Retirement & Benefits

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Deferred Annuity (Leaving Federal Service with Delayed Benefit Payments)

Separated employees in the Civil Service Retirement System (CSRS), CSRS-Offset and the Federal Employees Retirement System (FERS), with at least 5 years of creditable civilian service will have deferred annuity eligibility at the age of 62 if their retirement contributions remain in the Retirement Fund with the Office of Personnel Management (OPM).

IMPORTANT: If an employee separates from Federal service and takes a refund of their retirement contributions, all entitlement to a deferred annuity are forfeited, unless they are rehired into the Federal service and again gain new retirement rights.

Deferred annuities for CSRS and CSRS-Offset employees are based on the earned annuity (years of service multiplied by the highest-salaried 3 consecutive years of service) as of the date of separation. The monies on deposit earn no interest from the date of separation until the date the deferred annuity begins at age 62.

Deferred annuities for FERS employees are based on the earned annuity (years of service multiplied by the highest-salaried 3 consecutive years of service) as of the date of separation. The monies on deposit earn interest (at a rate established by the overall yield of the retirement fund's assets for the preceding year) from the date of separation until the date the deferred annuity begins.

Unreduced deferred annuity benefits for FERS employees are available at the following age/service combinations:

Minimum Retirement Age:	55-57	30 years of service
	60	20 years of service
	62	5 or more years of service

Reduced deferred annuity can begin at:

Age 55-57

10 years of service (Reduction of 5% for each year under age 62)

Survivor Benefits Applicability in Deferred Annuity Situations

CSRS - CSRS-Offset - If a separated employee (without taking a refund of retirement contributions) dies before attaining eligibility for a deferred annuity, the amount of money in the retirement account is paid in a lump sum to the beneficiary(s). No survivor benefits are paid.

A separated employee who leaves their retirement contributions in the retirement fund and applies for a deferred annuity beginning at age 62 may elect survivor benefits for a spouse at the time they apply for a deferred retirement annuity.

FERS - If a FERS employee separates with at least 10 years of creditable Federal service, does not take a refund of their retirement contributions, and dies before becoming eligible for a deferred annuity, the surviving spouse* will receive a benefit of 50% of the separated employee's earned annuity as of date of their separation. It will begin at the time the deceased employee would have reached age 62 or sooner if the spouse elected to received a reduced benefit. The benefits would be reduced 5% for each year that the deceased employee was under age 62. The benefit ends if the spouse remarries before age 55.

If a separated employee dies and had less than 10 years of creditable Federal service, all money in the Retirement Fund will be refunded to the beneficiary(s) in the natural order of precedence or to the otherwise designated beneficiary.

Order of Precedence: Spouse, child or children, parents, executor or administrator of estate or next of kin.

If a separated FERS employee leaves their retirement contributions in the fund and applies for a deferred annuity, they can elect survivor benefits for the spouse at the time they apply for a deferred annuity.

*Note: The “surviving spouse” must have been married to the separated employee as of the date of the employee's separation from Federal service.

Withdrawing Retirement Contributions

CSRS and CSRS-Offset employee can withdraw their retirement contributions at the time of separation and if they later return to a covered position in the Government, redeposit those refunded contributions with interest. Whether or not they want to redeposit the refunded money depends upon when they took the refund:

Refund for service ending before 10/01/90	A refund for service ending before 10/01/90 is creditable without a redeposit, but the annuity is actuarially reduced. The redeposit is “deemed” paid. A redeposit will avoid any reduction in annuity.
Refund for service on or after 10/01/90	If a redeposit is not made for service performed on or after/01/90 the service will still be used to reach retirement eligibility, but NOT in the computation of the annuity. This will result in a reduced annuity.

NOTE: Unpaid redeposit reduction is a permanent reduction in the annuity.

FERS employees who take a refund of their retirement contributions upon separation and are later rehired in the Federal government lose all of the service that was covered by the refund. There is no provision to make a redeposit for refunded FERS service as there is under CSRS. The refunded service, however, remains creditable for leave and Reduction-in-Force purposes.

Federal Employees Health Benefits (FEHB) and Federal Employees' Group Life (FEGLI) for Deferred Annuities

Health and Life Insurance coverage is not reinstated whenever a CSRS deferred annuity becomes effective.

If a FERS employee is eligible for an MRA + 10 annuity upon separation, but decides to postpone the commencing annuity, the health and life insurance coverages may be reinstated when the annuity begins. The FEGLI may be reinstated based on the coverage the annuitant had at separation and was eligible to continue into retirement. The annuitant may re-enroll in any FEHB plan or option for which they are otherwise eligible.

NOTE: FEHB and FEGLI coverages are reinstated prospectively, even if the annuity is retroactive to the first month following separation.

Rev 3/2000