How will the decision affect an employee's retirement age?

How will the decision affect an employee's retirement age?

"An employee's age and amount of service are two important variables in determining when he or she can retire. The age and service requirements under FERS are similar to the age and service requirements under CSRS, with a few notable differences.

"Under CSRS, you can retire on a regular retirement as early as age 55 if you have 30 years of service. FERS, however, has a minimum retirement age based on your year of birth. For employees born before 1948, it's age 55. For employees born in 1948 or later, it gradually increases to age 57. For most people eligible to transfer to FERS, the minimum retirement age will be between ages 55 and 56.

"An employee who has reached the minimum retirement can retire with an unreduced benefit with at least 30 years of total creditable service. However, even without 30 years of service, an employee can still retire at the minimum retirement age with at least 10 years of service. We call this the MRA+10 retirement. Employees should realize that if they rertire at their MRA with less than 30 years of service, their annuity benefit would be subject to a rather substantial age reduction. Nonetheless, this may be an attractive option for employees who want to retire earlier than they could under CSRS.

"Deferred benefits are also more flexible under FERS. If you leave government before qualifying for an immediate benefit, you can qualify for a deferred annuity as early as your minimum retirement age with at least 10 years of service. Again, the deferred annuity may be subject to a substantial age reduction, however, under CSRS, you would have to wait until age 62 to get a deferred benefit.

"Social Security is an important part of the FERS benefit, but if you retire before age 62 , you will have to wait until age 62 to start collecting your benefit. If you transfer to FERS, you may be entitled to a Special Retirement Supplement paid by OPM. This supplement substitutes for the Social Security benefit until age 62 and is an approximation of the amount of the Social Security benefit earned while covered under FERS. And, like Social Security, it's subject to an earnings test. You must have at least one calendar year of service under FERS to qualify for the supplement, and you must receive an immediate retirement. However, if you retire under the MRA+10 provision, you cannot receive the supplement."

-Mary Sugar, chief of the Office of Personnel Management's Agency Services Division

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