When to apply for retirement benefits, CSRS and FERS, separated before MRA?

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Separated before MRA, 17 years under FERS plus 5 years frozen under CSRS. You do not need any income at the moment, is there an advantage in applying for a CSRS pension before age 62? Can the FERS pension be claimed at a time other than the CSRS? Is it better to apply for the FERS pension at the MRA (56-59), or to wait? How long can you wait (CSRS will start automatically at age 62, can FERS be deferred beyond age 62?)?

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Private response

When you are vested with CSRS, i.e. you have had 5 years or more and then elected FERS, you are FERS for retirement purposes with a CSRS component. This means that you must retire using the FERS age and service requirements, but your retirement will be calculated using the CSRS formula for frozen time under CSRS and time under FERS will be calculated using of the FERS formula, these two amounts will be added to ensure your FERS pension. OPM uses the same high-3 for both components. Survivor benefits will be taken from the total amount using the maximum FERS benefit of 50% or the partial benefit of 25% if chosen. You cannot split these two benefits just because you worked under both plans. Since you separated before reaching your MRA, the minimum retirement age, your only retirement option is called deferred retirement.
Deferred retirement does not allow you to reinstate your FEHB when your retirement benefits begin, there is no credit for any unused sick leave and no FERS retiree pension supplement will be payable. Your retirement will be based on your years/months of valid service and your high average salary on the date you left federal service. Because you are FERS with a CSRS component and have more than 20 years of combined service, you are eligible for this benefit without an age penalty at age 60. If you choose to retire at your MRA, the full calculation will be the age penalty of 5% for each year you are under 62. This would be a permanent reduction for life.
No retirement is automatic from the OPM, you must apply for it.
What’s best for you… is a decision you’ll have to make.

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Private response

Thanks – I had read on the OPM website that CSRS would automatically start at age 62, this must be for people who never chose to go to FERS. So given that I am FERS with a CSRS section, am I only filling out the FERS application? I’ll be 60 next year, if there’s no age reduction (and no deferred credit like Social Security to postpone it) I can just go ahead and claim it. I will see my high 3% reduced for excess CNP (for completing my degree while I was co-op under CSRS) and for part-time work under FERS after the birth of my children (plus a few CNPs the year last before my resignation). Does the 20 years of service still apply if my CSRS is adjusted to something like 3×1.5% instead of 5×1.5% and FERS is adjusted to 15.5×1% instead of 17×1%? Does WEP based on CSRS component apply to reduce my social security benefits if I elected to change in 1987 and have more than 5 years of FERS (SSA website does not was unclear whether the exemption applied to any vested CSRS pension or only to those who were covered by FERS only and elected not to remain vested in CSRS for part of their service)?

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