The annuity supplement approximates the Social Security benefits until the annuitant reaches age 62 and Social Security benefits begin paying

  8. Federal Employees Retirement System (FERS) • Questions to ask prior to retirement: • Non-Deduction Service: • Non-deduction service performed prior to January 1, 1989, can be purchased for use in computing your retirement • Non-deduction service performed after January 1, 1989, can not be purchased and is not creditable for retirement purposes

  9. Federal Employees Retirement System (FERS) • Questions to ask prior to retirement(Continued): • Non-Deduction Service: • If an employee has a CSRS component and there was non-deduction service performed prior to becoming a FERS employee, service performed prior to 10/1/82 is creditable for length of service and also for annuity purposes whether they make a deposit or not • If an employee has a CSRS component and there was non-deduction service performed prior to becoming a FERS employee, service performed on or after 10/1/82 is creditable for length of service but a deposit must be made to capture time for annuity purposes

  10. Federal Employees Retirement System (FERS) • Refunded Service: • Service under FERS for which retirement deductions have been refunded is not included in length of service for eligibility nor annuity computation purposes • Service under a CSRS component for which retirement deductions have been refunded will be included as creditable service for both eligibility and computation, provided a redeposit has been made

  11. Federal Employees Retirement System (FERS) • Military Service: • All post-1956 military service must be covered by a deposit to receive credit under FERS rules for any purpose. • The amount of the deposit is 3% of the military basic pay earned during the period of military service plus interest

  12. Federal Employees Retirement System (FERS) • Annual Leave: • You will receive a lump sum payment for annual leave normally the 2nd pay period after you retire • Hourly rate multiplied by the number of hours of annual leave • The annual leave lump sum will be taxed when received (28%) • Sick Leave: • Unused sick leave is NOT included in service for determining eligibility for retirement • Unused sick leave disappears

  13. Federal Employees Retirement System (FERS) • Commencing Date of Annuity: • Annuities commence the first day of the month after separation from service and meeting the age and service requirement

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