In preparing, formulating and filing a Federal Disability Retirement application under either FERS or CSRS (while the statutory references and case-laws applying to each retirement system may be different, the basic substantive laws governing each are essentially identical), it is important always to project forward, to prepare for the eventuality, and to consider the options so that events don’t take control, as opposed to the Federal or Postal Worker (to the extent possible) maintaining control of the present and future events as they unfold, with the multiple and varied contingencies which can reasonably be predicted.
For instance, upon an approval of a Federal Disability Retirement application from the Office of Personnel Management, the rate of annuity compensation begins at 60% of the average of one’s highest three consecutive years of service. That first year, then, should be looked upon as a “transition” period for the Federal or Postal worker — with the full knowledge that in the following and subsequent years, the annuity will drop down to (and remain until age 62, when the disability retirement annuity becomes recalculated and converted administratively into a regular retirement, based upon the total number of years of Federal service, including the time on Federal Disability Retirement) to 40% of the average of one’s highest three consecutive years of pay.
That being said, viewing the first year of annuity payments as a “transition” year means that one should be projecting forward as to what one will do in the following and subsequent years. What kind of work will one do? How will you make up the difference and reduction in annuity payments? What preparations are or will be made for the reduction? Will supplemental income be needed? Will it be part-time or full-time? What is the maximum allowable earned income which one can receive? These are all transition questions which are important in planning for the projected future, forward.
Robert R. McGill, Esquire