LEO and FERS Basic Annuity
Law Enforcement Officers (LEOs) fall under special retirement provisions which make them eligible for an Annuity during their retirement. Although there are other categories of employees who also fall under these Annuity provisions (i.e. Firefighters, Air Traffic Controllers, and Nuclear Materials Couriers) LEO requirements also have some unique provisions that may require LEOs to approach their unique retirement benefits from a different angle.
The FERS basic annuity formula (which is the annuity formula used by LEOs today) is generally calculated as follows: If you are eligible under FERS and also under age 62 when you retire or 62 years of age or older with less than a 20 year tenure, 1 percent of your high-3 average salary for each year of service is calculated. At age 62 or older with 20 plus years of service, then the formula is 1.1 percent of the high-3 average salary based on each year of service.
Law Enforcement Officers covered under FERS will use the formula of 1.7 percent of their high-3 average salary multiplied by the years of service that do not exceeed 20. In addition, 1 percent of the high-3 average salary is again multiplied by all years of service beyond 20 years.
In summary the FERS LEO annuity formula employs a two-step procedure. Service up to 20 years is calculated at 1.7 percent of the high-3 average salary. Any years worked beyond 20 years is calculated at 1 percent of the high-3 average salary. The calculations are added together or combined to arrive at the FERS LEO Basic Annuity.
There is more to discuss relevant to non-disability retirement annuity formulas and calculations. We will stop here and discuss the other facets of the calculations in an upcoming post.
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