Special Retirement Supplement Explained

Special Retirement Supplement Explained

 

Psst, can you keep a secret? Well, Federal Educators can’t! We’ve got to tell every federal employee about the Special Retirement Supplement that could impact your retirement planning because many still don’t know about it. If you are a FERS employee planning to retire before 62 years old, this is for you!

Also known as the FERS Supplement, the Special Retirement Supplement (SRS) was created to help bridge the payment gap for qualified FERS that wish to retire before 62 years old. It is designed to supplement your missing Social Security income until you reach age 62. Here’s how to determine if you qualify.

Because this supplement does not have a counterpart in the Civil Service Retirement System (CSRS), you must first make sure that you are in the FERS Retirement system. The next step to determine eligibility is ensuring that you have a normal immediate retirement, not an early retirement (MRA+10) planned. This means that you have earned 30 years of creditable service and met your MRA or have 20 years of creditable service and are 60 years of age.

The amount received represents what you would receive for your FERS civilian service from Social Security. Paid by the Office of Personnel Management (OPM), it is calculated as if you were eligible to receive your Social Security benefits on the day that you retired. It’s important to note that this does not have an impact on your eventual Social Security benefits. There is also no reduction to your supplement, even if you work after retirement, until after the first calendar you receive it. This is an earned benefit, and you won’t need to report any earnings until the following year. Then, the earnings you receive after reaching your MRA will be compared to the Social Security earnings limit for the same year. Your monthly annuity supplement will also be reduced by 1/12 of the annual excess earnings.

There are some nuances to take note of when participating in the FERS Supplement program. Items like filling out an earnings report to a supplement reinstatement can be confusing. The Federal Educators team can assist with the FERS Supplement process by providing helpful resources and webinars. Give our Tampa office a call at (813) 544-2908 to get started.