Benefit Adjustments
Will my benefit increase as the cost of living goes up?
Yes. Cost-of-Living Adjustments are effective each December first. The adjustment
appears in your January payment on the first business day of the month,
which is when your benefit for December is paid. Federal Employees Retirement
System (FERS) and FERS Special Cost-of-Living Adjustments are not provided
until age 62, except for disability, survivor benefits, and other special
provision retirements. Also, under FERS, if you have a CSRS component,
the component is subject to the CSRS COLA.
Read about Cost-of-Living Adjustments for those who receive benefits under the Civil Service Retirement System, Organization and Disability Retirement System (ORDS), the Federal Employees Retirement System (FERS), or FERS Special.
How is the amount of each Cost-of-Living Adjustment determined?
The U.S. Department of Labor calculates the change in the Consumer Price Index
(CPI) for urban wage earners and clerical workers from the third quarter average
of the previous year to the third quarter average for the current year.
For Civil Service Retirement System (CSRS) or Organization and Disability Retirement
System (ORDS) benefits, the increase percentage is applied to your monthly benefit
amount before any deductions, and is rounded down to the next whole dollar.
For Federal Employees Retirement System (FERS) or FERS Special benefits, if
the increase in the CPI is 2 percent or less, the Cost-of-Living Adjustment
is equal to the CPI increase. If the CPI increase is more than 2 percent
but no more than 3 percent, the Cost-of-Living Adjustment is 2 percent.
If the CPI increase is more than 3 percent, the adjustment is 1 percent
less than the CPI increase. The new amount is rounded down to the next
whole dollar.
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I have military service after 1956. Will I continue to receive credit for the service after I become eligible for Social Security?
When you become eligible for Social Security, your military service after 1956
will be used in the computation of your Social Security. Unless you paid a deposit,
prior to retirement, for your military service after 1956, it will no longer
count toward your retirement benefit. However, if you did pay the deposit, no
adjustment to your retirement benefit is made at age 62.
I am receiving Civil Service Retirement System (CSRS) offset benefits. What will happen to my benefit when I become eligible for Social Security?
If at age 62 you are eligible for Social Security, we will recompute your retirement
benefit to "offset" any part of your Social Security benefit that is
based on your years of Federal service under the offset plan.
I am receiving a Federal Employees Retirement System (FERS) disability benefit. Will my benefit ever change?
If you were under 62 when your disability benefit began, and were not eligible
for a voluntary immediate benefit, your benefit will be recomputed after you
have been retired for 12 months. The recomputed annuity will be 40 percent of
your high-3 average salary minus 60 percent of your monthly Social Security
benefit, or your earned benefit, whichever is higher.
At age 62, your benefit is recomputed as though you had continued working until
age 62. (Your average salary is increased by all FERS Cost-of-Living Adjustments
paid while you were disabled.)
I am receiving a disability benefit. Can my benefit be stopped?
Yes. If you are under age 60, your benefit will stop if:
- you are found to be medically recovered from your disabling condition;
- in any calendar year your income from wages and self-employment is at least 80 percent of the current rate of basic pay from the position you retired from (This is also known as a restoration to earning capacity.); or
- you are reemployed in the Federal service in a position equivalent to what you held at retirement. (This is called administratively recovered.)
If my disability benefit stops, can it ever be reinstated?
Yes. If your disability benefit stopped because you were found recovered either
medically or administratively, your benefit can resume only if the disability
recurs and you do not exceed the 80 percent earnings limitation. If your disability
benefit stopped merely because you exceeded the earnings limitation, your benefit
can resume effective the first of the year after you no longer exceed the 80
percent earnings limit.
What happens to my life insurance when I turn 65?
If you retired before December 9, 1980, your Basic life insurance will begin
to reduce by 2 percent of the face value each month beginning with the second
month after your 65th birthday or your retirement date, whichever is later.
This reduction continues until your Basic life insurance reaches 25 percent
of the face value. This coverage is free.
If you retired on or after December 9, 1980, and before January 1, 1990, you
elected one of the following reduction schedules for your Basic life insurance:
75 percent reduction - If you elected this reduction schedule, your Basic life insurance will begin to reduce by 2 percent of the face value each month beginning with the second month after your 65th birthday or your retirement date, whichever is later. This reduction continues until your Basic life insurance reaches 25 percent of the face value. This coverage is free.
50 percent reduction - If you elected this reduction schedule, your Basic life insurance will begin to reduce by 1 percent of the face value each month beginning with the second month after your 65th birthday or your retirement date, whichever is later. This reduction continues until your Basic life insurance reaches 50 percent of the face value. We withhold premiums for this coverage from your annuity beginning at retirement and continuing for life.
No Reduction - If you elected this reduction schedule, the full amount of your Basic life insurance remains in force after you reach age 65. We withhold premiums for this additional coverage from your annuity beginning at retirement and continuing for life.
