Chapter 51. Retiree Annuity Supplement i

CSRS and FERS Handbook March 2022 

Chapter 51. Retiree Annuity Supplement

Table of Contents 

Chapter 51. Retiree Annuity Supplement ........................................................................................ i

Subchapter 51A. FERS ............................................................................................................... 1

Part 51A1. General Information ............................................................................................. 1

Subpart 51A1.1. Overview ................................................................................................. 1

Section 51A1.1-1. Introduction and Organization .......................................................... 1

A. Introduction ........................................................................................................ 1

B. Topics Covered ................................................................................................... 1

C. Organization of Subchapter ................................................................................ 2

D. Statement of Authority ....................................................................................... 2

Section 51A1.1-2. Definitions ........................................................................................ 3

A. National Average Wage Index ........................................................................... 3

B. Minimum Age Requirement (MRA) .................................................................. 3

Section 51A1.1-3. Eligibility for the Retiree Annuity Supplement ................................ 4

A. Individuals Immediately Eligible for the Retiree Annuity Supplement at 

Retirement .......................................................................................................... 4

B. Individuals Not Immediately Eligible for the Retiree Annuity Supplement ...... 4

C. Individuals Not Eligible for the Retiree Annuity Supplement ........................... 4

D. Requirement of One Calendar Year of FERS Service ....................................... 5

E. Duration of the Retiree Annuity Supplement ..................................................... 5

Part 51A2. Computation of the Retiree Annuity Supplement ................................................ 6

Subpart 51A2.1 Constructing Earnings History ................................................................. 6

Section 52A2.1-1 Rules .................................................................................................. 6

A. General ............................................................................................................... 6

B. Earnings History/Elapsed Years ......................................................................... 6

C. Actual Pay .......................................................................................................... 6

D. Deemed Pay ........................................................................................................ 7

E. Earnings in Year of Separation .......................................................................... 8

F. Earnings in Year of Separation .......................................................................... 8

Subpart 51A2.2 Determining the Benefit Computation Years ........................................... 9

Section 52A2.2-1 Rules .................................................................................................. 9

A. General ............................................................................................................... 9

B. Procedure ............................................................................................................ 9

Subpart 51A2.3 Determining the Benefit Computation Years ......................................... 10

Section 52A2.3-1 Rules ................................................................................................ 10

A. General ............................................................................................................. 10

B. Average Indexed Monthly Earnings (AIME)................................................... 10

C. Primary Insurance Amount (PIA) .................................................................... 10

D. Amount of Retiree Annuity Supplement .......................................................... 11

Part 51A3. Reduction in Retiree Annuity Supplement Due to Excess Earnings .................. 12

Subpart 51A3.1 Reduction Due to Excess Earnings ......................................................... 12

Section 52A3.1-1 Rules ................................................................................................ 12

A. General ............................................................................................................. 12
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B. Exempt Amount ............................................................................................... 12

C. Amount of Reduction ....................................................................................... 12

D. When Reduction is Assessed ............................................................................ 13

E. Reporting Earnings to OPM ............................................................................. 13

Part 51A4 Advice to Employee ............................................................................................... 15

Subpart 51A4.1 Reduction Due to Excess Earnings ......................................................... 15

Section 51A4.1-1 Rules ................................................................................................ 15

A. Duration of Retiree Annuity Supplement ......................................................... 15

B. Earnings Reduction .......................................................................................... 15

C. COLA's ............................................................................................................. 15

Subchapter 51B Job Aids ......................................................................................................... 16

Part 51B1 Annuity Supplement Job Aidss .......................................................................... 16

Subpart 51B1.1 Tables ..................................................................................................... 16

Section 51B1.1-1 Tables .............................................................................................. 16

Section 51B1.1-2 Table A............................................................................................ 17

Section 51B1.1-3 Table B ............................................................................................ 18

Section 51B1.1-4 Table C ............................................................................................ 19

Section 51B1.1-5 Table D............................................................................................ 20

Section 51B1.1-6 Table E ............................................................................................ 23

Subpart 51B1.2 Worksheets............................................................................................. 24

Section 51B1.2-1 Blank Computation Worksheets for Local Reproduction............... 24

Subpart 51B1.3 Computation........................................................................................... 29

Section 51B1.3-1 Computation Examples ................................................................... 29

Section 51B1.3-2 Example 1 ....................................................................................... 30

Section 51B1.3-3 Example 2 ....................................................................................... 33

Section 51B1.3-4 Example 3 ....................................................................................... 36
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Subchapter 51A. FERS 

Part 51A1. General Information 

Subpart 51A1.1. Overview 

Section 51A1.1-1. Introduction and Organization 

A. Introduction 

Chapter 51 explains the rules regarding eligibility for and computation of the retiree annuity 

supplement under FERS. 

The retiree annuity supplement is a benefit paid until age 62 to certain FERS employees who 

retire before age 62 and who are entitled to an immediate annuity. The supplement approximates the 

value of FERS service in a Social Security benefit. The general purpose of the supplement is to 

provide a portion of income before age 62 similar to what the retiree would have received in a Social 

Security benefit had the retiree attained age 62 and applied for Social Security benefits. 

The formula used to compute the supplement is different from the formulas used to compute other 

benefits paid by OPM because it is an adaptation of the Social Security benefits formula. The key 

differences between the Social Security calculation and the FERS Annuity Supplement are that 

Social Security uses actual earnings not deemed earnings to compute a Social Security benefit, and 

Social Security includes all of a worker’s years of employment in order to compute earnings, not just 

time worked as a Federal employee. 

To compute an annuity supplement, you must complete the following steps: First, create a "full 

career" earnings history using the employee's basic pay during civilian service that is creditable 

under FERS and deemed wages for years after the employee turned 21 and before the first full year 

of FERS service. Second, update the earnings history for inflation. Third, compute the supplement, 

using the same formula that would be used by the Social Security Administration to compute a 

Social Security benefit, including the maximum reduction for early retirement under Social Security. 

Fourth, multiply the result of the third step by a fraction to approximate the proportion of a full 

career Social Security benefit earned under FERS. (See Section 51A2 on how to compute the retiree 

annuity supplement). 

The supplement, like Social Security benefits, may be reduced if a retiree has excess outside 

earnings. Consequently, OPM must reduce the amount paid when outside earnings exceed the 

maximum permissible exempt amount. 

The retiree annuity supplement is unique to FERS -- there is no comparable benefit for CSRS 

employees. Therefore, there is no CSRS subchapter on the retiree annuity supplement. 

B. Topics Covered 

This Chapter covers --

- Eligibility for the retiree annuity supplement;

- Computation of the retiree annuity supplement;

- The reduction that is applied to the retiree annuity supplement due to excess earnings over the 

exempt amount;

- The requirement that retirees report their earnings to OPM annually; and
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- Advice the agency should provide retiring employees about the retiree annuity supplement. 

