Protect Your Right to a Deferred Annuity. Sponsored By: Todd Carmack

Public Sector Retirement - PSR - Protecting your right to a deferred annuity

Many people work for several years in a job and then leave for one reason or another before they are eligible to retire. What distinguishes people who work for the federal government is that deductions from their income have been made for a civil service annuity during their employment.

While many people who quit government jobs want a refund of their contributions, others do not (usually, because they don’t even know they can do so).  This article is meant to address Individuals who leave their contributions in the fund – particularly those unaware that they may receive a refund, and those of you who are considering quitting the government before reaching retirement eligibility.

This is why: Provided you leave your contributions in the retirement fund, you’ll be eligible for a deferred annuity if you fulfill a few minimal criteria:

    • • You can qualify for an annuity at age 62 if you have or have had a minimum of five years of creditable service under CSRS.
    • • If you were under FERS, you might apply at the age of 62 with five years of service or at age 60 with 20. You can also retire at your MRA with at least 10; however, your annuity will be reduced by 5% for each year (5/12ths of a percent every month) while you are under the age of 62.


Again, and this cannot be stressed enough, this is only if you do not receive a refund of your retirement contributions after leaving the government before being eligible for an immediate annuity.

A deferred annuity, like an immediate one, is based on the CSRS and FERS formulas, which take into consideration total creditable service and your top three consecutive years of average pay, known as your “high-3.” It will be paid to you every month for the rest of your life once it starts. If you’re married and apply for a deferred annuity, you may also choose to offer a survivor benefit for your spouse.

Those were the advantages of a deferred annuity. However, there are some drawbacks too.

While the procedures for calculating a deferred annuity are the same as those for calculating a regular annuity, the high-3 utilized will be the one you had when you left the government. It won’t be raised by salary increases in your previous employment or retiree cost-of-living changes that occurred after you left. As a result, the longer the time elapses between when you leave and when you become eligible for a deferred annuity, the more significant the impact of inflation on your benefit is going to be there.

Furthermore, unlike an immediate annuity, any unused sick leave hours you had on the day you left the government will not be added to your years of service when your deferred annuity is calculated. Finally, as a deferred annuitant, you will be unable to re-enroll in the Federal Employees Health Benefits (FEHB) or Federal Employees’ Group Life Insurance (FEGLI) programs.

If you think you could qualify for a deferred annuity, visit and click on Forms. Then, under OPM Forms, download a 1496A (CSRS) or RI 92-19 (FERS). You should send the completed form to OPM at the earliest of two months before your retirement age mentioned above. On your birthday, your deferred annuity will start. If you apply later, your annuity will be paid back to the day you applied.

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