U.S. Code of Federal Regulations
Regulations most recently checked for updates: Oct 04, 2023
This subpart regulates the annuity supplement payable to eligible employees under sections 8421 and 8421(a) of title 5, United State Code.
In this subpart—
Age 62 means the day before an individual's sixty-second birthday.
Annuity Supplement means the monthly benefit described in § 842.504.
Applicable exempt amount and earnings have the same meanings as in section 203 of the Social Security Act.
Excess earnings means 50 percent of an individual's earnings which exceed the applicable exempt amount during a calendar year or, if less, an amount equal to the total annuity supplement paid to the individual in that year, but does not include earnings prior to an individual's attainment of the minimum retirement age.
FERS means chapter 84 of title 5, United States Code.
Minimum retirement age has the same meaning as in § 842.202.
Test year means the calendar year immediately before the one in which any reductions required by 5 U.S.C. 8421a and § 842.505 are applied.
(a) Except as provided in paragraph (b) of this section, an employee or Member receiving an annuity under any of the following sections is entitled to receive an annuity supplement:
(1) Section 842.204(a)(1) if the employee or Member has completed at least 30 years of service;
(2) Section 842.204(a)(2) governing retirement at age 60 with 20 years of service;
(3) Section 842.205 governing retirement at age 50 with 20 years of service or at any age during a major reorganization or reduction in force;
(4) Section 842.206 governing discontinued service retirement;
(5) Section 842.07 governing early retirement for air traffic controllers;
(6) Section 842.208 governing early retirement for law enforcement officers;
(7) Section 842.209 governing early retirement for Members of Congress;
(8) Section 842.210 governing early retirement for military reserve technicians; or
(9) Section 842.211 governing early retirement for members of the Senior Executive Service.
(b) An employee or Member who retires under any of the following sections before attaining the minimum retirement age is not entitled to receive an annuity supplement until he or she attains that age:
(1) Section 842.205;
(2) Section 842.206;
(3) Section 842.209; or
(4) Section 842.211, except that an individual entitled to an annuity under 5 U.S.C. 8414(a) for failure to be recertified as a senior executive shall be entitled to an annuity supplement without regard to the minimum retirement age.
(c) An employee or Member ceases to be entitled to an annuity supplement on the earlier of—
(1) The last day of the month in which the individual becomes age 62; or
(2) The last day of the month before the first month for which the individual would, upon proper application, be entitled to social security benefits.
(a) Subject to paragraph (b) of this section, an annuity supplement is an amount equal to the old-age insurance benefit payable under title II of the Social Security Act, multiplied by a fraction—
(1) The numerator of which is the annuitant's total service creditable under FERS, excluding military service not performed during an absence of leave without pay from civilian service, rounded to the nearest whole number of years not exceeding 40 years; and
(2) The denominator of which is 40.
(b)(1) The benefit referred to in paragraph (a) of this section is computed—
(i) As if the annuitant were age 62 and fully insured on January 1 of the year the annuity supplement commences;
(ii) Without regard to the Social Security earnings test (section 203 of the Social Security Act);
(iii) Without regard to the Social Security windfall elimination provisions (sections 215(a)(7) and 215(d)(5) of the Social Security Act); and
(iv) Using the actuarial reduction (section 202(q) of the Social Security Act) prescribed in the following table:
|Year of Birth||Reduction (percent)|
|1937 and before||20|
|1960 and later||30|
(2) In computing the primary insurance amount—
(i) The number of elapsed years used to compute the number of benefit computation years does not include the years beginning with the year in which the annuity supplement commences;
(ii) For an employee or Member who retires under §§ 842.205, 842.206, 842.209, or 842.211 before reaching the minimum retirement age, wages in calendar years beginning after the date of separation on which the retirement is based, are deemed to be zero.
(iii) Only basic pay for full calendar years of service creditable under FERS is taken into account in computing the retiree's wages for a benefit computation year;
(iv) For a benefit computation year after age 21 during which the retiree did not perform a full calendar year of service creditable under FERS the retiree's wages are deemed to equal the product of—
(A) The National Average Wage Index (as determined by the Commissioner of the Social Security Administration) corresponding to that year, multiplied by
(B) A fraction—
(1) The numerator of which is the retiree's basic pay for his or her first full year of service creditable under FERS; and
(2) The denominator of which is the National Average Wage Index (as determined by the Commissioner of the Social Security Administration) corresponding to the retiree's first full year of service creditable under FERS.
(a)(1) Except as provided in paragraphs (a)(2) and (b) of this section, the annuity supplement payable under § 842.504 is reduced by excess earnings in the test year, divided by twelve.
(2) Any annuity supplement payable during the year in which an individual loses entitlement to the annuity supplement by reason of § 842.503(c) is reduced by excess earnings in the test year divided by the number of months for which the annuity supplement is payable.
(b) Any reduction in the annuity supplement during a month because of excess earnings may not exceed the amount of annuity supplement payable during that month.
(c) Earnings and estimated earnings for each test year will be furnished by retirees in a form prescribed by OPM.
(d) Failure to furnish earnings and estimated earnings in the form or at the times prescribed by OPM is cause to suspend payment of the supplement until the annuitant establishes to the satisfaction of OPM that he/she continues to be eligible for the supplement.
(e) The reductions described in paragraphs (a) and (b) of this section are not subject to the due process procedures described in 5 U.S.C. 8461(e).