What is the 2019 Maximum Annuity Supplement?

Calculating the FERS annuity supplement is a complex process. The author provides an explanation and example.

The answer to this question should be easy. It is just arithmetic, after all. 

But it is not easy, because calculation of the annuity supplement is quite intricate and lengthy. The supplement is not related to, and not administered by, the Social Security Administration, but it uses elements of the SSA algorithm. 


  • The calculation uses FERS basic salaries paid over an employee’s entire career, capped by a Social Security maximum for each year. It “indexes” these salaries for growth in line with the official “average total wages” (ATW) for 2017. Social Security insists on 35 years earnings, while the supplement does not. Note:  by law, calculation of the supplement requeires a salary – actual or deemed – for all years from age 22 through the year before retirement.     
  • Deeming. SSA does not do deeming. Before indexing, for any years where the employee was not on the payroll for the entire year, the salary must be deemed. To do this, divide the salary for the first, full year of FERS service by the average total wages for the year; then multiply the average total wages for each year to be deemed by the resulting fraction (known as the earnings ratio).
  • To index, multiply each individual salary by the index figure for the year. The index for the year is calculated by dividing the 2017 ATW by the ATW for the specific year. Prior to adding these deemed, indexed figures, find and delete the five lowest – SSA does not always delete. Then do the addition.  After that, divide the total by the number of months in the years used.
  • The result is the AIME, or Average Indexed Monthly Earnings. Now apply the three tier, 2019 Social Security formula for determining the PIA, or Primary Insurance Amount. Then reduce the PIA in accordance with number of years retiree is below the full retirement age. Divide the reduced benefit by 40 and multiply the result by number of years (rounded) of FERS service. SSA does not do this, either. You have just calculated the FERS annuity supplement.

In view of the above, is it any wonder our friends at OPM need an average of three hours per case to do one calculation? Are you surprised that, when doing “estimates,” nearly all experts on Federal retirement take refuge in the simplistic, unreliable Social Security short cut? (Divide the latest Social Security estimate for your age 62 retirement by 40, then multiply by FERS years.)

This estimate-based-on-an-estimate assumes you will continue working and start Social Security at 62. Considering the annuity supplement starts at retirement and ends at age 62, this is problematic and unsound. Also, unlike OPM, Social Security gives full credit for any non-FERS earnings, which are not part of the supplement. These differences mean the quick and dirty estimate – used only because there is no known alternative – is misleadingly high.

Returning to the original question, the maximum annuity supplement for a 2019 retirement is $2,078 per month. This is based on birth year 1957, first full year of FERS service 1983, 37 years service, and maximum earnings each year. Other age and service combinations have also been accurately computed – see below.  

FERS Annuity Supplement: 2019

Maximum at various ages and service times

Ref: Chapter 51, CSRS & FERS Handbook

Birth FERS – Age Reduction – Years
Year Years* Earnings PIA** Percent Reduced Proration Supplement
1957 37 $4,324,331 $3,030 74.1666 $2,247 92.5% $2,078
1957 35 $4,324,331 $3,030 74.1666 $2, 247 87.5% $1,966
1957 31 $4,324,331 $3,030 74.1666 $2, 247 77.5% $1,741
1957 27*** $4,324,331 $3,030 74.1666 $2, 247 67.5% $1,516
1959 37 $4,088,555 $3,035 72.5 $2,200 92.5% $2,035
1959 35 $4,088,555 $3,035 72.5 $2,200 87.5% $1,925
1959 31 $4,088,555 $3,035 72.5 $2,200 77.5% $1,705
1959 27 $4,088,555 $3,035 72.5 $2,200 67.5% $1,485
1961 37 $3,850,845 $3,039 70.833 $2,152 92.5% $1,990
1961 35 $3,850,845 $3,039 70.833 $2,152 87.5% $1,883
1961 31 $3,850,845 $3,039 70.833 $2,152 77.5% $1,667
1961 27 $3,850,845 $3,039 70.833 $2,152 67.5% $1,452

Above calculations performed with proprietary software from: fedbens@aol.com

* Years include months before first full year and after 2018, if the total, rounded, yields one additional year.  Example: from 5/14/82 to 7/23/19 is 37 years.

** PIA = Primary Insurance Amount.  PIA bend points for 2019 are $926 and $5,583.  Max earnings and average total wages, by year, are at: www.ssa.gov 

*** Retirement with fewer than 30 FERS years is possible at age 60 or 61, or for law enforcement/fire fighters, or when there is military service, or when an ‘early out’ is authorized.

About the Author

Robert Benson served 35 years in various Federal agencies, as both a management analyst and IT specialist. He is a graduate of Northwestern University.