Everything You Need to Know About OPM Retirement

MJPC
February 11, 2022

There are many factors related to retiring from federal service, and it is never too early to start planning.  But where do you begin? In this article, we’ll answer questions you might have as a federal employee about your OPM retirement benefits.

Closeup on the hands of a woman holding a jar of coins labeled savings

Are OPM benefits for life?

Congress created the Federal Employees Retirement System (FERS) in 1986, and it became effective on January 1, 1987. Since that time, new Federal civilian employees who have retirement coverage are protected by FERS.

FERS is a retirement plan that provides benefits from three different sources:

  • Basic Benefit Plan
  • Social Security
  • Thrift Savings Plan (TSP)

If you leave the Federal Government before retirement, Social Security and the TSP can follow you to your next position. The Basic Benefit and Social Security parts of FERS require you to pay your share each pay period.

The agency you work for will withhold the cost of the Basic Benefit and Social Security from your check as payroll deductions while they pay their part too. When you retire, you will receive annuity payments each month for the rest of your life.

The TSP part of FERS is an account that your agency is supposed to automatically set up for you. Every pay period, your agency should deposit 1% of your basic pay for the pay period into your TSP account.

You can also make your own contributions to your TSP account and your agency will also make a tax-deferred, matching contribution. The TSP is handled by the Federal Retirement Thrift Investment Board.

If you're retiring under the Minimum Retirement Age (MRA) plus 10 provision of FERS, health care and life insurance coverage are suspended until your annuity starts, even if it is postponed.

A clear jar ull of coins with a plant on top

How long will it take to process my federal retirement application?

According to OPM, common cases take around 2 months to process.

Your application could take longer if

  • OPM needs additional information from you or your former employing agency.
  • Your retirement claim has special circumstances, like applying under disability provisions, a specific retirement law (LEO, FF, or ATC), or evaluating a court order.
  • OPM needs to contact you to make a benefit election, like a service credit deposit.
  • OPM needs to contact another agency, like the Social Security Administration, if a benefit from them affects your claim.

If you submit your application in advance and make sure your Official Personnel Folder (OPF) is complete, you can help reduce delays in processing. If you submit your paperwork early, your personnel and payroll offices will be able to complete their work before your retirement date.

After how many years must a federal employee retire?

According to the CSRS, CSRS Offset, and FERS systems, you have the option to retire after reaching minimum age and service requirements. Although, eligibility requirements differ between the CSRS/CSRS Offset and FERS systems.

Under CSRS/CSRS Offset, an employee may retire at age 62 with 5 years of service, 60 with 20, or 55 with 30.

FERS employees are eligible for an unreduced, immediate annuity at age 62 when they have 5 years of service. At age 62 or older and with 5 years or more of service, you can leave Federal service and receive a full pension. Only those who choose this type of retirement are able to get a 1% addition to their retirement calculation.

For some federal employees, you must have reached the Minimum Retirement Age (MRA) to receive your retirement benefits. Refer to the following chart to figure your Minimum Retirement Age.

Chart of minimum retirement ages

What is the average pension of a federal employee?

Your OPM retirement basic annuity is found based on your length of service and high-3 average salary. To find your length of service for computation, add all your creditable service periods, then subtract any fractional part of a month from the total.

Your high-3 average pay is the highest average basic pay you earned during any 3 continuous years of service. These 3 years are generally your last three years of service; however, they can be an earlier period if your basic pay was higher during that time.

Your basic pay is the basic salary you earn for your job. It includes increases to your salary for which retirement deductions are withheld, such as shift rates.

What’s not included are payments for overtime, bonuses, etc. Note that if your total service was less than 3 years, your average salary was figured by averaging your basic pay during all of your periods of creditable Federal service.

The average monthly benefit under CSRS is around $4,000, which comes to about $48,000 per year. The median CSRS benefit (where half are below and half are above) is close to $3,500, or $42,000 each year.

The FERS defined benefits are smaller. On average, it is about $1,600 monthly and a median of about $1,300, for annual figures of $19,200 and $15,600. This is because that program also includes Social Security as a basic element.

A laptop next to a cup of coffee a cell phone and a notepad with en next to a window

How do I check my OPM retirement status?

After your agency gives OPM your retirement package, OPM will notify you and assign you a claim number. After you get this notification and claim number, you can contact OPM to receive updates on the status of your retirement application.

To check the status of your form or application, you may contact the OPM Retirement Office at 888-767-6738 or retire@opm.gov.

How do I contact OPM retirement?

OPM’s phone number for retirement services is 888-767-6738, but you can also contact them via email at retire@opm.gov.

Do you need help with your OPM retirement benefits? Give Melville Johnson, P.C. a call or contact us using the form below and schedule your consultation with one of our highly experienced federal employment OPM attorneys today!

This blog and web site published by Melville Johnson, P.C. should not be used as a substitute for seeking competent legal advice from a licensed professional attorney. Readers of this information should not act upon any information contained on this blog or website without seeking professional counsel.
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