Discontinued service


Q. If you’re laid off or terminated from a government position at 61, would you still pay the 5 percent-per-year penalty as if you retired under the MRA+10 provision?

A. Assuming that you had at least 20 years of service, there wouldn’t be any penalty. Further, you’d be entitled to the special retirement supplement, which approximates the Social Security benefit you earned while a FERS employee.


About Author

Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to fedexperts@federaltimes.com.


  1. David McKay on

    If you are MRA+10 at age 61, but have less than 20 years service, then yes you are still subject to the 5% (or slightly less than 5% penalty). Also, you would NOT be eligible for the special retirement supplement (SRS) if you retired with a penalty. Only those FERS retirees less than age 62 who are receiving a full FERS retirement annuity, WITHOUT penalty are eligible for SRS. Eligibility for SRS expires when you reach minimum Social Security Retirement age 62, regardless of whether you apply for early social security or not.

    To avoid the penalty if you are MRA+10 with less than 20 years of service at age 61, you can submit your FERS retirement application and retire from your job at age 61, electing to POSTPONE receipt of your FERS annuity till you reach age 62, when there would no longer be a penalty (only need 5 years credible service to receive a penalty free FERS annuity at age 62+). If you elect to postpone, you can also elect to resume your FEHB and FEGLI when you begin receiving your FERS retirement annuity.

    You can also just let them lay you off and then apply for a FERS Retirement Annuity via OPM 90 days before you turn 62, provided you DON’T cash out your FERS contributions when you separate. I believe you can also resume your FEHB and FEGLI once you receive your FERS Retirement Annuity.

    Lastly, you can just go ahead and elect to immediately begin receiving your FERS annuity pension at age 61 as MRA+10 and take the likely less than 5% penalty (actual FERS penalty computation is 5/12 of one percent for every month you are under 62), keeping your FEHB and FEGLI intact when you retire. Once you reach 62, you will start getting annual cost of living increases to your FERS annuity, which should recover the money you lost via penalty with a few years at most.

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