You’ve worked hard and served the American people well for many years. In fact, you’ve dedicated your life to your federal job.
Unfortunately, you now find yourself disabled. You can no longer perform the work that supported you and your family. You’ve probably already applied for a disability retirement, and now you wonder…
Like everything else relating to the government, determining your pay is complicated, and that makes errors possible. For that reason, you should check the Office of Personnel Management’s (OPM) work. To do that, you need to understand how that organization calculates the amount of your pension. Don’t worry, though, because we provide many examples to clarify things, so let’s begin.
Assuming you’re eligible for a disability retirement, this is how the OPM determines how much you will receive. To start, it depends on your age.
If you become disabled when you are at least 62 years old, you will get your annuity based on FERS’s non-disability retirement computations. Assuming you’ve worked under FERS for less than 20 years, you get 1% of your high-3 salary times the number of years worked. On the other hand, if you’ve toiled for at least 20 years, you will receive 1.1% of your high-3 salary times the number of years worked.
To determine your “high-3,” add the amount you earned during each of your highest-salary years, and then divide that total by three.
If you meet the age and service requirements for immediate, voluntary, non-disability retirement, calculate your annuity as described above even if you aren’t yet 62 years old. This site describes those conditions in detail.
If you don’t meet both the age and service mandates for regular retirement, the OPM will calculate the amount of disability retirement pay you’ll receive three times; the first year after you retire, the period between the second year and your 62nd birthday and after you reach 62.
For the first year, you will receive 60% of your high-3 salary minus 100% of your Social Security Disability Insurance (SSDI) if you’re eligible to receive it. Let’s look at an example. Say your average high-3 salary is $50,000, and you receive $10,000 per year SSDI. Sixty percent of $50,000 is $30,000. $30,000 minus $10,000, which amounts to 100% of your SSDI, equals $20,000. The person in this example, then, receives $20,000 disability retirement and $10,000 SSDI the first year.
In this example, you’ll simply obtain a first-year disability pension of $30,000 if you don’t qualify for SSDI.
After your first year, the OPM offers two ways to calculate your annuity, and you get the highest amount.
First, determine your pension amount as follows:
Take 40% of your high-3. In the previous example, that’s 0.4*$50,000, or $20,000.
Take 60% of your SSDI. In the previous example, that’s 0.6*$10,000, or $6,000.
Subtract #2, from #1. In the example, the government will reduce your annual annuity from $20,000 to $14,000 ($20,000 – $6,000). In this example, you would receive a $14,000 disability pension plus $10,000 for SSDI, or $24,000.
If you don’t get SSDI, you will simply get 40% of your high-3.
Second, calculate your annuity by taking 1% of your high-3 salary, and then multiple it by the number of years you’ve worked in the government.
Determine your annuity both ways, and you will get the highest amount.
In the example, let’s say the person worked for 19 years, and her high-3 average is $50,000. One percent of $50,000 is $500. $500 times 19 is $9,500. Since the person in the example obtains $14,000 in the first calculation and only $9,500 in the second, she receives the highest amount, or $14,000.
Basically, you get the annuity you would have received had you worked until they day before you reached 62, and then took a non-disability retirement. If you had less than 20 years of service at the day before 62, you would receive 1% of the average high-3 times the years served, and if you had worked at least 20 years, you would receive 1.1% of your high-3 times the number of years served.
For example, let’s say you retired on a disability pension when you were 55 years old and had 19 years of service at that time. You’re now 62, so you would have had 26 years (19 + 7) had you continued to work. In that case, at 62 years of age you would get 1.1% of your high-3 times 26 years.
You now may be wondering…
You may not receive your check for awhile after the OPM approves your disability retirement because first, your employing agency must tell the Office of Personnel Management the date it separated you, and it also needs to give that agency your final retirement records.
In the meantime, the government sometimes provides interim disability retirement pay before it determines the final amount you will receive. The OPM does this only after it has already approved your claim, it has a copy of your application for SSDI and your employing agency has told that agency the date it stopped paying you.
In addition, you may want to know more about the attorney who might help you with these issues. If so, you may find information about Stephanie Leet here. (Direct the reader to the article about Stephanie.)
In any case, we’re here to help. Simply call us at …. and we’ll give you a free, friendly, no obligation consultation.
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