MRA+10 FERS Retirement

“Firstly, you are a GREAT information source regarding FERS retirees-to-be ! THANK YOU!!! Does “MRA plus 10” apply to my situation?, and if so, what would be my monthly Pension amount be if I put in for my Retirement now at my current age of 60? I was one of the “ORIGINAL” FERS Employees, starting on February 6, 1984. I worked until April 17, 2001, with a High-3 of approximately $100,000 (at GS-13, Step 10 for each of my final 6 years, before resigning from Federal service at age 42 years old). With a BirthDate of December __, 1958, my MRA is listed at age 56. I am now 60 years old. Can I receive the reduced Retirement (reduced at a rate of 5/12 of 1% per month for every month before age 62) NOW, or do I have to wait until I turn 62 years old to receive Retirement benefits? -John

It can be really confusing to understand your years of credible service, minimum retirement age and what types of unreduced annuities that you are eligible for.

Immediate Retirement Eligibility Requirements for FERS

In order to apply for an immediate unreduced annuity (pension) under the Federal Employee Retirement System (FERS) you have to pass through one of these three gates:

• Minimum Retirement Age (MRA) with 30 years of Federal Services,
• Age 60 with at least 20 years of Federal Service or,
• Age 62 and 5 years of Federal Service.

In John’s case, he was hired in 1984 and was one of the very first employees under the new retirement system, FERS. Remember, before FERS – there was the Civil Service Retirement System (CSRS). CSRS did not pay into social security and had a different set of retirement qualifications and benefits. John did not stay with Federal Service until he was in his 60’s but instead, left at age 42. However, he had worked his way up the GS ladder; a GS-13, Step 10 and had 10 years of Federal Service under his belt. During that 10 year period, he paid into the Federal Employee Retirement System (FERS). Is he eligible for an MRA+10 retirement?

MRA+10 FERS Retirement Eligibility Requirements

Your Minimum Retirement Age (MRA) is based on your date of birth, for FERS. Here is how to find your MRA under FERS:

Once you have reached your MRA you have to have credible years of service in order to apply for a postponed, deferred or immediate retirement.

If you retire at MRA +10 you can receive some of your FERS Annuity (pension) however it will be reduced. An MRA +10 retirement from FERS imposes a reduction equal to five percent per year (or 5/12 of one percent per month). However, you can avoid having your FERS Annuity reduced, let’s discuss this more.

With 17 years of service, does John qualify for an MRA+10 Retirement?

Even though John has 17 years of Federal Service, he did not reach his Minimum Retirement Age (MRA) before leaving Federal Service. John, you have to meet your MRA and have 10 years of Federal Service to qualify for an MRA +10 retirement. To avoid a reduction in your FERS Pension, you can postpone payment of your retirement benefits until you meet one of the qualifications we mentioned:

• Minimum Retirement Age (MRA) with 30 years of Federal Services,
• Age 60 with at least 20 years of Federal Service or,
• Age 62 and 5 years of Federal Service.

You can apply for the benefit by completing Form RI 92-19 for a Deferred or Postponed Retirement application. OPM will need some time to process a deferred or postponed retirement application. You have to submit the form two months before you want the benefit to begin. Don’t expect payment for up to 6 months though; this can take a little time for OPM to audit your OPF. In a postponed MRA +10 retirement, here is what it would look like if your high three was $100,000 a year (just to make the math nice and easy to follow):

$100,000.00 High Three FERS *17% (represents your 17 years of credible Federal Service)

$17,000 a year in FERS retirement income or, $1,416.66 a month GROSS. Keep in mind, this is before healthcare, survivor or other deductions like taxes. If John, at age 60 tried to begin his pension income now, instead of waiting until age 62, he will experience a permanent reduction in his FERS annuity benefits. In his example, the reduction for starting 2 years early would be 10% – permanently. Now, this doesn’t apply to John’s situation but for other Feds reading this article listen closely, In order to keep your Federal Employee Health Benefits (FEHB) in retirement, you must leave Federal Service while being eligible for immediate retirement. Meaning you must have met one of the qualifications we have been discussing,

• Minimum Retirement Age (MRA) with 30 years of Federal Services,
• Age 60 with at least 20 years of Federal Service or,
• Age 62 and 5 years of Federal Service.

AND have been enrolled in FEHB for at least 5 years. Understanding your eligibility is so important under FERS so that you do not make permanent decisions that could impact your financial health or, compromise your benefits. If you have questions for Micah, let us know by emailing us.