How to Calculate a Deferred FERS Retirement Annuity

Any federal employee hired after 1987 has the Federal Employment Retirement System annuity available based on years of service and income. Those hired prior to 1987 were part of the Civil Service Retirement System. Those who were part of the CSRS annuity program were allowed to convert to FERS. FERS uses a lower factor to compute the annuity than CSRS, but the previous system had more limitations on changing employers and growing annuities. If you have both, you need to compute the FERS component separately.

Get the highest three years of annual income you made while in service. Add them together and divide by three. This is called the high-3 average.

Choose the factor that applies to you. Retirees under the age of 62 at the time of separation or 62 years or older with less than 20 years of service, use a 1 percent factor. Those over 62 with more than 20 years of service, use a 1.1 percent factor. Certain jobs have higher factors such as police, firemen, air traffic controllers, who use up to a 1.7 percent factor. Speak with your human resources controller if you are unsure what factor to use.

Multiply your high-3 average by the factor. Assume you have a $42,000 high-3 average with a 1.1 percent factor: $42,000 x 0.011 = $462.

Add your high-3 and the factored result together to get the annual annuity payment: $42,000 + $462 = $42,462. The result is $3,538.50 in monthly FERS annuity income.


  • CSRS uses the same calculation with different factors. The first five years of service have a 1.5 percent factor, the next five to 10 years use 1.75 percent as the factor and 2 percent is the factor for service over 10 years, regardless of age.