{"id":481,"date":"2025-03-16T18:32:47","date_gmt":"2025-03-16T18:32:47","guid":{"rendered":"http:\/\/www.vanessacraddock.com\/pages\/?p=481"},"modified":"2025-03-16T18:41:45","modified_gmt":"2025-03-16T18:41:45","slug":"the-federal-retirement-benefit","status":"publish","type":"post","link":"http:\/\/www.vanessacraddock.com\/pages\/?p=481","title":{"rendered":"The Federal Retirement Benefit"},"content":{"rendered":"

In our previous article, Know Your Retirement Rights<\/em><\/strong>, we explored the retirement eligibility rules for Federal employees facing possible termination. It is your responsibility to know if and when you are eligible for an immediate retirement. It is also important to know how much a Federal retirement benefit will be. This week\u2019s article explains the Federal retirement pension for CSRS and FERS.
\nFirst, the Federal pension is a monthly benefit based on the following:<\/p>\n

Total length of Federal service
\nHigh-3 average salary
\nCSRS or FERS formula<\/p><\/blockquote>\n

Total Length of Federal Service<\/strong>
\nDo you know how much total service you have? Generally, employees count their total service by starting the day they were hired and ending the date they separate. However, throughout your career, your service may be adjusted for a number of reasons, and you may have less service than you think.
\nCommon reasons service may be adjusted are: different types of appointments, breaks in service, failure to pay for deposit\/redeposit service, transfers to different Federal retirement systems, and moving to special provisions service to name a few. To verify the total years of service worked, employees need to know their retirement service computation date (RSCD). It may be different from the date you entered Federal service. When possible, verify your retirement SCD with your Human Resources department.
\nOnce you\u2019ve verified the RSCD, subtract this date from the date you are leaving Federal service to get your total service.<\/p>\n

Computing Total Length of Service<\/strong><\/p>\n\n\n\n\n\n\n
<\/td>\n\u00a0\u00a0 YEAR<\/strong><\/td>\n\u00a0\u00a0 MONTH<\/strong><\/td>\n\u00a0\u00a0\u00a0\u00a0 DAY<\/strong><\/td>\n<\/tr>\n
Separation date<\/td>\n\u00a02025<\/td>\n07<\/td>\n31<\/td>\n<\/tr>\n
RSCD<\/strong><\/td>\n-1999<\/td>\n03<\/td>\n24<\/td>\n<\/tr>\n
Total Service<\/td>\n\u00a0\u00a0 26<\/td>\n04<\/td>\n7<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

If an employee has worked long enough to be eligible to retire, unused sick leave will be credited to increase the length of service. Sick leave is converted from hours to months\/years.
\nSo, if an employee is retiring with 1100 hours of unused sick leave, the sick leave conversion chart, found at www.opm.gov<\/a> in the OPM Handbook for CSRS and FERS Retirement, Chapter 50<\/strong>, will be used to determine how many extra months and days of service will be added. Let\u2019s say you have 1100 hours of unused sick leave. 1100 hours converts to 6 months, 10 days of service. This extra service is added to the service the employee has worked to determine total service.<\/p>\n

High 3 Average Salary<\/strong><\/p>\n

The high 3 average salary is the 3 consecutive years the employee has been paid at the highest pay rates of their Federal career. During the high 3 average salary period, the types of pay that count will be:<\/p>\n

Regular pay
\nLocality adjusted pay
\nEnvironmental differential pay, if part of annual salary
\nSpecial pay rate for recruiting\/retention if in annual pay<\/p><\/blockquote>\n

The high 3 average salary will not<\/em><\/strong> include the following:<\/p>\n

Lump sum payment for accrued and accumulated annual leave
\nBonuses
\nOvertime
\nNight Differential unless Wage Grade employee
\nTravel allowances<\/p><\/blockquote>\n

