Ask The Experts: Retirement

By Reg Jones

Ambiguity in OPM guidance for FERS disability

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Q. OPM states repeatedly *_When you reach age 62, your annuity will be recomputed using an amount that essentially represents the annuity you would have received if you had continued working until the day before your 62nd birthday and then retired under FERS._*

So here is the case. Employee is 59. Last three years of salary are $60K, $59K, $58K, so a high-3 of $59K. If the employee had worked to age 62, she would have a high-3 of $60K not $59K incremented by nonexistent cost-of-living adjustment. So which is it? Does your high-3 get recalculated to *_represents the annuity you would have received if you had continued working until the day before your 62nd birthday and then retired under FERS. Or not?

A. At age 62 an artificial retirement benefit is calculated as if you had worked to age 62. Thus, your actual service on the day you retired is added to the time you spent on the disability rolls. That total time is multiplied by 1 percent. The product is multiplied by your high-3 on the day you went on disability retirement, increased by all FERS cost-of-living adjustments that were payable from that time to age 62.

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