C. Organization of Subchapter 

This subchapter has four parts. 

Part Name of Part Page 

51A1 General Information 1 

51A2 Computation of the Retiree Annuity 

Supplement 

7 

51A3 Reduction in Retiree Annuity Supplement 

Due to Excess Earnings 

15

51A4 Advice to Employee 19

D. Statement of Authority 

This chapter and its contents are based on the laws and regulations cited below. 

- sections 8421 and 8421a of title 5, United States Code 

- subpart E of part 842 of title 5, Code of Federal Regulations. 
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Section 51A1.1-2. Definitions 

A. National Average Wage Index 

The National Average Wage index (previously referred to as the Average Total Wages (ATW)) is a 

figure published annually by the Social Security Administration representing average wages of all workers 

based on earnings reported on Form W-2. The calculation of the indexed wages ensures that a worker’s 

future benefits reflect the general rise in the standard of living that occurred during his or her working 

lifetime and is used to compute the estimated Social Security benefit that the retiree would receive from 

the Social Security Administration. (See section 51B1.1-3.)

B. Minimum Age Requirement (MRA) 

The MRA is the earliest retirement age at which a FERS employee may retire voluntarily or elect to 

receive benefits if separated from Federal service after performing at least 10 years of service. It ranges 

from age 55 to age 57, depending on an employee's year of birth. For employees born before 1948, the 

MRA is 55. (See section 42A1.1-2, paragraph D, in Chapter 42.)
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Section 51A1.1-3. Eligibility for the Retiree Annuity Supplement 

A. Individuals Immediately Eligible for the Retiree Annuity Supplement at Retirement

An individual is immediately eligible for the annuity supplement at time of retirement if he/she –

1. Has as at least 1 calendar year of FERS service (see paragraph D); and

2. Retires with entitlement to an immediate annuity --

- At or after the MRA with at least 30 years of service;

- At age 60 with at least 20 years of service;

- Under one of the special provisions for law enforcement officers, firefighters, air traffic

controllers, or military reserve technicians (see Chapter 46);

- At or after the MRA under discontinued service (involuntary) retirement provisions (see

Chapter 44);

- At or after the MRA under early retirement provisions (that is, a major RIF, reorganization, or

transfer of function) (see Chapter 43);

- At or after the MRA for Members of Congress;

- At or after the MRA under early retirement provisions for members of the Senior Executive

Service, Defense Intelligence Senior Executive Service, Senior Cryptologic Executive Service,

and FBI and DEA Senior Executive Service; or

- Members of the Senior Executive Service, Defense Intelligence Senior Executive Service,

Senior Cryptologic Executive Service, and FBI and DEA Senior Executive Service, regardless

of age, who are eligible for early retirement because of failure to be recertified as a senior

executive

B. Individuals Not Immediately Eligible for the Retiree Annuity Supplement

A retiree is eligible for the retiree annuity supplement only upon attaining the MRA rather than at time

of retirement if he or she - 

1. Has at least 1 calendar year of FERS service (see paragraph D ); and.

2. Retires before the MRA under the provisions for --

- Discontinued service (involuntary) retirement (see Chapter 44);

- Early retirement (that is, a major RIF, reorganization, or transfer of function) (see Chapter 43);

- Members of Congress; or

- Early retirement for members of the Senior Executive Service, Defense Intelligence Senior

Executive Service, Senior Cryptologic Executive Service, and FBI and DEA Senior Executive

Service.

C. Individuals Not Eligible for the Retiree Annuity Supplement

Retirees in the following categories are not eligible for the retiree annuity supplement at any time:

- Disability retirees (see Chapter 60);

- Individuals retiring under the MRA + 10 provision (see Chapter 42);

- Individuals who are eligible only for a deferred annuity (see Chapter 45); and
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- Individuals retiring at age 62 or later. 

D. Requirement of One Calendar Year of FERS Service 

To be eligible for the retiree annuity supplement, individuals described in paragraphs A and B must 

have at least 1 full calendar year of civilian service creditable under FERS computation rules. An 

employee who serves from January 1 through December 30 or 31 is considered to have performed a 

"calendar year" of service for this purpose. 

Example: Albert submitted his election to transfer to FERS on December 28, 2001, and the 

transfer became effective on January 3, 2002. He retired on December 31, 2002. Since 

he did not perform a full calendar year of FERS service in 2002 because the transfer 

was effective January 3rd, the year 2002 does not count as a "calendar year" and he is 

not eligible for an annuity supplement. 

Note: Military service cannot be counted in determining if the employee has 1 full year of FERS 

service (unless it is a period of military service covered by military leave with pay -- or leave 

without pay -- from a civilian position). 

E. Duration of the Retiree Annuity Supplement 

The retiree annuity supplement is payable through the earlier of the following dates: 

1. The last day of the month in which the retiree becomes age 62; or 

2. The last day of the month before the first month for which the retiree would, upon proper 

application, be entitled to Social Security benefits. 

Note 1 For retirement and Social Security purposes, an individual attains or becomes age 62 on the 

"first moment" of the day before his or her 62nd birthday. Thus, if a retiree's 62nd birthday 

is on September 1st, then he or she becomes age 62 on August 31st (See EXAMPLE 1 

below). 

Note 2 An individual is entitled to Social Security old-age benefits, upon proper application, 

beginning on the first of the month throughout which he or she is age 62 (as defined in Note 

1) and is fully insured (See Example 2 below). 

Example 1 Mary's 62nd birthday is September 1st. Her annuity supplement stops on August 31st 

whether or not she is entitled to Social Security benefits, because she attained age 62 on 

August 31st (see NOTE 1, above). 

Example 2 Sam's 62nd birthday is September 2nd. He is eligible for Social Security benefits 

beginning on September 1st because September is the first month as a 62-year-old. 

Therefore, his FERS retiree annuity supplement stops on August 31st. However, if Sam 

were not entitled to Social Security benefits, the supplement would continue until 

September 30th because that is the last day of the month in which he became age 62. 
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Part 51A2. Computation of the Retiree Annuity Supplement 

Subpart 51A2.1 Constructing Earnings History 

Section 52A2.1-1 Rules 

A. General 

The first step in calculating a retiree annuity supplement is to construct an earnings history using actual

and deemed pay. 

Note: The procedure for computing the annuity supplement for a regularly scheduled part-time 

employee is no different from that for a full-time employee. However, a part-time employee 

will generally have less earnings than a full-time employee. Therefore, a retiree with parttime earnings may have a lower actual/deemed pay used in the calculation of his or her 

annuity supplement. 

B. Earnings History/Elapsed Years 

The earnings history consists of an individual's "elapsed years," which are defined as the calendar years 

after the year in which the individual attained age 21 (or after 1950, if later) and before the year in which 

he or she becomes entitled to the retiree annuity supplement. 

