Denis Rhoden
Asst't to Director of Retirees
Outlook March / April 2019
The FERS Annuity Supplement Benefit
What is the FERS Annuity Supplement?
FERS Annuity benefits are designed to supplement Social Security retirement benefits. However, FERS annuitants are not eligible to receive Social Security benefits until they reach age 62. In order to compensate annuitants who are less than 62 years old for their inability to collect Social Security benefits, the FERS Basic Benefit Plan provides a temporary annuity supplement to FERS employees who retire with unreduced annuity benefits. Deferred, disability and early MRA + 10 retirees are not eligible for the supplement.

The FERS annuity supplement is designed to approximate the monthly retirement benefit employees will receive from Social Security at age 62 for their years of service under FERS. The annuity supplement, which is subject to the Social Security earnings test, is payable until age 62, at which time Social Security retirement benefits may begin.

Who is eligible for the FERS annuity supplement?
Employees who retire voluntarily under FERS on an immediate (not deferred) annuity which is not reduced for age (as is an MRA +10 retirement). FERS employees may also be eligible for supplemental annuity once they reach their minimum retirement age (MRA) if they retired involuntarily or voluntarily because of a major reorganization or reduction in force.

Those retiring on disability, deferred retirement or an immediate MRA + 10 benefit are not eligible for the supplement

How is the amount of the FERS annuity supplement calculated?
The supplement is computed as if the retiring employee were age 62 and fully insured for a Social Security benefit when the supplement begins. By law, the U.S. Office of Personnel Management (OPM) first estimates what the employee’s full career (40 years) Social Security benefit would be. Then OPM calculates the amount of his or her civilian service under FERS (which does not include military time, even if deposit was made) and reduces the estimated full career Social Security benefit accordingly. For example, if the employee’s estimated full career Social Security benefit would be $1,000 and he or she worked 30 years under FERS, OPM would divide 30 by 40 (.75) and multiply ($1,000 x .75 = $750). The result would be the retiring employee’s special retirement supplement, prior to any reductions.

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