A year ago I speculated in the PostalReporter News Blog, “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 to the basic annuity amount. Was that to discourage early retirements so they can justify weakening the no-layoff clause in upcoming contract negotiations?” My suspicions have proven correct. Recently the Postal Service asked Congress to authorize layoffs of career employees without offering VERs first.
The response rate to USPS early retirement offers has been poor. Lots of postal employees eligible or potentially eligible for the FERS annuity supplement have complained they didn’t know how much it was. When they called the HR Shared Services Center, they couldn’t get this information. Will the Postal Service continue to fail to provide this information?
I applaud Ernie Kirkland of the National Association of Letter Carriers for raising this issue in Federal Times. The other postal organizations have been strangely silent. OPM’s “CSRS and FERS Handbook,” Chapter 40, Section 40A2.1-3.N, requires the Postal Service to furnish an estimate of the FERS annuity supplement to eligible employees upon request. Most other federal agencies do.
FedBens.us will calculate the exact amount of your FERS annuity supplement using the same method as OPM. You will need your annual FERS earnings history. Estimates that use your Social Security record are less accurate, because your Social Security record includes work not covered by FERS and FERS service prior to age 22, neither of which is counted in calculating the supplement. You can learn more at FedSmith.com.
I should add that there is a common misconception (not dispelled by USPS) that you have to reach age 59 ½ to withdraw your Thrift Savings Plan funds without an IRS early withdrawal penalty. There is an exception. When you retire or separate, the minimum age to withdraw your TSP funds without an IRS early withdrawal penalty is 55. If you retire or separate before age 55, you can still avoid the IRS penalty by choosing an annuity or leaving your money in the account. See TSP publication 536, “Tax Information: Payments From Your TSP Account.”
Postal employees in FERS normally need 30 years of federal service to get the FERS annuity supplement before age 60. Many don’t know, and aren’t told, that in a VERA, RIF, or involuntary transfer over 50 miles the minimum service requirement is reduced to 20 years. FERS employees who retire (other than on disability or MRA+10) at less than age 62 will always receive an annuity supplement. The FERS annuity supplement begins when you reach your MRA (about age 56). It ends at age 62 when you become eligible for Social Security.