Q. I’m a FERS employee working for the Environmental Protection Agency. I have accepted the VERA/VSIP offer and am wondering when to set the effective date of my retirement. The agency has set the final day to leave as September 2, the end of a pay period. Somewhere I heard that it is best for a FERS employee to leave at the end of the month; what should I do?
A. Leave on August 31, not September 2.
If you are covered by the FERS retirement system, your annuity begins to accrue on the first day of the month following your last day on the rolls. If you were to retire on the last day of the pay period (September 2), your FERS annuity would begin to accrue on October 1 and you would receive payment on November 1 – almost two full months after your last day on the rolls.
However, if you retire on August 31, your FERS annuity will begin to accrue on September 1 and you would receive your payment on October 1. The only people you make happy by retiring at the end of the pay period on September 2 will be those who work in payroll.
Readers should note that this answer is for an employee covered under the FERS retirement system. An employee under CSRS could retire on September 2 and their annuity would begin to accrue on September 3. The CSRS retiree would receive a pro-rated annuity (for the period September 3 through September 30) on October 1.