Q. I am now eligible as a CSRS/FERS hybrid for a maximum pension for my previous service, since I am over 62. I understand there is no more actuarial adjustment (higher annual benefit) after age 62 for delaying receipt. My last employment was about 20 years ago. If I take my annuity and am later rehired, I understand that I cannot have my high-3 and high-5 years recalculated unless I serve more than 5 years. However, what if I just don’t take my annuity? Aren’t I then eligible for redetermination for each year of re-employment? Is there any age at which I am forced to be an annuitant? If I delay taking my annuity, do I lose CPI adjustments?
A. Since you have at least five years of creditable service and are at least 62, the age-based reduction of the FERS portion of your annuity won’t apply. If you retired, your annuity would be based on your salary and years and full months of service on the day you left. If you then went back to work for the government, as a rule, the salary of your new position would be offset by the amount of your annuity. FERS retirement deductions would be taken from your salary, and, if you worked for at least one year but fewer than five, you would be entitled to a supplemental annuity, which would be figured at 1 percent of your salary for your current period of employment. The supplemental annuity would be added to your current annuity. On the other hand, if you worked for five or more years, you would be eligible for a redetermined annuity. In that case, both portions of your annuity would be recalculated based on your new high-3, with the FERS portion increased because of those additional years of service.
If you decided not to apply for an annuity before being re-employed, you would be able to receive the full salary of your new position. When you finally retired, your annuity would be based on your new high-3 and increased length of service under FERS. As before, the CSRS portion would only be affected by your new high-3.