Will the FERS Supplement Survive? (What You Need to Know)

FERS Supplement Money

If you’re a federal employee working in the United States, you’ve likely heard about the FERS supplement. This special supplement, also erroneously referred to as the ‘Social Security Supplement’ or ‘Bridge’, is designed to give those who have earned a full FERS retirement an extra source of income. 

In recent years, however, Congress has talked of eliminating this supplement altogether. 

If you haven’t heard of it, this article will briefly detail what it is, who it’s for, and what happens if it ends up being taken out of the federal benefits package. 

What is the FERS Supplement?

The Federal Employee Retirement System (FERS) supplement is a special retirement supplement paid out to those who have not yet reached the eligible age to receive social security benefits. 

Essentially, this supplement was created to closely mirror your future Social Security earnings so that the amount you receive per month from the government stays roughly the same until you die. This supplement is available only to those younger than 62.

To be eligible to receive it, there are a few criteria you must meet. According to OPM (the Office of Personnel Management), you must:

  • Be at your MRA (minimum retirement age), at age 60, or be eligible for Special Provisions at age 50.
  • Not take a deferred retirement (in other words, your FERS annuity payments must start within 30 days of your retirement date)
  • Be at least age 60 with 20 years of creditable service or be at your MRA with at least 30 years of creditable service
  • Not be a CSRS (Civil Service Retirement System) employee

It is also important to note that these requirements may be a little different for those with special provisions, such as law enforcement officers, firefighters, or air traffic controllers. Other special provisions employees include capital police, supreme court police, and nuclear materials couriers. For these groups of people, you must have at least 25 years of service at any age, or have at least 20 years of service and be of age 60. 

If you are eligible, however, there’s no need to fill out any paperwork to receive it—it will be automatically applied once you retire. Then, at age 62, you will become eligible for social security and will stop seeing payments from the FERS supplement. 

Will the FERS Supplement Survive?

Recently, Congress has been discussing the possibility of doing away with the FERS supplement. Right now, it’s questionable whether the FERS supplement will survive or not, though it is still currently in place as of the publishing date of this article. 

The Recent FERS Supplement History

This isn’t the first time Congress has tried to eliminate the FERS annuity supplement. In fact, in recent years, it’s been an almost yearly occurrence. 

It appears that this happens because of the yearly budget that Congress must make and have approved. Generally, the $4.8 trillion budget includes some sort of provision that tries to reduce or do away with certain federal employee benefits, though not many of them make it past the drawing board. 

Over the last five years or so, however, the victim of these proposed budget cuts has been the current FERS supplement. Congress states that this supplement is “unfair” to those who work in the private sector because they can retire before the eligible retirement age, and no such supplement is provided to them. 

It’s also usually packaged with requests to change the current annuity formula from a high-three average to a high-five average, as well as eliminate the cost of living adjustments federal employees are typically eligible for. 

As of right now, it’s unclear whether the supplement will remain intact in future years or whether Congress will finally do away with it. After all, it’s up for elimination from the federal benefits package nearly every year. So, it stands to reason that there’s a fifty-fifty chance it may happen at some point. 

If the FERS Supplement Doesn’t Survive, What Happens? 

The answer to this question is fairly simple. If the FERS supplement doesn’t survive, then that’s exactly what happens: it doesn’t survive. 

It would definitely be nice to hear that Congress would likely replace it with something else or take some measure to offset the financial deficit it would be causing to government employees. However, the sad truth is that if it were eliminated, it would be due to budget cuts. That means that there likely wouldn’t be any replacement for it. 

However, there is something that you, as a federal government employee, can do. 

Pay more wages into your TSP

Your Thrift Savings Plan (TSP) is something that you pay into, so the money in it isn’t something the government can just take. This means that, by increasing the amounts you’re paying into it, you can effectively raise the payouts you receive at retirement. 

There’s no guarantee that this will be equal to or greater than the amount you would lose in not receiving the FERS supplement, but it would do a great deal to offset your financial burden. 

By doing that, not only can you have a tangible backup plan in case Congress suddenly decides that the FERS supplement is no more, but you can also spend your time and mental energy taking actions that are available to you instead of worrying about things you won’t be able to change. 

After all, if Congress does decide to do away with the supplement, what can you do to stop them? 

Sadly, not much. 

But you can plan for the future. 

Conclusion

The FERS supplement is a useful retirement pension supplement used to mirror the Social Security Benefits paid out at age 62 and is available to those who retire before that age with an immediate annuity. 

Recently, though, Congress has hinted that this supplement, while incredibly useful, may not be around forever. 

That isn’t a reason to fret, however.

There are several things you can do to offset the financial burden of not having the special supplement, such as paying more money per year into your TSP. If you have questions about setting up your TSP or would like help planning for the uncertain time ahead, we recommend contacting one of our dedicated retirement planners for assistance. 

At Federal Benefit Advisory, we are here to help you retire comfortably and securely, so don’t be afraid to reach out today. 

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