C. Actual Pay 

1. In constructing an earnings history, use actual pay for each year in which the employee has a full 

calendar year of creditable civilian service under FERS. 

- Actual pay for purposes of computing the retiree annuity supplement is only pay that is subject 

to retirement deductions (that is, basic pay) up to the Social Security maximum taxable 

earnings (The maximum taxable earnings is the maximum amount of wages, in any calendar 

year, to which the Social Security tax is applied. See Table A, section 51B1.1-2). Actual pay 

does not include any pay that is not subject to retirement deductions, such as cash awards or 

overtime (even though such pay is subject to FICA taxes). 

- Actual pay for any year may be calculated by multiplying total FERS deductions by the 

appropriate factor in Table D , section 51B1.1-5. 

2. Use actual pay in the following situations: 

- Full calendar years of CSRS service that subsequently become subject to FERS computation 

rules (for example, CSRS Offset service). 

- An otherwise qualifying calendar year in which there are periods of LWOP that are 6 months 

or less in the aggregate. ("Actual pay" in Section 51A2.1-1) 

- such cases is the earnings actually received and not the earnings the employee would have 

received had he or she not been in a LWOP status); and 

- Full calendar years of non-deduction service (for example, temporary service) before 1989 for 

which a FERS deposit has been made. 

3. Do not use actual pay in the following situations: 

- Any calendar year in which there are periods of LWOP exceeding 6 months in the aggregate. 

In such cases, the employee has not performed a full calendar year of creditable FERS service; 

consequently, the year is a "deemed pay" year (see paragraph D);
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- Any calendar year in which the employee had a break in service exceeding 3 days. The 

calendar years in which a break occurs are "deemed pay" years (see paragraph D);

- Calendar years of non-deduction service for which a deposit has not been (or cannot be) paid; 

and 

- Calendar years of FERS service for which a refund of FERS deductions has been paid. 

D. Deemed Pay 

Use deemed pay for years in which the individual did not have creditable civilian FERS service for a 

full calendar year. Since the earnings history for the annuity supplement computation begins with the year 

the employee reached age 22 (or 1951, if later) and ends with the year before the year in which the 

annuitant is entitled to receive an annuity supplement, many retiring employees will have some years for 

which deemed earnings must be derived. 

In general, to compute deemed earnings --

1. Compute an earnings ratio by dividing the employee's actual pay for the first full calendar year of 

FERS service by the National Average Wage Index for that year (see Table B, section 51B1.1-3); 

and 

2. Multiply the earnings ratio by the National Average Wage for each year in which earnings are to be 

deemed 

Example: Determine deemed earnings for 2018 when the first full calendar year of FERS service is 

2019. Assume actual pay in 2019 is $60,000. (See Table B, section 51B1.1-3 for 2018 

and 2019 National Average Wages.) 

2019 Actual Pay = Earnings Ratio 

2019 National Average Wage 

Earnings Ratio x 2018 National Average Wage = 2018 Deemed Pay 

$60,000.00 = 1.109058 

$54,099.99, 

1.109058 x $52,145.80 = $57,832.72 

Note 1: The actual pay used in the earnings ratio may not exceed the applicable maximum taxable 

earnings. Also, the deemed pay for any year may not exceed the applicable maximum 

taxable earnings (see Table A, section 51B1.1-2). 

Note 2: Each time there is a break in service exceeding 3 days, the year in which the break occurred 

and any subsequent years until the next full calendar year of FERS civilian service are 

"deemed pay" years. 

 The earnings ratio used to compute deemed pay for such years is computed by dividing the 

employee's actual pay in the first full calendar year of FERS service after the break by the 

National Average Wage for that year. 

Note 3: If the National Average Wage for a year is not yet available, use the National Average Wage 

for the last known year to derive an estimated deemed pay. If the National Wage is not 

available when OPM computes the supplement, it will use the last National Average Wage 

and recompute the supplement when the correct National Average Wage is available. 
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E. Earnings in Year of Separation 

1. General Rule 

Earnings during the year in which an employee separates for an immediate retirement are not 

included in the earnings history. 

2. Exception 

If the annuitant retired before the calendar year in which he or she reached the MRA under 

circumstances in which the annuity supplement does not begin until he or she reaches the MRA 

(see section 51A1.1-3, paragraph B), earnings in the calendar year of retirement are the retiree's 

annual basic pay for that year (even though he or she only worked part of the year). Earnings in 

calendar years after the year of separation, and before the MRA is reached, are deemed to be zero. 

F. Earnings in Year of Separation 

1. General Rule 

A new earnings ratio must be calculated after every interruption in FERS covered service greater 

than three days. A full calendar year of FERS service is from January 1 through December 30 or 

31. A year that begins on January 1 but ends on or before December 29 is not considered a full 

calendar year. The earnings from the “next” full calendar year of FERS service after each 

interruption in FERS service must be used to compute an additional earnings ratio. Therefore, 

multiple earnings ratios will be applied to deemed wages in the earnings history when an 

interruption in FERS service occurs. 

Example: Madison is appointed to a FERS covered position effective January 1, 1990 and retires on 

November 30, 2019. She had a break in service from March 1, 1995 through July 10, 1997. 

The earnings for 1990 will be used in the first earnings ratio calculation to determine the 

deemed wages prior to 1990 (1990 is the first full calendar year under FERS). The earnings 

for 1998 will then be used in an additional earnings ratio calculation to determine the deemed 

wages for 1995, 1996, and 1997. 
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Subpart 51A2.2 Determining the Benefit Computation Years 

Section 52A2.2-1 Rules 

A. General 

Once the earnings history is constructed, the next step is to determine the benefit computation years to 

be used in the computation of the retiree annuity supplement 

B. Procedure 

1. Index Earnings 

Index the earnings during the elapsed years (see section 51A2.1 1, paragraph B) by multiplying the 

earnings (both actual and deemed) for each year by the appropriate index factor. Index factors 

change yearly and are listed in Table C, section 51B1.1-4. 

2. Select Benefit Computation Years 

Eliminate the 5 lowest years of indexed earnings from the elapsed years. The years remaining are 

the benefit computation years that will be used to compute the retiree annuity supplement 
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Subpart 51A2.3 Determining the Benefit Computation Years 

Section 52A2.3-1 Rules 

A. General 

Once the benefit computation years have been determined, the retiree annuity supplement is computed 

using a methodology derived from the Social Security law. This methodology is explained in the 

paragraphs that follow: 

Note: A blank computation worksheet (for local reproduction) is provided in section 51B1.2-1. 

Computation examples are provided in section 51B1.1-3. 

B. Average Indexed Monthly Earnings (AIME)

The Average Indexed Monthly Earnings (AIME) must first be computed to reflect the change in 

general wage levels that occurred during the employee’s years of employment, by using the following 

formula. 

