Q. I am contemplating retirement with a separation date of Jan. 6, 2014. Under FERS, my creditable service for retirement (on Jan. 6, 2014) will be 29 years and two months (service computation date of Oct. 24 1984). My creditable service for RIF and leave (on Jan. 6, 2014) will be 31 years and seven months (service computation date of June 20, 1982). The estimate I have indicates the MRA+10 provision, reducing my annuity by approximately 35 percent (5 percent each year under 62; I will be 57 in January). From an eligibility standpoint, which would be the correct creditable service date to use? I understand the annuity formula (1 percent x high 3, etc); if I have at least 30 years of service and have reached MRA, why such a huge penalty when the annuity is already based on the years I was able to contribute to the annuity portion of FERS?
A. The creditable service for retirement is the one that will be used. As for the impact of retiring under the MRA+10 provision, the 5 percent per year reduction is a matter of law. And it affects everyone who retires under that provision in the same way. For example, someone who retired with only 10 years of service would be entitled to a basic annuity of 10 percent of his high-3. You, on the other hand, would be entitled to an annuity of 29-plus percent. Each of you would have his annuity reduced by 5 percent for every year you were under age 62.