The other day I had a question from a reader about how the 2019 retiree cost of living adjustment (COLA) would affect him, as he was a FERS Transferee. Most FERS transferees (those who transferred to FERS during one of the two open seasons, or after returning to federal service) have retired by now.
A FERS transferee would receive both a CSRS annuity (covering the years s/he worked under CSRS) and a FERS annuity (covering the years s/he worked under FERS); they would be combined into one monthly payment.
Here’s an example of how the annuity would be calculated for a FERS transferee. An employee left federal service after spending 15 years under CSRS and, upon his return to federal service, elected to be covered under FERS. He retired after having worked an additional 18 years under FERS. This employee left with a high-three salary of $75,000.
| Years of service | Percentage factor | Amount |
|---|---|---|
| 15 years of CSRS | 26.25% | $19,687.50 |
| 18 years of FERS |
18% at the 1% factor 19.8% at the 1.1% factor |
$13,500 $14,850 |
| Total pension |
If FERS time = 1% If FERS time = 1.1% |
$33,187.50 $34,537.50 |
The CSRS part of the pension would receive CSRS cost-of-living adjustments, while the FERS part would receive FERS cost-of-living adjustments.
For 2019, that would mean that the CSRS part of the annuity would receive the full 2.8% COLA and the FERS portion might receive a 2% COLA (if the Consumer Price Index increase is between 2% and 3%, FERS COLAs are limited to 2%). The reason that I said the FERS portion of the annuity might receive a COLA is that, unless you are a special category employee, you must be age 62 or older to be eligible for the FERS COLA.
Survivor benefits would be based strictly on FERS rules. Rules for any deposit service, redeposit service and military deposits would be based on when the service took place.
