FERS Annuity Supplement

• Eligibility for the Annuity Supplement
• Computation of Annuity Supplement
• Changes in the Amount of the Supplement
• Minimum Level of Earnings
• Definition of Earnings

The FERS annuity 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:

• The last day of the month before the first month for which you would be entitled to actual social security benefits, or
• The last day of the month in which you reach age 62.

Eligibility for the Annuity Supplement

If you retire voluntarily on an immediate annuity which is not reduced for age, you may be eligible for the annuity supplement, in addition to your regular monthly FERS benefit.  You may also receive the 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 will not be eligible for the annuity supplement until you reach your Minimum Retirement Age (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.

Computation of Annuity Supplement

The FERS annuity supplement is computed as if you were age 62 and fully insured for a social security benefit when the supplement begins.  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 FERS annuity supplement, prior to any reductions.

Changes in the Amount of the Supplement

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.  However, the 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, once you begin receiving the annuity supplement.

Minimum Level of Earnings

The amount you may earn without affecting your FERS annuity supplement is determined by the Social Security Administration each year.  It increases with the annual increases in average wages for the national workforce.

Definition of Earnings

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.