How Retirement Benefits are Unique for Firefighters, Air Traffic Controllers, and Law Enforcement Officers Sponsored By:Flavio J. “Joe” Carreno
Unfortunately, not many FERS workers who are eligible for the Special Provisions clause know much about the provisions and the rules. As a result, many have ended up receiving less than the amount they are entitled to.
FERS employees in the following posts are under these special provisions:
Air Traffic Controllers
Firefighters
Officers of Law Enforcement Agencies
Capitol Police Officers
Officers of the Supreme Court Police
Couriers of Nuclear Substances
Age of Retirement Under Special Provisions FERS
Perhaps the most significant difference between employees under the Special Provisions clause and all other FERS employees is that employees under the former get reduced retirement ages, while other FERS workers can only seek immediate retirement when they are:
Sixty-two years old with five years of service
Sixty years old with twenty years of service
At their minimum retirement age with thirty years of service
At their minimum retirement age with ten years of service (subject to a 5% reduction of annuities until the employee is age 62)
For workers under the Special Provisions, things are more straightforward and more uncomplicated. FERS employees under the special provision can leave service
At age 50 with twenty years of service
At any age, as long as they have been in service for twenty-five years.
From the explanation, it is clear that law enforcement officers, air traffic controllers, and others covered under the Special Provisions can hang up their work boots much earlier than other FERS employees. For some people, this translates to opportunities to pick up a new profession or hobby. For others, it just means more years to sit back and relax.
Calculation of Annuities Under the Special Provisions
As stated earlier, Feds under the provisions get the best of both worlds: Earlier retirement and more money after retirement. For other FERS employees, the calculation of annuities is:
High three × Years of creditable service × Multiplier.
The multiplier is 1% for other FERS employees or 1.1 for FERS employees who retire at age 62 after a minimum of twenty years in service. But Special Provisions FERS get so much more than that. They get two multipliers, and both calculations are added up. The first calculation uses 1.7 as the multiplier for the first twenty years they worked. The second calculation uses a multiplier of 1% for other years. The FERS then adds up the result of the two calculations to arrive at the employee’s gross annuity.
To make things more straightforward, let’s use Mary, a regular FERS employee, and Jane, a Special Provisions FERS employee, as our examples.
Mary and Jane have both put in twenty-five years, and they both retire when they are age 56, which is Mary’s MRA. Another thing Mary and Jane have in common is a High 3 of $80,000.
Here is the calculation of Mary’s gross annuity on a yearly basis:
$80,000 × 25 × 1% (since she retires before age 62)
= $20,000
On the other hand, Jane’s calculation will look like this:
$80,000 x 20 x 1.7% + $80,000 x 5 x 1%
= $27,200 + $4,000
= $31,200
They both retire at the same age, spend the same number of years in service, and have the same High 3, but the multiplier difference gives Jane over $11,000 extra.
Conclusion
Many other things change when a FERS employee is under Special Provisions. The special benefit is a result of the demanding nature of the jobs under the category. As such, you must understand all the nuances of the Special Provisions to get the best retirement benefits.
Contact Information:
Email: [email protected]
Phone: 8139269909
Bio:
For over 30-years Flavio “Joe” Carreno of The Retirement Advantage has been a Federal Employee Retirement System specialist (FERS) as well as a Florida Retirement System specialist (FRS) independent advocate. An affiliate of PSRE (Public Sector Retirement Educators), a Federal Contractor & Registered Vendor to the Federal Government, also an affiliate of TSP Withdrawal Consultants. We will help you understand your FERS & FRS Benefits, TSP & Florida D.R.O.P. withdrawal options in detail while recognizing & maximizing all concurrent alternatives available.Our primary goal is to guide you into retirement with no regrets; safe, predictable, stable, for life. We look forward to visiting with you.
Disclosure:
Not affiliated with the U.S. Federal Government, the State of Florida, or any government agency. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation. Although we make great efforts to ensure the accuracy of the information contained herein we cannot guarantee all information is correct. Any comments regarding guarantees, safe and secure investments & guaranteed income streams or similar refer only to fixed insurance and annuity products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC insured.
