(This article first appeared in the September/October 2020 issue of the American Postal Worker magazine)

What will happen to your federal retirement benefit should you resign/separate from the USPS prior to being eligible to retire depends on several factors, starting with how much creditable federal service you have when you leave.

Active duty military service credit can be considered towards retirement eligibility, however, federal employees must complete a minimum of five years of civilian federal service covered by FERS retirement deductions to meet the minimum requirements for a FERS retirement benefit.

Leaving because of disability or under a Voluntary Early Retirement Authority (VERA) is not applicable to the below scenarios. Also, if you have less than five years of creditable civilian service, you’re not eligible for a retirement benefit and you can take a refund of your Federal Employees Retirement System (FERS) contributions.

If you resign/separate with five or more years of service, your retirement benefit will be based on years of service when you leave and your age at the time you apply for the retirement benefit as follows:

• If you leave with 5 or more years of service, you are eligible for a deferred retirement benefit at age 62 or later.
• If you leave with at least 5 years but less than 10 years of service, you’re eligible to apply for retirement at age 62. The benefit is calculated as 1% times your high-3 years average salary times the years and months of service.
• If you leave with 10 years but less than 30 years of service, then when you reach your minimum retirement age (MRA, age 55-57 based on year of birth) you’re eligible for a reduced retirement benefit, which is calculated the same as above, except there is a 5% reduction for each year you are under age 62.
• If you leave with 20 years but less than 30 years of service, then you can avoid the 5% per year reduction, if you wait until you reach the age of 60 to apply for the retirement benefit.
• If you leave with 30 years or more of service, then you be will eligible for an unreduced retirement benefit when you reach your MRA (age 55-57).

When you reach your MRA or later and you resign/ separate before you have enough service for an unreduced immediate retirement you may still receive a retirement benefit as follows:

• If you’re at your MRA with less than 10 years of service, you’re eligible for a deferred retirement at 62, as explained above.
• If you’re at your MRA with at least 10 years but less than 30 years of service, you’re eligible for an immediate, reduced FERS retirement benefit with the age penalty applied. You are also eligible to receive credit for your unused sick leave balance and the calculation is the same as above.
• If you’re at your MRA with at least 10 years but less than 20 years of service, if you wait until age 62 to apply the retirement benefit, the age reduction penalty will be eliminated.

For all questions on retirement, send emails to: RetireeQandA@apwu.org.

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