FERS Annuity Supplement: The Special Retirement Supplement (SRS)

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This information is garnered from the OPM site at: https://www.opm.gov/retirement-services/publications-forms/csrsfers-handbook/c051.pdf

III. Annuity Supplement The special retirement supplement is paid in addition to gross monthly Federal Employees Retirement System (FERS) annuity benefits. It represents what you would receive for your FERS civilian service from the Social Security Administration (SSA) and is calculated as if you were eligible to receive SSA benefits on the day you retired. Eligibility for the annuity supplement continues until the earlier of (1) the last day of the month before the first month for which you would be entitled to actual Social Security benefits or (2) the last day of the month in which you reach age 62. Eligibility for Annuity Supplement If you retired voluntarily on an immediate annuity which is not reduced for age, you may be receiving a special retirement supplement which adds to your monthly benefit. You may also be receiving this supplement if you retired involuntarily before attaining your Minimum Retirement Age (MRA) or voluntarily because of a major reorganization, reduction in force, or an early retirement for Members of Congress. However, in these three instances, you were not eligible for the special retirement supplement until you reached your Minimum Retirement Age (MRA). If you are receiving a deferred benefit, a disability benefit or an immediate MRA+10 benefit, you are not eligible for a special retirement 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 complete 1 full calendar year of service subject to FERS computation rules. One full calendar year means any year which begins January 1 and ends December 31.

Computation of Annuity Supplement

The supplement is computed as if you were age 62 and fully insured for a Social Security benefit when the supplement begins. By law, the Office of Personnel Management (OPM) first estimates what your full career (40 years) Social Security benefit would be. Then we calculate the amount of your civilian service under FERS and reduce the estimated full career social security benefit accordingly. For example, if your estimated full career Social Security benefit would be $1,000 and you had worked 30 years under FERS, we would divide 30 by 40 (.75) and multiply ($1,000 x .75 = $750). The result would be your special retirement supplement, prior to any reductions. Changes in the Amount of the Supplement Like Social Security benefits, your retirement supplement is subject to an earnings test. It is reduced if you earn more than the exempt amount of earnings (called the minimum level of earnings) in the immediately preceding year. Your supplement is reduced by $1.00 for every $2.00 of earnings over the minimum level. It is possible that your supplement could reduce to $0. However, your FERS basic benefit will not be reduced. If you are receiving a supplement, you must report your earnings to OPM. You will receive instructions on how to report your earnings when it is required. There is no reduction until after the first calendar year you receive the special retirement supplement. Then, your earnings during that first calendar year are compared to the Social Security minimum level of earnings for the same year. Your monthly annuity supplement in the second calendar year is then reduced by 1/12 of the excess earnings. Excess earnings are 50% of the amount by which your earnings exceed the Social Security minimum. Minimum Level of Earnings The amount you may earn without affecting your special retirement supplement is determined by the Social Security Administration each year. It will increase with the annual increases in average wages for the national workforce. You can obtain the current year amount at www.ssa.gov/pubs/10003.html . Definition of Earnings Your Federal Employees Retirement System (FERS) basic benefit is not considered earnings. Your earnings for any year will 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.

This information is garnered from the OPM site at: https://www.opm.gov/retirement-services/publications-forms/csrsfers-handbook/c051.pdf and is accurate on August 2018.