If you retire after December 31, 1989, you must elect one of the three reduction
schedules described above when you retire. Regardless of which reduction schedule
you elect, if you separate before age 65, until you are 65 you must also pay
the same premium as employees for the Basic life insurance you continue into
retirement.
The amount of Option A - Standard insurance (formerly known as "Optional
insurance") is $10,000 at retirement. If you retired before October 30,
1998, your Option A insurance may have been higher than $10,000. If you have
this coverage, it will begin to reduce by 2 percent per month or $200, beginning
the second month after your 65th birthday or your retirement date, whichever
is later, until it reaches 25 percent of the face value or $2,500. We will withhold
premiums for Option A insurance from your annuity through the end of the month
in which you are 65, unless you elect to cancel this coverage.
All annuitants with Option B - Additional insurance as of April 24, 1999, or
later, are eligible to make an Option B reduction election. Those who are 65
or older at retirement will hear from us shortly after retirement. We will contact
annuitants who retired before age 65 shortly before their 65th birthday. At
that time, the annuitant may elect either Full Reduction or No Reduction for
each separate multiple of Option B. For example, a person with five multiples
may elect No Reduction on two multiples, while the three remaining multiples
reduce fully.
If you elect Full Reduction, effective the first day of the second month after
your 65th birthday or your retirement date, whichever is later, your Option
B full-reduction multiples will reduce by 2 percent of the face value per month
for 50 months, at which time this coverage will end. We will withhold premiums
for this coverage from your annuity through the month in which you reach age
65. If you elect to continue some or all of your Option B multiples with No
Reduction, when you are 65 or at retirement, whichever is later, we will adjust
the withholding for your Option B coverage to reflect the number of multiples
you decided to retain at No Reduction. Any other multiples will start to reduce
as described above.
All annuitants who have Option C - Family insurance, and whose annuity commencing
dates are April 24, 1999, or later, are eligible to make an Option C reduction
election. Those who are 65 or older at retirement will hear from us shortly
after retirement. We will contact annuitants who retired before age 65 shortly
before their 65th birthday. At that time, the annuitant may elect either Full
Reduction or No Reduction for each separate multiple of Option C. For example,
a person with five multiples may elect No Reduction on two multiples, while
the three remaining multiples reduce fully.
If you elect Full Reduction, or if you separated for retirement before April
24, 1999, effective the first day of the second month after you reach age 65
or your retirement date, whichever is later, your Option C full-reduction multiples
will reduce by 2 percent of the face value per month for 50 months, at which
time this coverage will end. We will withhold premiums for this coverage from
your annuity through the month in which you reach age 65. If you elect to continue
some or all of your Option C multiples with No Reduction we will adjust the
withholding for your Option C coverage to reflect the number of multiples you
decided to retain at No Reduction. Any other multiples will start to reduce
as described above.
For more complete information about life insurance coverage as an annuitant,
please check the life insurance
pamphlet, Information for Retirees and Their Families: Federal Employees
Group Life Insurance, RI 76-12.
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What happens to my retirement benefit if I go back to work for the government?
Generally, if you are receiving a regular retirement, it will continue and
your salary will be equivalently reduced. But, if you retired for disability
or because your job was eliminated, your eligibility for the retirement benefit
might end. You can discuss this with your prospective employer or provide us
with detailed information about the position so that we can let you know if
your benefit would stop. We need to know the title, grade, salary, tour of duty,
and retirement coverage provided by the position you are considering.
If your retirement benefit ends, your health benefits coverage as a retiree
stops as well. You can enroll for health benefits where you are employed. Your
life insurance as a retiree stops without a right to convert to an individual
policy. Your eligibility for life insurance coverage will be the same as any
other new employee.
Special Reemployment Provisions of PL 111-84 (The National Defense Authorization Act) Public Law 111-84, approved on October 28, 2009, allows reemployment of CSRS and FERS annuitants on a limited basis with receipt of both annuity and salary. This provision applies to Executive agencies (excluding the Department of Defense and GAO), the Postal Service, and the Judicial and Legislative Branch agencies.
This authority may be used by agencies when they determine that it is necessary to-
- Fulfill functions critical to the mission of the agency, or any component of that agency;
- Assist in the Implementation of oversight of the American Recovery and Reinvestment Act of 2009 or the Troubled Asset Relief Program under title I of the Emergency Economic Stabilization Act of 2008.
- Assist in the development, management, or oversight of agency procurement actions;
- Assist the Inspector General for the agency in the performance of the mission of the Inspector General;
- Promote appropriate training or mentoring programs of employees;
- Assist in the recruitment or retention of employees; or
- Respond to an emergency involving a direct threat to life or property or other unusual circumstances.
Individuals reemployed under this provision, serve under appointments limited to a year or less. An annuitant may not serve under this provision for more than 520 hours of service during the period ending 6 months following the individual's annuity commencing date; for more than 1040 hours of service during any 12-month period; or for more than a total of 3120 hours. Individuals employed under these provisions are not entitled to any additional annuity benefits based upon that employment.
This provision expires on October 27, 2014.
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