As the federal workforce continues to age, more employees should be eligible to retire. There is also much discussion of reductions in the federal workforce with a new administration and a new Congress taking office in January 2025. It is therefore important to review the various retirement options available to federal employees covered by the Federal Employee Retirement System (FERS).
The five types of retirements available to FERS employees are: (1) Immediate voluntary/optional (reduced and unreduced); (2) Special Provisions; (3) Early; (4) Disability; (5) Deferred; and (6) “MRA + 10” and “MRA + 20” postponed. This column will present the immediate voluntary/optional retirement option.
SEE ALSO: Understanding the FERS Retirement Options
A FERS employee must meet minimum age and service requirements in order to immediately retire from federal service. Immediately retire means that the retired employee will receive the first of lifetime FERS monthly annuity checks one to two months after the day the employee officially retires. The following table summarizes a FERS employee’s minimum age and service requirements to retire immediately:
*Minimum Retirement Age (MRA) for FERS employees is based on their year of birth, as shown in the following table:
The following is a discussion of the minimum age and minimum service requirements for voluntary/optional (reduced and unreduced) retirement:
1. Minimum age. A retiring FERS employee must have reached the minimum age (MRA) as of the day the employee intends to retire. This is MRA (minimum 30 years of service), age 60 (minimum 20 years of service) or age 62 (minimum five of years of service).
2. Minimum service. An employee must have at least five years of creditable service to be eligible for voluntary retirement.
Creditable civilian service for this purpose includes: (1) Service for which full FERS deductions are withheld each pay period from an employee’s bi-weekly salary; (2) “Non-deduction service” – temporary or intermittent service – performed prior to January 1, 1989 – if a full deposit for such service is made; (3) Full-time service as a volunteer or volunteer leader with the Peace Corps or VISTA performed at any time prior to separation from federal service, if a deposit has been made for the service; (4) Service for which full Social Security taxes and full or reduced CSRS deductions were taken, even if CSRS deductions were refunded and not redeposited; or (5) If any employee has the minimum five years of creditable civilian service, then creditable military service may be used to meet the balance of years of service necessary for a volunteer retirement. Note that FERS post-1956 military service cannot be used to meet the service requirement unless the employee makes a full deposit before retirement.
Note that Public Law 104-208 allows FERS employees who are involuntarily separated the right to use their unused annual leave hours to achieve initial eligibility for retirement and/or continued FEHB health benefits coverage for retirement.
Retirement Annuity Supplement
For those FERS employees who retire before age 62 under a voluntary/optional (unreduced FERS annuity) retirement, the FERS Retiree Annuity Supplement will be automatically paid to the FERS annuitant until the month before the annuitant’s 62nd birthday. The Retiree Annuity Supplement is paid in addition to the FERS annuity.
“MRA + 10” and “MRA + 20” Immediate Retirement (Reduced)
FERS employees who have reached their MRA with between 10 and 29 years of FERS service and at least five years of creditable FERS service can retire immediately. However, their FERS annuity will be permanently reduced as a result of retiring before age 62. These retirees are not eligible for the FERS Retiree Annuity Supplement. Additional information about the “MRA + 10” and “MRA + 20” immediate, and “postponed” retirement will be presented in an upcoming MFR column.
Applying for Immediate (Voluntary) Retirement
FERS employees who meet the minimum age and minimum service requirements to voluntarily retire must complete the following forms:
• Form SF 3107 (Application for Retirement, and Schedules A, B and C), and
• Form SF 3107-2 (Spouse’s Consent to Survivor Election), if applicable.
Edward A. Zurndorfer is a CERTIFIED FINANCIAL PLANNER®, Chartered Life Underwriter, Chartered Financial Consultant, Registered Health Underwriter and Enrolled Agent in Silver Spring, MD. Tax planning, Federal employee benefits, retirement and insurance consulting services offered through EZ Accounting and Financial Services, located at 833 Bromley Street Suite A, Silver Spring, MD 20902-3019