In recent VERAs the Postal Service issued FERS annuity estimates that omitted the employee’s FERS annuity supplement. The FERS annuity supplement is often nearly equal the basic annuity amount. Was that to discourage early retirements so they can justify weakening the no-layoff clause in upcoming contract negotiations?

The method of calculating the FERS annuity supplement is explained by Robert F. Benson in What are “Deemed” Salaries in the FERS Annuity Supplement? If you have the necessary personal information, his software at http://www.fedbens.us/ will calculate the exact amount of your FERS annuity supplement. The PDF Attachmenthas an example.

Most postal employees in FERS are eligible for the annuity supplement after age 55 with 30 years of service, but in a VERA, RIF, or involuntary transfer over 50 miles that requirement is reduced to 20 years–a significant bonus. Federal law enforcement officers, like Postal Inspectors and OIG, are eligible for the FERS annuity supplement at age 50 with 20 years of service.

OPM’s Handbook, Chapter 40, Section 40A2.1-3.N, requires the Postal Service to furnish this information for eligible FERS employees.

The Postal Service also neglects to mention another advantage in an early retirement. The funds in your Thrift Savings Plan may be withdrawn after retirement and age 55 without an IRS early withdrawal penalty. If you retire before age 55, you can avoid an IRS early withdrawal penalty by choosing an annuity. See Important Tax Information About Payments From Your TSP Account

Don Cheney
Auburn WA