1. Total the indexed earnings (actual and deemed) from the benefit computation years; 

2. Determine the number of months in the benefit computation years (number of years x 12); then 

3. Divide the total indexed earnings derived in B1 by the number of months derived in B2. Drop any 

fraction of a dollar that is left over. The result is the AIME for the purpose of computing the retiree 

annuity supplement. 

C. Primary Insurance Amount (PIA) 

The next step is to compute the Primary Insurance Amount (PIA). The PIA is the benefit an employee 

would receive if he or she elected to begin receiving retirement benefits at his or her normal retirement 

age. The formula used to compute the PIA contains bend points (dollar amounts) that change each year. 

The bend points are set by the Social Security Administration. For the current year's bend points, visit 

https://www.ssa.gov/oact/cola/bendpoints.html. The percentages in the formula are set by law. 

1. If the annuity supplement commences in 2021, the PIA is computed, for purposes of calculating the 

retiree annuity supplement, by using the following formula. 

- 90 percent x first $996 of AIME; plus 

- 32 percent x next $5,006 of AIME (earnings over $996 and through $6,002); plus 

- 15 percent x AIME over $6,002, equals the PIA. 

See example computations in section 51B1.1-3, part III, #3. 

Note: In general, the annuity supplement is computed as if the annuitant were age 62 and fully 

insured on January 1 of the year during which the annuity supplement commences. Therefore, 

the PIA is computed by using the Social Security formula (bend points) that applies for 

individuals turning age 62 in that year. 

In addition, the age reduction that is applied to Social Security benefits that begin at age 62 is 

also applied in calculating the retiree annuity supplement. (See paragraph C2 below.) 

However, the windfall elimination provision is not applied. 

2. Multiply the PIA computed in C1 by the appropriate reduction factor found in Table E, section 

51B1.1-6. The factor to be used depends on the individual's year of birth. Note that for those born 

before 1938, the reduction factor is 80 percent. For those born in 1938 or later, the reduction factor 
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CSRS and FERS Handbook March 2022 

is less than 80 percent but never less than 70 percent. 

D. Amount of Retiree Annuity Supplement 

The reduced PIA obtained in paragraph C is multiplied by the following fraction. 

- The numerator is the retiree's total civilian service creditable under FERS, rounded to the nearest 

whole number, but not exceeding 40 years; and 

- The denominator is 40. 

This fraction is expressed as follows; 

Total Civilian Service Creditable under FERS 

(rounded to nearest full year 

40

Note: Civilian Service includes time in active and honorable military service performed during a period 

covered by military leave with pay or leave without pay from civilian service as long as a military 

deposit is paid under USERRA rules. Military service not covered under USERRA is not creditable 

for the retiree annuity supplement. See P.L. 103-353, the “Uniformed Services Employment and 

Reemployment Rights Act of 1994” for more information on creditable service under USERRA. 
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Part 51A3. Reduction in Retiree Annuity Supplement Due to Excess Earnings 

Subpart 51A3.1 Reduction Due to Excess Earnings 

Section 52A3.1-1 Rules 

A. General

A person who is employed after retiring may lose part or all of the retiree annuity supplement if the

amount he or she earns exceeds the maximum permissible "exempt amount” of earnings. 

Note 1: The reduction applies only to the retiree annuity supplement, not to the basic FERS annuity. 

Note 2: The reduction for excess earnings does not apply to employees who retire under the special 

provisions for law enforcement officers, firefighters, air traffic controllers, and military reserve 

technicians (see Chapter 46) until they reach the MRA. 

An exemption exists for certain earnings of retired air traffic controllers employed full-time under 

contract with the Federal Aviation Administration (FAA). Excess earnings of air traffic controller 

instructors employed under contract with the FAA, including instructors working at an on-site facility 

(such as an airport), during any period on or after December 8, 2016, are not considered earnings for 

purposes of OPM’s annual annuity supplement earnings test (See 5 U.S.C. 8421a(c)). 

An individual must meet all of the following requirements to qualify for the earnings exemption under 

5 U.S.C. § 8421a(c): 

1. Retirement Provision – The individual must have retired under 5 U.S.C. § 8412(e) (air traffic

controller retirement) in order to qualify for 5 U.S.C. § 8421a(c) exemptions.

2. Full-time Employment – The individual must be employed full-time sometime during the

calendar year. The minimum time period for establishing full time employment is one calendar

week. An individual must work at least 40 hours during a work week to be considered fulltime.

3. Exempt Contract Earnings – The individual must receive exempt contract earnings sometime

during the calendar year. Exempt contract earnings are defined as, pay that is earned during a

period of full-time employment as a contracted air traffic controller instructor with the FAA.

B. Exempt Amount

The exempt amount is the same as the amount established by the Social Security Administration for the

purpose of calculating the earnings reduction for Social Security benefits. (See 42 U.S.C. 403.) 

In 2021, the exempt amount is $18,960. That is, a retiree can earn up to $18,960 during the year 

without losing any part of the retiree annuity supplement to which he or she may be entitled. The exempt 

amount increases annually with the annual increases in average wage levels in the national workforce. 

(The Social Security Administration publishes the updated exempt amount each year.) 

C. Amount of Reduction

If a retiree's earnings exceed the exempt amount, the annuity supplement will be reduced $1 for every

$2 that is earned above that amount. Earnings, for purposes of calculating the earnings reduction, consist 

of the sum of wages for services performed in the year, plus all net earnings from self-employment for the 

year, minus any net loss from self-employment for the year. (See 42 U.S.C. 403.) 
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Note 1: Any earnings reduction during a year may not exceed the amount of the annuity supplement 

payable during that year. 

Note 2: For the year immediately following the first year during which a retiree became eligible to 

receive the annuity supplement, the annual earnings reduction amount cannot exceed total 

annuity supplement to which the individual was entitled in the first year, or preceding year. For 

example, Liza retires at the end of September 2020, and is awarded an annuity supplement of 

$500 a month. 

Since her annuity supplement payments during 2020 total $1,500, any reduction of her annuity 

supplement payments during 2021 for post-retirement excess earnings during 2020 cannot 

exceed $1,500 -- no matter how much she earns during the months of October through December 

2020. 

D. When Reduction is Assessed

A reduction in the retiree annuity supplement in a given year is based on excess earnings in the

previous year. 

The reduction is assessed beginning with the year immediately after the first year during which a retiree 

became entitled to the annuity supplement (or reached the MRA if already receiving the annuity 

supplement before the MRA). 

Example 1: Tom retired in June 2020 at age 57 with 30 years of service. He is eligible for an annuity 

supplement. His earnings in 2020 are subject to the earnings test. If his post-retirement 

earnings exceed the 2020 exempt amount of $18,240, his annuity supplement for 2021 will be 

reduced. 

