Federal Worker Disability Retirement: Projecting Forward

Last Updated on January 27, 2023

In preparing, formulating and filing a Federal Disability Retirement application under either the CSRS or FERS system (while the original statutory references and case-laws applying to each Federal retirement system may be different, the basic substantive laws governing each are essentially identical), it is important always to project forward, to prepare for different eventualities, and to consider the options so that events don’t take total control, as opposed to the Federal or Postal personnel (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 application approval of a Federal Employee or Postal Disability Retirement claim with 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 or Civil 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 with an scheduled 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 important questions when planning for the projected future, forward.

Sincerely,

Robert R. McGill, Esquire