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Question of the Week: FERS Disability Retirement

Q: If I retire with a Federal Employees Retirement System (FERS) disability retirement at age 47 with 20 years of service, how is my annuity calculated?

A: FERS disability retirement benefits are computed as 60 percent of your high-3 average salary for the first 12 months (offset by 100 percent of any Social Security disability you might receive). At age 47 with 20 years of FERS service, your benefit will be computed under the disability computation since you are too young to receive an immediate, unreduced retirement benefit.

Under the FERS disability formula, starting the 13th month, you would receive 40 percent of the same high-3 average salary until you reach age 62 (offset by 60 percent of any Social Security disability you might receive).

At age 62, OPM will no longer reduce your disability annuity by any benefits you might be receiving from Social Security. OPM will automatically recalculate your annuity using the regular FERS formula as if you had been working since the date of your separation; it will include the creditable service you had before the date of separation and an adjustment to your high-3 average salary based on the FERS COLAs received during your previous years of retirement.

Since you will have more than 20 years of service at age 62, your FERS benefit will be recomputed using the FERS 1.1 percent factor. You will qualify for 38.5 percent of your adjusted high-3 average salary starting at age 62, based on 35 years of actual and projected service.

Note: If you were a special category employee (e.g., law enforcement officer, firefighter, air traffic controller) upon separation for FERS disability retirement, for the automatic recomputation at age 62, OPM would use the 1.7 percent factor up to a maximum of 20 years, and the remaining years would be computed at the 1 percent factor rate.

  • 1.7 percent x 20 years of special category service = 34 percent
  • 1 percent x 15 years of disability retirement from age 47 to age 62 = 15 percent
  • Total = 49 percent

Even though special category employees typically have mandatory retirement ages prior to age 62, the automatic recalculation of a FERS disability retirement still includes service credit for the time between the employee’s separation from federal service and his or her reaching age 62.