For FERS workers, the MRA+10 retirement provision gives you the option of retiring early while keeping most of your benefits, including your FEHB coverage, if you can comply with the FEHB 5-year rule.
To be eligible for an MRA+10 retirement, there are three requirements:
- You must have 10 years of creditable service in a FERS-covered position,
- You must have reached your minimum retirement age (MRA) before leaving your position,
- You must keep all of your contributions in the FERS system.
Your MRA is based on the year you were born and ranges from age 55 to 57 for most current FERS participants.
The Downside: The MRA+10 Reduced Annuity Age Penalty
If you retire under the FERS MRA+10 and start receiving your pension immediately, your benefit will be reduced for each month you’re under age 62. This reduction equals 5% per year (or 5/12 of one percent per month). When you think about it, losing 5% per year over a period of several years is a considerable loss. Fortunately, there is one way to avoid the reduction: the Postponed Retirement Option.
“It’s also important to understand that when you retire under the MRA+10 provision, you’re not eligible for the FERS Annuity Supplement.”
The Upside: The Postponed Retirement Option
Under the MRA+10 provision, your annuity is not reduced if:
- It begins after your 60th birthday and you have at least 20 years of service.
- Or you reach your Minimum Retirement Age and have 30 years of service.
According to the OPM.gov website, delay of the benefit can be used to avoid all or part of the reduction for retirement before age 62.
It’s also important to understand that when you retire under the MRA+10 provision, you’re not eligible for the FERS Annuity Supplement. And when it comes to your TSP, you’ll have access to your funds but you can no longer make contributions.
Other Advantages Of The Postponed Option
Another advantage of the Postponed Retirement Option is that you remain eligible for Federal Employee Health Benefits (FEHB) as long as you have at least five years of consecutive coverage under FEHB. Though you will not receive FEHB coverage when you stop working, you can reinstate your federal healthcare benefits when you apply for your FERS annuity (pension) at a later date. Also keep in mind that, your FEGLI enrollment will stop until the annuity begins. At that time, the life insurance coverage you previously had will resume if you’re eligible.
Retiring under the FERS MRA+10 provision requires careful consideration. Connect with an FRC® trained advisor to discuss the pros and cons.
