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 COMPUTATION OF RETIREMENT ANNUITIES FOR LAW ENFORCEMENT OFFICERS/FIREFIGHTERS

The annuity for CSRS law enforcement officers and firefighters is based on:

  • Years of creditable service for retirement.
  • High-3 average salary.
  • CSRS special retirement annuity computation formula.
YEARS OF CREDITABLE SERVICE

Creditable service includes all creditable civilian service performed as a Federal employee, honorable active military service, and unused sick leave.

HIGH-3 AVERAGE SALARY

Your high-3 average salary is based on the highest 3 years of basic pay or salary you earned in any consecutive 3-year period. Generally, the final 3 years of service include the highest pay, but pay from an earlier period can be used if it was higher.

Basic pay includes locality pay, night differential pay (for wage grade only), and premium pay for firefighters/law enforcement officers. It does not include night differential pay for general schedule employees or bonuses, allowances, or overtime pay.

Under the Non-foreign Area Retirement Equity Assurance (NAREA) provision of the National Defense Authorization Act for Fiscal Year 2010, beginning January 1, 2010 employees working in non-foreign areas will start receiving locality pay in lieu of Cost of Living Allowance (COLA). The transition from COLAs to locality pay will be phased in over a three-year period beginning in 2010. Employees who separate on immediate retirement between January 3, 2010 and December 31, 2012, are permitted under NAREA to elect a credit for a portion of their COLA in 2010 and 2011 as basic pay for retirement annuity computation purposes. The employees must pay retirement deductions on the portion of the COLA that is being credited as basic pay and the employing agency will pay employer contributions on the basic pay portion of the COLA. Employees who want to make this election must submit their election to the Civilian Benefits Center at the time they separate for retirement. Contact the Benefits Line for additional information.

CSRS FORMULA FOR COMPUTING THE ANNUITY OF LAW ENFORCEMENT OFFICERS AND FIGHTERS

The basic annuity is computed as follows:

  • 2.5 percent of the high-3 average salary multiplied by creditable service up to 20 years; plus
  • 2 percent of the high-3 average salary multiplied by all creditable service over 20 years.

If you work a part-time work schedule after April 6, 1986 your annuity will be prorated based on the number of hours you work. Your Retirement Specialist can provide additional information.

REDUCTIONS TO THE BASIC ANNUITY COMPUTATION

Your annuity will be reduced if:

  1. You did not make a deposit for service performed before October 1, 1982, during which no deductions were taken from your pay. Your annuity will be reduced 10 percent of the amount of the deposit that you owe. Nondeduction service after October 1, 1982 is not used in the computation of benefits if the deposit is not paid.
  2. You elect a survivor annuity for your current or former spouse. The reduction is dependent on the base you elect for the survivor annuity. If you elect your entire annuity as the base for the survivor annuity, your annuity will be reduced by 2.5 percent of the first $3,600 of your annuity, plus 10 percent of your annuity over $3,600.
  3. You elect a survivor annuity for a person who has an insurable interest. Your annuity will be reduced by 10–40 percent, depending on the difference between your age and the age of the person you name.
  4. You did not make a redeposit of a refund for a period of service that ended before March 1, 1991. Your annuity will be reduced based on your age at retirement and amount of redeposit due.
  5. You elect an alternative annuity because you are eligible for a nondisability annuity but have a life threatening or other critical medical condition.
ADDITIONS TO THE BASIC ANNUITY COMPUTATION

Your annuity will be increased if you have a Voluntary Contribution account and elect to purchase an additional annuity. Your annual annuity will be increased $7 per year for every $100 in your Voluntary Contribution account.

WITHHOLDINGS FROM ANNUITIES

OPM will automatically withhold the following from your retirement annuity:

  1. Federal income tax in the amount that is currently withheld from your salary. Withholdings for State income tax are not automatic. OPM has agreements with some States to allow the withholding of State income tax, but you must specify the dollar amount ($5 or more) you want withheld.
  2. Premiums for Federal Employees Health Benefits, if you are eligible to continue coverage.
  3. Premiums for Federal Employees’ Group Life Insurance, if you are eligible to continue coverage.
  4. Premiums for Federal Dental and Vision Insurance Program, if you are enrolled.
COST OF LIVING ADJUSTMENTS

The year following your retirement, you are eligible for cost of living adjustments to your annuity. The first year’s increase is prorated based on how many months you were retired.

COMPUTATION OF CSRS OFFSET RETIREMENT ANNUITIES

If your retirement plan is CSRS Offset, your annuity is computed in the same manner as if you were covered under CSRS, except the annuity payment is reduced (offset) when you become eligible for a Social Security benefit. The offset is applied when the basic requirements for Social Security are met (usually at age 62), even if you do not apply for Social Security. If you are not entitled to Social Security at age 62, there is no offset until or unless you later become entitled to Social Security.

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