Does the highest 3 salaries gets factored in for a deferred retirement if you’re not going for MRA?

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I work for the Dept. of Veterans Affairs and I have concerns regarding the highest 3 salaries for FERS if MRA is not met. Will the highest 3 salaries still get factored in for deferred retirement? What do they mean by “reduced benefit” if you met MRA but not the number of years of federal service.
I was born after 1970 so my MRA is 57 (reduced benefit).

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Asked on October 17, 2019 6:55 pm
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If you retire under the deferred option, that means you left federal service before your MRA with at least 10 years of service. If you leave your retirement contribution in the retirement fund, you can collect a retirement from your former work with the federal government either at your MRA with a reduced annuity unless you had at least 30 years of service or deferred to age 60 with 20 years of service or deferred to age 62, in which case there is no age penalty. In all these instances, your retirement is calculated based on your years of service and your high-3 average salary as of the day your resigned your federal position. The age penalty is applied if you decided to take your retirement before what FERS considers voluntary retirement age. Say for example, you decided to take your retirement at your MRA with only 10 years of service, your would collect 10% x high-3 at the time you left federal service and then the age penalty would be applied to that amount. If you Minimum Retirement Age is 57, the age penalty would equal 25% as it is a 5% penalty for every year you are under the age of 62, permanent penalty for life. If you deferred to age 60, it would only be a 10% penalty and if your waited until age 62, there would be no penalty, however, it would still be calculated on the year of service and the high-3 average salary as of the date you resigned.

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Posted by (Questions: 0, Answers: 532)
Answered on October 17, 2019 9:11 pm