If you are one of the many employees being offered early retirement who are still years away from their Minimum Retirement Age (MRA), you might be feeling concerned and unsure about whether you should accept the (continually changing) current offer or to wait it out to see what happens next.   

Currently, multiple agencies are offering early retirement or a second chance at accepting a “deferred resignation” offer. As a reminder, early retirement is available at age 50 with 20 or more years of service and at any age if you have 25 or more years of service. 

There are two types of early retirement; one is voluntary, and the other one is involuntary. The Voluntary Early Retirement Authority (VERA)is an offer to retire early that can be turned down since it is “voluntary!” However, early retirement can be an involuntary action due to a major Reduction in Force (RIF). An involuntary early retirement is called Discontinued Service Retirement (DSR).  

Below are some highlights to know about VERA and DSR:

You must be offered a VERA or be subject to an involuntary separation to retire under the reduced age and service requirements of a VERA or DSR. In other words, without this offer, the regular retirement age and service requirements specify that you must be at your MRA with 30 or more years of service, 60 with 20 or more years of service, or age 62 with at least 5 years of civilian service to retire with immediate retirement with no age reduction.  Also, anyone covered under FERS who is at their MRA with at least 10 years of service is eligible for an MRA + 10 retirement, but if they don’t meet the requirements for an unreduced retirement, they would be subject to a five percent penalty for every year they are under age 62 (but they may postpone applying for this benefit to avoid the age reduction).   

To apply for retirement benefits, employees must submit their retirement applications (SF 3107 for FERS or SF 2801 for CSRS) to their HR service centers. This can be done at any time after receiving the notice and after you have decided on the date you will leave your federal career. It is important to request and receive an estimate of your retirement benefit along with answers to questions regarding your transition to retirement to be sure you are eligible to retire and to be sure all of your federal and military service will be properly credited towards the computation and eligibility for retirement.   

Under FERS, there is no penalty for accepting early retirement whether it is voluntary or involuntary. This means that if you meet the age and service requirements for VERA or DSR, there will be no age reduction applied to your FERS retirement benefit. Remember if you are at or over your MRA, you must have at least 20 years of service to be eligible for VERA or DSR retirement benefits. As all current CSRS employees should be over age 55 since they must have federal service that was performed before 1984, there are no age reductions for CSRS employees who apply for retirement in the current downsizing that is being conducted.       

The FERS benefit is computed by multiplying a factor of one percent by your years and months of service (including sick leave hours that have been converted to months and days of service) and then multiply the result by your high-three average salary. CSRS retirements are computed using a more generous 3-part formula. 

There is a FERS Special Retirement Supplement (SRS) which is payable at your MRA. This means if you retire younger than your MRA the supplement will not be paid in your first retirement payments but will be automatically added when you reach your MRA. The SRS provides additional income that replicates the Social Security benefit you’ve earned based on your federal civilian employment.   

There are no cost-of-living adjustments on your retirement under VERA or DSR until you reach the age of 62. This is also true of regular option retirement benefits under FERS. CSRS retirements receive immediate COLAs starting in the first year of retirement. 

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