Special supplement calculation.

0
0

I retired May 31 at 56 years old and 34.5 years of service. Can you explain the wages that are used to calculate the special supplement. Before I retired the Post Office told me my supplement would be 1486. Using the formula ss x years /40 = 1622. A retirement group used publication 51 to calculate my supplement and they showed 1644. Opm has now stated my supplement at 1386. Why the difference?

Blocked by moderator
Posted by (Questions: 1, Answers: 0)
Asked on August 29, 2019 5:15 pm
538 views
0
Private answer

The calculation of the supplement is very complicated and you were provided an “estimate.” The estimates are usually pretty close but the final answer can only come from the Office of Personnel Management. Here is the chapter in the CSRS FERS Handbook with the formula for the calculation.

Blocked by moderator
Posted by (Questions: 0, Answers: 513)
Answered on August 29, 2019 5:29 pm
0
Private answer

I was shocked to find out the same thing. I will have 34 years soon and was expecting around 1522 a month based on formula. The kicker is you can NOT use any military time for your years of service, so for me formula is 31/40 x 1760= 1364, thats a bitter pill to swallow, but I’m not letting less than $160 keep me here. Now FedCalc retirement program, which I encourage all to look at, says my FERS Supplement is only $1320, so that makes it even a bigger lump, but Im still going…Hope that helps.

Blocked by moderator
Posted by (Questions: 1, Answers: 3)
Answered on October 26, 2019 8:46 pm
0
Private answer

I see, since Scott responded today, that I forgot the link to the CSRS FERS Handbook Chapter 51, on the supplement. Here is that link: https://www.opm.gov/retirement-services/publications-forms/csrsfers-handbook/c051.pdf I can understand everyone’s frustration on the supplement computation as it is something foreign to other benefits from FERS. It only uses full calendar years of FERS civilian service and the only military service used is if it is military service that interrupts civilian service as long as the deposit is satisfied. If the military service was performed prior to civilian service, even if the deposit is satisfied, it is still not used in the computation of the annuity. Quoting Chapter 51: “…to compute an annuity supplement, you must go through the following steps. First, create a “full career” earnings history using the employee’s basic pay during civilian service that is creditable under FERS and deemed wages for years after the employee turned 21 and before the first full year of FERS service. Second, update the earnings history for inflation. Third, compute the supplement, using the same formula that would be used by the Social Security Administration to compute a Social Security benefit, including the maximum reduction for early retirement under Social Security. Fourth, multiply the result of the third step by a fraction to approximate the proportion of a full career Social Security benefit earned under FERS.” As you can see, just using the shortcut provides an idea of what to expect but certainly not a final number.

Blocked by moderator
Posted by (Questions: 0, Answers: 513)
Answered on October 26, 2019 10:37 pm