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TSP Fund Allocation Advisory

FERS Special Supplement

Your FERS annuity supplement is paid in addition to your pension and is only available once you reach your MRA and actually retire. It ends when you reach age 62. It is also available if you retired involuntarily before attaining your (MRA) or voluntarily because of a major reorganization, or reduction in force. However, you still will not be eligible until you reach your MRA. If you receive a deferred benefit, a disability benefit or an immediate MRA+10 benefit, you will not be eligible for the annuity supplement.

If your annuity has a Civil Service Retirement System (CSRS) and a Federal Employees Retirement System (FERS) component, you can still receive an annuity supplement. However, you must have completed one full calendar year of service subject to FERS computation rules.

The payment formula is simple: Take the amount of Social Security you would receive at age 62, divide that number by 40 and then multiply that number by 30. If you Social Security Benefit at age 62 would be $1000 a month, divide 40 into that ($25.00) then multiply that by 30 ($750.00).

Like social security benefits, the FERS annuity supplement is subject to an earnings test. It is reduced if you earn more than the social security exempt amount of earnings in the immediately preceding year. The supplement is reduced by $1.00 for every $2.00 of earnings over the minimum level. It is possible that the supplement could reduce to $0.

The FERS basic benefit is not considered earnings when determining your earnings for the earnings test. Earnings for the year consist of the sum of wages for service performed in the year, plus all net earnings from self-employment for the year, minus any net loss from self-employment for the year.