Example 2: Susan retired at age 52 under the discontinued service provision. She reached her MRA in 

June 2020 and began receiving the annuity supplement. Her earnings in 2020 became subject 

to the earnings test. If her post-retirement earnings exceed the 2020 exempt amount of 

$18,240, her annuity supplement for 2021 will be reduced. 

Example 3: Bruce retired on May 2018 at age 52 under the firefighter provisions. He started receiving an 

annuity supplement immediately. It was not subject to the earnings test until he reached his 

MRA in June 2021. 

If no annuity supplement is payable in the year following a year in which the retiree's earnings 

exceeded the exempt amount (that is, the annuity supplement was terminated during the previous year due 

to attainment of age 62), there is no reduction for excess earnings since the reduction can only be applied 

to the retiree annuity supplement. 

E. Reporting Earnings to OPM

OPM asks each retiree who has reached the MRA for a statement of earnings each year he or she is

eligible to receive the annuity supplement. Earnings must be reported by retirees using form RI 92-22, 

Annuity Supplement Earnings Report. Mail the completed report to: 

U.S. Office of Personnel Management 

Retirement Surveys and Students Branch 

FERS Annuity Supplement Survey 

1900 E St., NW, Room 2416 

Washington, DC 20415-0001 
14 Chapter 51. Retiree Annuity Supplement

CSRS and FERS Handbook March 2022 

Note 1: Retirees do not have to include annuity payments from OPM as earned wages and Air Traffic 

Controller Instructors do not have to report their full-time wages earned as ATC instructors. 

Include, as earnings, all income from wages and self-employment actually received plus 

deferred income earned. 
Chapter 51. Retiree Annuity Supplement 15

CSRS and FERS Handbook March 2022 

Subpart 51A4.1 Reduction Due to Excess Earnings 

Section 51A4.1-1 Rules 

A. Duration of Retiree Annuity Supplement

The retiree annuity supplement terminates at approximately age 62, whether or not the retiree is entitled

to or applies for Social Security benefits at that time. (See section 51A1.1-3, paragraph E, for specific 

termination date.) 

B. Earnings Reduction

A retiree may not receive part or all of the supplement if his or her earnings exceed a certain amount.

After reaching the MRA, retirees who are receiving the annuity supplement are required to report earnings 

annually to OPM. (See part 51A3 for detailed information.) 

C. COLA's

The retiree annuity supplement is not increased by cost-of-living adjustments (COLAs).

Part 51A4 Advice to Employee 
16 Chapter 51. Retiree Annuity Supplement

CSRS and FERS Handbook March 2022 

Subchapter 51B Job Aids 

Part 51B1 Annuity Supplement Job Aidss 

Subpart 51B1.1 Tables 

Section 51B1.1-1 Tables 

This section contains the following tables. 

- Table A - Social Security Maximum Taxable Earnings

- Table B - National Average Wage Index

- Table C - Indexing Factors for Retiree Annuity Supplement Commencing in 2020

- Table D - Table for Converting Retirement Deductions to Actual Basic Pay

- Table E - Reduction Factors
Chapter 51. Retiree Annuity Supplement 17

CSRS and FERS Handbook March 2022 

Section 51B1.1-2 Table A 

Table A - Social Security Maximum Taxable Earnings 

Year Amount Year Amount Year Amount 

1937-50 $3,000.00 1986 $42,000.00 2006 $94,200.00 

1951-54 3,600.00 1987 43,800.00 2007 97,500.00 

1955-58 4,200.00 1988 45,000.00 2008 102,000.00 

1959-65 4,800.00 1989 48,000.00 2009 106,800.00 

1966-67 6,600.00 1990 51,300.00 2010 106,800.00 

1968-71 7,800.00 1991 53,400.00 2011 106,800.00 

1972 9,000.00 1992 55,500.00 2012 110,100.00 

1973 10,800.00 1993 57,600.00 2013 113,700.00 

1974 13,200.00 1994 60,600.00 2014 117,000.00 

1975 14,100.00 1995 61,200.00 2015 118,500.00 

1976 15,300.00 1996 62,700.00 2016 118,500.00 

1977 16,500.00 1997 65,400.00 2017 127,200.00 

1978 17,700.00 1998 68,400.00 2018 128,400.00 

1979 22,900.00 1999 72,600.00 2019 132,900.00 

1980 25,900.00 2000 76,200.00 2020 137,700.00 

1981 29,700.00 2001 80,400.00 2021 142,800.00 

1982 32,400.00 2002 84,900.00 2022 147,000.00 

1983 35,700.00 2003 87,000.00 

1984 37,800.00 2004 87,900.00 

1985 39,600.00 2005 90,000.00 
18 Chapter 51. Retiree Annuity Supplement

CSRS and FERS Handbook March 2022 

Section 51B1.1-3 Table B 

Table B - National Average Wage Indexing Series, 1951-2020 

Year Index 

1951 2,799.16 

1952 2,973.32 

1953 3,139.44 

1954 3,155.64 

1955 3,301.44 

1956 3,532.36 

1957 3,641.72 

1958 3,673.80 

1959 3,855.80 

1960 4,007.12 

1961 4,086.76 

1962 4,291.40 

1963 4,396.64 

1964 4,576.32 

1965 4,658.72 

1966 4,938.36 

1967 5,213.44 

1968 5,571.76 

1969 5,893.76 

1970 6,186.24 

1971 6,497.08 

1972 7,133.80 

1973 7,580.16 

1974 8,030.76 

1975 8,630.92 

Year Index 

1976 9,226.48 

1977 9,779.44 

1978 10,556.03 

1979 11,479.46 

1980 12,513.46 

1981 13,773.10 

1982 14,531.34 

1983 15,239.24 

1984 16,135.07 

1985 16,822.51 

1986 17,321.82 

1987 18,426.51 

1988 19,334.04 

1989 20,099.55 

1990 21,027.98 

1991 21,811.60 

1992 22,935.42 

1993 23,132.67 

1994 23,753.53 

1995 24,705.66 

1996 25,913.90 

1997 27,426.00 

1998 28,861.44 

1999 30,469.84 

2000 32,154.82 

Year Index 

2001 32,921.92 

2002 33,252.09 

2003 34,064.95 

2004 35,648.55 

2005 36,952.94 

2006 38,651.41 

2007 40,405.48 

2008 41,334.97 

2009 40,711.61 

2010 41,673.83 

2011 42,979.61 

2012 44,321.67 

2013 44,888.16 

2014 46,481.52 

2015 48,098.63 

2016 48,642.15 

2017 50,321.89 

2018 52,145.80 

2019 54,099.99 

2020 55,628.00 

Note: If the first year of FERS service is 2021 or 2022, use the National Average Wage for 2020 until 

the 2021 or 2022 amounts are available 
Chapter 51. Retiree Annuity Supplement 19

