Federal Employees Retirement System (FERS) employees may qualify for Discontinued Service Retirement (DSR) under specific conditions, typically tied to an involuntary separation from federal service. Please note that employees covered under CSRS are also eligible, but this article will focus on the FERS aspect.
Involuntary Separation
Your separation must be involuntary and not due to misconduct, resignation, or voluntary retirement. Examples of involuntary separation include layoffs due to reduction-in-force (RIF), agency reorganization, lack of funding, elimination of position, transfer of position outside the commuting area, and separation during the probationary period due to performance.
Eligibility For Discontinued Service Retirement
- Age 50 with 20 years of service
- Any age with 25 years of creditable service
A minimum of 5 years of your creditable service must be civilian service. Also, any accrued annual leave may be added to help you get you over the finish line. Any accrued unused sick leave will be added to your creditable service solely to calculate your annuity, it does not count toward making you retirement eligible.
Under FERS there will be no reduction to your annuity if you qualify for DSR before reaching your MRA, however, you will not receive a retirement annuity supplement until you reach your MRA. The retirement annuity supplement is meant to act as a substitute for Social Security until you reach the minimum age when you can file for benefits. Therefore, this supplement will cease when you turn 62. But, good news, your FERS COLA will kick in when you hit 62.
Employees retiring under DSR will be able to carry their insurance benefits into retirement as long as they meet the continuous enrollment requirements.
Reasonable Offer
If an agency makes you a reasonable offer of another position in your agency, you do not qualify for discontinued service retirement. The OPM defines a reasonable offer as meeting the following criteria:
- The agency offer of the position must be in writing.
- The employee must meet established qualification requirements for the position.
- The position offered must be in the employee’s agency.
- The offered position must be within the employee’s commuting area unless the employee is under a geographic mobility agreement.
- The offered position must be of the same tenure.
- The offered position must not be lower than the equivalent of 2 grade/pay levels below the employee’s current grade or pay level.
For more information and assistance in navigating your complex federal benefits, reach out to a Federal Retirement Consultant® who can answer any question you may have.
