A primer on the FERS supplement

The FERS basic retirement benefit often includes a “supplement” to take the place of a Social Security retirement benefit when an employee retires with an unreduced, immediate benefit, but is younger than the age to qualify for Social Security retirement.  

FERS was designed to be a three-tiered retirement system based on participation in Social Security, Thrift Savings Plan and a government retirement benefit. The FERS retirement benefit is smaller than the one paid under CSRS for any given length of service and level of compensation as the older CSRS system was designed to “stand alone” without the additional benefits of Social Security or the TSP. 

The FERS supplement provides a “bridge” to Social Security entitlement for certain employees who retire younger than age 62. It is equal to the Social Security benefit that they earned while employed by the federal government and enrolled in FERS.   

About half of all FERS employees are entitled to this benefit when they retire. The supplement ends when the recipient turns 62. After reaching the minimum retirement age until the supplement ends at 62, an earnings test is applied by the Office of Personnel Management that can cause a reduction or elimination of the supplement. 

Since the FERS supplement can get complicated, let’s look at some key questions and answers about it. 

Who is eligible to receive the supplement? 

To receive the supplement, an employee must retire on an immediate, unreduced retirement.  This includes retirements that meet the minimum eligibility requirement of having reached the Minimum Retirement Age (MRA) plus they must have at least 30 years of service or retire at age 60 or 61 with at least 20 years of service.   

The FERS supplement is especially significant to those who must retire early under special provisions that apply to certain groups of employees, including law enforcement officers, firefighters, air traffic controllers, National Guard technicians, Customs and Border Protection officers, nuclear materials couriers and special agents of the Diplomatic Security Service. It is generally payable at retirement for these special coverage employees when they retire as early as age 50 with 20 years of covered service. It’s sometimes available even earlier for employees eligible to retire when they complete 25 years of covered service. The mandatory retirement age for most of these employees is 57 (56 for air traffic controllers). 

For employees who retire under discontinued service (involuntary) retirement provisions or under early retirement provisions (that is, a major reduction in force, reorganization, or transfer of function), the supplement is payable when they reach their MRA if they retire at a younger age. 

In addition, a surviving spouse of a FERS retiree (not employee) may also be eligible for the supplement if they meet the following requirements: 

• Entitled to a current spouse survivor annuity; 

• Under age 60;  

• Entitled to Social Security survivor benefits (based on the deceased annuitant's employment under Social Security) at age 60; and  

• Not presently eligible for Social Security mother, father, or disability benefits based on the deceased's account.  The surviving spouse's earned Social Security benefit is not considered in determining if he or she is eligible for the spousal annuity supplement. 

The spousal annuity supplement terminates at the beginning of the month in which the spouse attains age 60. 

Who is not eligible? 

If you’re already 62 when you retire, you will be eligible for Social Security retirement rather than the FERS supplement. Employees who resign without being old enough or having enough service to qualify for an immediate retirement are not eligible for the supplement even though they may receive a deferred retirement at a later date. 

Employees retiring at their MRA with at least 10 years but less than 30 years of service (known as “MRA+10” retirement) and those retiring at age 60 or 61 with more than 10 but less than 20 years, are not eligible for the supplement even though they may choose to postpone their retirement application. Disability retirees are also not eligible. 

How is it paid? 

There is no special application to receive the FERS supplement. If you are entitled to receive this benefit, it is included with the FERS basic retirement benefit, which is administered by OPM. 

What is the earnings test and how is it applied? 

Continued receipt of the annuity supplement is subject to earnings test every year and can be affected by wages earned by the retiree. OPM conducts annual surveys of more than 77,000 supplement recipients to assess their earnings. These surveys are sent in April and must be returned by the beginning of June. 

OPM relies on the Social Security determination of the exempt amount of earned income that a retiree can receive without causing a reduction in the FERS supplement.  For 2024, the exempt amount is $22,320 and for 2025, the annual exempt amount is $23,400.  

An example of the earnings test: 

Roger retired Aug. 31, 2023, under FERS at age 57 with 32 years of creditable civilian federal employment.  He received his first earnings survey from OPM in May of this year.  Since Roger worked after his retirement, he is required to report his earnings from Sept. 1, 2023, through Dec. 31, 2023 (only earned income after his retirement from FERS).  Roger reported earnings of $25,000 during this period. The earnings limit for 2023 was $21,240 and Roger exceeded this limit by $3,760 ($25,000 - $21,240). His supplement will be reduced by $1 for every $2 he exceeded the limit or $1,880/year ($3,760/2) or $157/month ($1,880/12) beginning with his July FERS benefit payable on Aug. 1, 2024. Roger will receive his next survey in the spring of 2025 when he will report any earned income he receives in 2024.   

An example of the earnings test for a law enforcement officer: 

Let’s suppose Josie, a federal law enforcement officer, plans to retire at age 54 on Dec. 31, 2024, with 20 years of service. Her birth date is Nov. 15, 1970, and her minimum retirement age is 57. She won’t be subject to the annual earnings test until she has reached that age. 

Now, let’s fast forward and see what happens when Josie turns 57. Assume she has been receiving a FERS supplement of $1,400 per month, or $16,800 annually. 

She will reach her minimum retirement age on Nov. 15, 2027. Josie will not be subject to the earnings test until 2027 because the earnings limit is not applied until after reaching the MRA. Josie will receive her full supplement from January 2025 through Nov. 15, 2027, regardless of whether she has earned income after her FERS retirement or not. The first annual earnings survey will be sent to her early in 2028 and she will only report any earned income that she had after Nov. 15, 2027, through Dec. 31, 2027.  Let’s assume Josie earns $6,000 during that period. She will not have a reduction in her supplement for 2028 as her earnings were well below the earnings limit. The reduction to her supplement is computed at $1 for every $2 earned income over the limit. In early 2029, Josie will report her earned income for 2028 and if her earnings for that year exceed the 2028 earnings limit, she will have her supplement reduced beginning with the July 2029 FERS annuity payment (paid on Aug. 1, 2029). If Josie fully retires before age 62, she can provide proof of her earnings level to OPM and request to have the supplement restored. The supplement ends at 62 for all FERS participants. 

Should I let OPM know when my income changes? 

Will the supplement be eliminated by Congress? 

So far, the supplement is still available to eligible federal retirees. The FERS supplement is one of the benefits included when FERS was implemented that allows federal employees to plan for retirement with similar age and service requirements as employees who retire under the older Civil Service Retirement System. Although there have been proposals in the past to eliminate the FERS supplement, so far it has remained an important part of the FERS retirement benefit for federal employees who fully retire earlier than age 62.   

OPM has additional FAQs on the FERS annual supplement survey.