CSRS and FERS Handbook March 2022 

Section 51B1.1-4 Table C 

Table C - Index Factors for Retiree Annuity Supplement Commencing in 2021 

Year Factor Year Factor Year Factor 

1960 13.5009658 1986 3.1232278 2012 1.2206217 

1961 13.2378681 1987 2.9359868 2013 1.2052174 

1962 12.6066062 1988 2.7981731 2014 1.1639032 

1963 12.3048487 1989 2.6916021 2015 1.1247720 

1964 11.8217236 1990 2.5727621 2016 1.1122039 

1965 11.6126296 1991 2.4803311 2017 1.0750787 

1966 10.9550519 1992 2.3587966 2018 1.0374755 

1967 10.3770236 1993 2.3386833 2019 1.0000000 

1968 9.7096770 1994 2.2775558 2020 1.0000000 

1969 9.1791980 1995 2.1897812 

1970 8.7452136 1996 2.0876823 

1971 8.3268160 1997 1.9725804 

1972 7.5836146 1998 1.8744730 

1973 7.1370512 1999 1.7755259 

1974 6.7365965 2000 1.6824846 

1975 6.2681603 2001 1.6432817 

1976 5.8635568 2002 1.6269651 

1977 5.5320131 2003 1.5881424 

1978 5.1250319 2004 1.5175930 

1979 4.7127644 2005 1.4640240 

1980 4.3233438 2006 1.3996899 

1981 3.9279458 2007 1.3389270 

1982 3.7229870 2008 1.3088189 

1983 3.5500451 2009 1.3288590 

1984 3.3529442 2010 1.2981766 

1985 3.2159285 2011 1.2587362 

Note 1: Indexing factors for earnings may be found by entering the year of eligibility on the 

Social Security Website. 

Note 2: See section 51A2.1, paragraph B. 
20 Chapter 51. Retiree Annuity Supplement

