What Are FERS Benefits?

Submitted by Shane on

Federal Employee Retirement System (FERS) benefits are a type of government benefit payment available only to federal employees upon reaching retirement. It is not, as is sometimes mistaken, a type of Social Security Disability program. There is a completely separate provision for disability benefits under FERS.

Basic FERS benefits consist of three parts: a pension, Social Security, and Thrift Savings Plan. The pension part of FERS is a set amount of money based on certain factors and is available at different ages based on which plan is chosen. There are several plans that include early retirement. The Social Security part of FERS benefits is the same as it is for non-federal employees – beneficiaries must reach age 62 or be an eligible widow to receive benefits, which are a set amount determined by your working years and contributions. Lastly, the Thrift Savings Plan functions much like a non-federal employee’s 401K plan. Deductions are made into the account on a pre-tax basis and the yield is determined by the types of investments that are made and how well they perform.

As stated, FERS is not a part of the Social Security Disability program. The only part of FERS benefits that involves Social Security at all is the regular Social Security wages received when you reach age 62 or become a qualifying widow or widower. FERS does, however, have a provision of its own for disability benefits.

In order to be eligible for FERS disability benefits, federal employees must have been employed as a civilian for at least 18 months. You must also have already applied, or apply at the same time for Social Security Disability, and prove that you are not eligible for that program. Basically, if you are a federal employee, FERS picks you up wherever Social Security Disability leaves off.

The determination of disability is very different between FERS and Social Security Disability. FERS requires only that you prove you are unable to perform your current job. The much stricter definition of disability with Social Security Disability requires is proof that you are unable to perform any job. So even if you are a federal employee who has contributed enough to Social Security to qualify for SSDI, you may not qualify based on your ability to complete other jobs and thereby be directed back to FERS disability.

Calculation of FERS disability payments is tricky. This is because payments are calculated considering what other Social Security disability benefits you may be receiving. The first year you receive FERS disability income uses a different formula than subsequent years, but basically supplements whatever Social Security Disability you are receiving.

Understanding the difference between FERS and Social Security Disability does not have to be hard or complicated. Federal employees can view these two disability programs as a tag team – when Social Security Disability is unable to help, FERS picks up the slack and carries you through. Because non-federal employees are not eligible for FERS benefits, the program will have no effect on disability benefits received through Social Security.

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