Many government agencies have self-service platforms that provide employees a portal to manage their benefits and retirement information. Government Retirement Benefits (GRB), MyPay, and EPP are a few such platforms. From here you may print retirement estimates for planning purposes. To understand how OPM calculates retirement benefits, the formulas are listed below.<\/p>\n

\u00a0<\/strong>Retirement Benefit Formula<\/strong><\/p>\n

The CSRS<\/strong> formula is as follows:
\n1.50% X high-3 X total service =
\n1.75% X high-3 X total service =
\n2.00% X high-3 X total service =
\n\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Add together for total annual benefit<\/strong><\/p>\n

The FERS <\/strong>formula for employees under age 62 is as follows:
\n1% X high-3 X total service = Annual FERS benefit<\/strong><\/p>\n

The FERS<\/strong> formula for employees age 62+ with 20+ years of service is:
\n1.1% X high-3 X total service = Annual FERS benefit<\/strong><\/p>\n

If a FERS<\/strong> employee is age 62 and over with less than 20 years of service, the formula is:
\n1% X high-3 X total service = Annual FERS benefit<\/strong><\/p>\n

The FERS <\/strong>formula for employees who retire under the MRA+10 retirement will include a permanent reduction in the retirement benefit. The 1% formula will be used to calculate the earned benefit amount before OPM reduces the retirement by 5% a year for each year the employee\u2019s age is under 62.<\/p>\n

MRA + 10 Retirement Calculation: Employee age 57 + 18 years svc<\/strong><\/p>\n\n\n\n\n\n
Step 1<\/td>\n1% x $80,000 X 18 years= $14,400<\/td>\n<\/tr>\n
Step 2(5% a year X 5 yrs= 25%)<\/td>\n$14,400 X 25% = $3,600 reduction<\/td>\n<\/tr>\n
Total Benefit after reduction<\/td>\n$10,800 yearly benefit<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Employees may avoid the reduction by postponing the retirement benefit until they are older and their age and service yields the full retirement benefit.<\/p>\n

FERS Annuity Supplement<\/strong>
\nFERS employees eligible for a full, unreduced retirement may possibly qualify for an additional benefit called the FERS Annuity Supplement. This benefit, payable by OPM, is included when a FERS employee retires under age 62 with a Regular or Early retirement option. The \u201csupplement,\u201d based on the amount of the actual Social Security benefit payable at age 62, will be less<\/strong> than the Social Security benefit due at age 62. However, it supplements the FERS benefit until the retiree reaches age 62 when it will end automatically.<\/p>\n

Stay Informed:<\/strong>
\nIf you are Law Enforcement, a Firefighter, or an Air Traffic Controller, the retirement eligibility rules and formulas are different and will be covered in the next article.<\/p>\n","protected":false},"excerpt":{"rendered":"

In our previous article, Know Your Retirement Rights, we explored the retirement eligibility rules for Federal employees facing possible termination. It is your responsibility to know if and when you are eligible for an immediate retirement. It is also important … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-481","post","type-post","status-publish","format-standard","hentry","category-weekly-article"],"_links":{"self":[{"href":"http:\/\/www.vanessacraddock.com\/pages\/index.php?rest_route=\/wp\/v2\/posts\/481","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.vanessacraddock.com\/pages\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.vanessacraddock.com\/pages\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.vanessacraddock.com\/pages\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"http:\/\/www.vanessacraddock.com\/pages\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=481"}],"version-history":[{"count":1,"href":"http:\/\/www.vanessacraddock.com\/pages\/index.php?rest_route=\/wp\/v2\/posts\/481\/revisions"}],"predecessor-version":[{"id":482,"href":"http:\/\/www.vanessacraddock.com\/pages\/index.php?rest_route=\/wp\/v2\/posts\/481\/revisions\/482"}],"wp:attachment":[{"href":"http:\/\/www.vanessacraddock.com\/pages\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=481"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.vanessacraddock.com\/pages\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=481"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.vanessacraddock.com\/pages\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=481"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}