CSRS and FERS Handbook March 2022 

Section 51B1.1-5 Table D 

Table D - Table for Converting Retirement Deductions to Actual Basic Pay 

Year FERS 

Withholding Rate 

Factor If deductions* equal 

or exceed amounts 

shown below, use 

Maximum Taxable 

Earnings in Next 

Column 

If deductions below equal 

or exceed amounts shown 

below, use Maximum 

Taxable Earnings from 

Table A 

1984 1.3% 76.92 $491.40 $37,800 

1985 1.3% 76.92 $514.80 $39,600 

1986 1.3% 76.92 $546.00 $42,000 

1987 

1.3% 

1.8%**

76.92 

55.56 

$569.40 

$788.40 $43,800

1988 

0.94% 

1.44%**

106.38 

69.44 

$423.00 

$648.00 $45,000

1989 

0.94% 

1.44%**

106.38 

69.44 

$451.20 

$691.20 $48,000

1990 0.8% 

1.3%**

125.00 

76.92 

$410.40 

$666.90 $51,300

1991 0.8% 

1.3%**

125.00 

76.92 

$427.20 

$694.20 $53,400

1992 0.8% 

1.3%**

125.00 

76.92 

$444.00 

$721.50 $55,500

1993 0.8% 

1.3%**

125.00 

76.92 

$460.80 

$748.80 $57,600

1994 0.8% 

1.3%**

125.00 

76.92 

$484.80 

$787.80 $60,600

1995 0.8% 

1.3%**

125.00 

76.92 

$489.60 

$795.60 $61,200

1996 0.8% 

1.3%**

125.00 

76.92 

$501.60 

$815.10 $62,700

1997 0.8% 

1.3%**

125.00 

76.92 

$523.20 

$850.20 $65,400

1998 0.8% 

1.3%**

125.00 

76.92 

$547.20 

$889.20 $68,400

1999 1.05% 

1.55%**

95.24 

64.52 

$762.30 

$1,125.30 $72,600

2000 1.2% 

1.7%**

83.33 

58.82 

$914.40 

$1,295.40 $76,200

2001 0.8% 

1.3%**

125.00 

76.92 

$643.20 

$1,045.20 $80,400

2002 0.8% 

1.3%**

125.00 

76.92 

$679.20 

$1,103.70 $84,900

2003 0.8% 

1.3%**

125.00 

76.92 

$696.00 

$1,131.00 $87,000
Chapter 51. Retiree Annuity Supplement 21

CSRS and FERS Handbook March 2022 

Year FERS 

Withholding Rate 

Factor If deductions* equal 

or exceed amounts 

shown below, use 

Maximum Taxable 

Earnings in Next 

Column 

If deductions below equal 

or exceed amounts shown 

below, use Maximum 

Taxable Earnings from 

Table A 

2004 0.8% 

1.3%**

125.00 

76.92 

$703.20 

$1,142.70 $87,900

2005 0.8% 

1.3%**

125.00 

76.92 

$720.00 

$1,170.00 $90,000

2006 0.8% 

1.3%**

125.00 

76.92 

$753.60 

$1,224.60 $94,200

2007 0.8% 

1.3%**

125.00 

76.92 

$780.00 

$1,267.50 $97,500

2008 0.8% 

1.3%**

125.00 

76.92 

$816.00 

$1,326.00 $102,000

2009 0.8% 

1.3%**

125.00 

76.92 

$854.40 

$1,388.40 $106,800

2010 0.8% 

1.3%**

125.00 

76.92 

$854.40 

$1,388.40 $106,800

2011 0.8% 

1.3%**

125.00 

76.92 

$854.40 

$1,388.40 $106,800

2012 0.8% 

1.3%**

125.00 

76.92 

$880.80 

$1,431.30 $110,100

2013

0.8% 

1.3%**

3.1%*** 

3.6% 

125.00 

76.92 

32.26 

27.78 

$909.60 

$1,478.10 

$3,524.70 

$4,093.20 

$113,700

2014

0.8% 

1.3%** 

3.1%*** 

3.6% 

4.4%** *** 

4.9%****** 

125.00 

76.92 

32.26 

27.78 

22.73 

20.41 

$936.00 

$1,521.00 

$3,627.00 

$4,212.00 

$5,148.00 

$5,733.00 

$117,000

2015

0.8% 

1.3%**

3.1%*** 

3.6% 

4.4%** *** 

4.9%****** 

125.00 

76.92 

32.26 

27.78 

22.73 

20.41 

$948.00 

$1,540.50 

$3,673.50 

$4,266.00 

$5,214.00 

$5,806.50 

$118,500

2016

0.8% 

1.3%**

3.1%*** 

3.6% 

4.4%** *** 

4.9%****** 

125.00 

76.92 

32.26 

27.78 

22.73 

20.41 

$948.00 

$1,540.50 

$3,673.50 

$4,266.00 

$5,214.00 

$5,806.50 

$118,500

2017

0.8% 

1.3%**

3.1%*** 

125.00 

76.92 

32.26 

$1,017.60 

$1,653.60 

$3,943.20 

$127,200
22 Chapter 51. Retiree Annuity Supplement

CSRS and FERS Handbook March 2022 

Year FERS 

Withholding Rate 

Factor If deductions* equal 

or exceed amounts 

shown below, use 

Maximum Taxable 

Earnings in Next 

Column 

If deductions below equal 

or exceed amounts shown 

below, use Maximum 

Taxable Earnings from 

Table A 

3.6%**** 

4.4%***** 

4.9%****** 

27.78 

22.73

20.41 

$4,579.20 

$5,596.80 

$6,232.80 

2018

0.8% 

1.3%**

3.1%*** 

3.6% 

4.4%** *** 

4.9%****** 

125.00 

76.92 

32.26 

27.78 

22.73 

20.41 

$1,027.20 

$1,669.20 

$3,980.40 

$4,622.40 

$5,649.60 

$6,291.60 

$128,400

2019

0.8% 

1.3%**

3.1%*** 

3.6% 

4.4%** *** 

4.9%****** 

125.00 

76.92 

32.26 

27.78 

22.73 

20.41 

$1,063.20 

$1,727.70 

$4,119.90 

$4,784.40 

$5,847.60 

$6,512.10 

$132,900

2020 

0.8% 

1.3%**

3.1%*** 

3.6% 

4.4%** *** 

4.9%****** 

125.00 

76.92 

32.26 

27.78 

22.73 

20.41 

$1,101.60 

$1,790.10 

$4,268.70 

$4,957.20 

$6,058.80 

$6,747.30 

$137,700 

2021 

0.8% 

1.3%**

3.1%*** 

3.6% 

4.4%** *** 

4.9%****** 

125.00 

76.92 

32.26 

27.78 

22.73 

20.41 

$1,142.40 

$1,856.40 

$4,426.80 

$5,140.80 

$6,283.20 

$6,997.20 

$142,800 

2022 

0.8% 

1.3%**

3.1%*** 

3.6% 

4.4%** *** 

4.9%****** 

125.00 

76.92 

32.26 

27.78 

22.73 

20.41 

$1,142.40 

$1,856.40 

$4,426.80 

$5,140.80 

$6,283.20 

$6,997.20 

$147,000 

* These deduction amounts represent withholdings made at FERS withholding rates, not CSRS rates.

** Withholding rate for FERS special groups. 

*** Withholding rate for FERS RAE. 

  Withholding rate for FERS RAE special groups. 

** *** Withholding rate for FERS FRAE. 

****** Withholding rate for FERS FRAE special groups 

2017

(Cont.) $127,200
Chapter 51. Retiree Annuity Supplement 23

CSRS and FERS Handbook March 2022 

Section 51B1.1-6 Table E 

Table E - Reduction Factors 

Year of Birth Reduction Factor Year of Birth Reduction Factor 

1937 and before .800000 1955 .741667 

1938 .791667 1956 .733333

1939 .783333 1957 .725000

1940 .775000 1958 .716667

1941 .766667 1959 .708333

1942 .758333 1960 and later .700000

1943 through 1954 .750000
24 Chapter 51. Retiree Annuity Supplement

CSRS and FERS Handbook March 2022 

Subpart 51B1.2 Worksheets 

Section 51B1.2-1 Blank Computation Worksheets for Local Reproduction

Worksheet for Computing Retiree Annuity Supplement

Retiree's Name Date of Birth Year Annuity Supplement Begins Retirement 

Date 

Part 1 Earnings Ratio (complete only if needed) 

A. Basic Earnings during first full calendar year under FERS* $ 

B. National Average Wages for first full calendar year under FERS** $ 

C. Earnings Ratio (divide line A by line B) 

Part 2 Benefit Computation 

A 

(Amounts in 

parentheses are 

Maximum Taxable 

Wage Base.) 

Year 

B 

Actual Pay 

C 

Deemed Pay 

D 

Index 

Factor*** 

E 

Indexed 

Earnings 

Col. 1 x Col. 2 = Col. 3 Col. 1 x Col. 2 = Col. 3 

Contributions Conversion 

Factor 

Actual 

Pay*

 National 

Average 

 Wages** 

 Earnings 

Ratio 

 Deemed 

Pay* 

1951 ($3,600) 

1952 ($3,600) 

1953 ($3,600) 

1954 ($3,600) 

1955 ($4,200) 

1956 ($4,200) 

1957 ($4,200) 

1958 ($4,200) 

1959 ($4,800) 

1960 ($4,800) 

1961 ($4,800) 

1962 ($4,800) 

1963 ($4,800) 

1964 ($4,800) 

1965 ($4,800) 

1966 ($6,600) 

1967 ($6,600) 

1968 ($7,800) 
Chapter 51. Retiree Annuity Supplement 25

CSRS and FERS Handbook March 2022 

A 

(Amounts in 

parentheses are 

Maximum Taxable 

Wage Base.) 

Year

B 

Actual Pay

C 

Deemed Pay

D 

Index 

Factor*** 

E 

Indexed 

Col. 1 x Col. 2 = Col. 3 Col. 1 x Col. 2 = Col. 3 Earnings

ContributionsConversion 

Factor

Actual 

Pay*

National 

Average 

Wages**

Earnings 

Ratio 

Deemed 

Pay* 

1969 ($7,800) 

1970 ($7,800) 

1971 ($7,800) 

1972 ($9,000) 

1973 ($10,800) 

1974 ($13,200) 

1975 ($14,100) 

1976 ($15,300) 

1977 ($16,500) 

1978 ($17,700) 

1979 ($22,900) 

1980 ($25,900) 

1981 ($29,700) 

1982 ($32,400) 

1983 ($35,700) 

1984 ($37,800) 

1985 ($39,600) 

1986 ($42,000) 

1987 ($43,800) 

1988 ($45,000) 

1989 ($48,000) 

1990 ($51,300) 

1991 ($53,400) 

1992 ($55,500) 

1993 ($57,600) 

1994 ($60,000) 

1995 ($61,200) 

1996 ($62,700) 
26 Chapter 51. Retiree Annuity Supplement

CSRS and FERS Handbook March 2022 

A 

(Amounts in 

parentheses are 

Maximum Taxable 

Wage Base.) 

Year

B 

Actual Pay

C 

Deemed Pay

D 

Index 

Factor*** 

E 

Indexed 

Earnings Col. 1 x Col. 2 = Col. 3 Col. 1 x Col. 2 = Col. 3

ContributionsConversion 

Factor

Actual 

Pay*

National 

Average 

Wages**

Earnings 

Ratio

Contributions

1997 ($65,400) 

1998 ($68,400) 

1999 ($72,600) 

2000 ($76,200) 

2001 ($80,400) 

2002 ($84,900) 

2003 ($87,000) 

2004 ($87,900) 

2005 ($90,000) 

2006 ($94,200) 

2007 ($97,500) 

2008 ($102,000) 

2009 ($106,800) 

2010 ($106,800) 

2011 ($106,800) 

2012 ($110,100( 

2013 ($113,700) 

2014 ($117,000) 

2015 ($118,500) 

2016 ($118,500) 

2017 ($127,200) 

2018 ($128,400) 

2019 ($132,900) 

2020 ($137,700) 

2021 ($142,800) 

2022 ($147,000) 

Mark out 5 lowest years in Column E and enter the total of the remaining years of indexed earnings from 

Column E. 

* Amount used should not exceed Social Security maximum wage base for applicable year. See Table A.

** Use average total wage for applicable year. See Table B.

*** See Table C for current year factors.
Chapter 51. Retiree Annuity Supplement 27

CSRS and FERS Handbook March 2022 

Part III. Compute Estimated Social Security Benefit

1. Determine the number of years to be used in the computation.

a. Enter the year in which the annuity supplement will begin ...................................

b. Subtract 1951 or the year in which the individual attained age 22,

whichever is later................................................................................................... - 

c. Enter the number of elapsed years......................................................................... = 

d. Subtract 5 years...................................................................................................... - 

e. Total years used in computation ............................................................................ = 

2. Determine Average Indexed Monthly Earnings (AIME).

a. Total Indexed Earnings (from Column E) ............................................................. $

b. Enter the number of months in years included in Total Indexed Earnings

(number of years from line 1e times 12)................................................................

c. AIME (divide line 2a by 2b and round to the next lower dollar) ........................... $

3. Calculate the Primary Insurance Amount (PIA).

a. Calculate the PIA using the following formula.

For Annuity

Supplement 

Commencing In 

Amount of AIME 

to Be Used

PIA 

Formula

Up through $ 90% of amount 

From $ through 

$ 

$ + 32%

of amount 

$ and over $ + 15%

of amount 

PIA ............................................................................................................................... $

3. Calculate the Primary Insurance Amount (PIA) (Continued).

b. Enter the amount calculated on 3a, rounded down to the next lower

multiple of $0.10 (if not already a multiple of $0.10) ............................................ $

c. Enter Reduction Factor (from Table E on page 27)............................................... x
28 Chapter 51. Retiree Annuity Supplement

CSRS and FERS Handbook March 2022 

d. Estimated Social Security Benefit. Multiply line 3b by line 3c,

and round to the next lower dollar ......................................................................... = $ 

4. Calculate Portion of Estimated Social Security Benefit Attributable to FERS Service.

a. Enter total years of FERS civilian service (rounded

to nearest whole number).......................................................................................

b. Determine multiplier (divide line 4a by 40)...........................................................

c. Enter Estimated Social Security Benefit (from line 3d)......................................... x

d. Monthly Retiree Annuity Supplement. Multiply line 4c by

the multiplier in line 4b, and round to the next lower dollar .................................. = $ 
Chapter 51. Retiree Annuity Supplement 29

CSRS and FERS Handbook March 2022 

Subpart 51B1.3 Computation 

Section 51B1.3-1 Computation Examples 

This section contains the following sample computations: 

Example 1: Transferee (See pages 35-39) 

Thomas Schmidt was appointed to Federal service July 16, 1978, and worked continuously under CSRS until 

July 1987. In July 1987, Thomas transferred to FERS during the open season. Consequently, his first full 

calendar year under FERS was 1988. His basic pay for 1988 was $52,138. Thomas retired November 30, 

2020. 

Example 2: Transferee Whose CSRS Offset Service Converts to FERS Service Upon Transfer (See pages 

40-43)

Dennis Meisner was first appointed to Federal service September 28, 1976. He worked continuously under 

CSRS until his separation on February 12, 1982. He returned to Federal service on January 8, 1984, and was 

placed in the Interim Plan. On January 1, 1987, he was covered under the CSRS Offset plan. Dennis 

transferred to FERS effective July 20, 1987. 

Upon transfer, all of his CSRS Offset and Interim service became FERS service. As a result, Dennis' first full 

calendar year of creditable FERS service was 1985. His basic pay for 1985 was $19,511. 

Dennis retired September 30, 2015. 

Example 3: Employee who Retires Under Discontinued Service Retirement Provisions and Receives 

Retiree Annuity Supplement at the MRA (See pages 44-47)

Lawrence Kasdan was appointed to Federal service September 1, 1994. His first full calendar year under FERS 

was 1995 and his basic pay was $45,000. 

Lawrence was involuntarily separated and applied for discontinued service retirement on August 31, 2020. At 

retirement he was age 55 years and 4 months. Because he retired under the provisions for involuntary 

retirement, he is not eligible to receive the retiree annuity supplement until he attains his minimum retirement 

age (56 and 2 months).
30 Chapter 51. Retiree Annuity Supplement

CSRS and FERS Handbook March 2022 

Section 51B1.3-2 Example 1 

Example 1 Worksheet for Computing Retiree Annuity Supplement

Retiree's Name 

Thomas Schmidt 

Date of Birth 

1-2-62

Year Annuity Supplement Begins 

2020 

Retirement Date 

11-30-20

Part 1 Earnings Ratio (complete only if needed) 

A. Basic Earnings during first full calendar year under FERS* $ 29,254.50 (1988) 

B. National Average Wages for first full calendar year under FERS** $ 19,334.04 (1988) 

C. Earnings Ratio (divide line A by line B) 1.5131085 

Part 2 Benefit Computation 

A 

(Amounts in 

parentheses are 

Maximum Taxable 

Wage Base) 

Year 

B 

Actual Pay 

C 

Deemed Pay 

D 

Index 

Factor***

E 

Indexed 

Earnings 

Col. 1 x Col. 2 = Col. 3 Col. 1 x Col. 2 = Col. 3 

Contributions

Conversion 

Factor

Actual

Pay* 

National

 Average 

Wages** 

Earnings 

Ratio 

Deemed

Pay* 

1984 ($37,800.00) 16,135.07 1.5131085 24,414.11 3.2318298 78,902.25 

1985 ($39,600.00) 16,822.51 1.5131085 25,454.28 3.0997634 78,902.25 

1986 ($42,000.00) 17,321.82 1.5131085 26,209.79 3.0104111 79,902.24 

1987 ($43,800.00) 18,426.51 1.5131085 27,881.31 2.8299336 78,902.26 

1988 ($45,000.00) 275.00 106.38 29,254.50 19,334.04 1.5131085 2.6970980 78,902.25 

1989 ($48,000.00) 300.00 106.38 31,914.00 20,099.55 1.5131085 2.5943765 82,796.93 

1990 ($51,300.00) 325.00 125.00 40,625.00 21,027.98 1.5131085 2.4798293 100,743.07

1991 ($53,400.00) 350.00 125.00 43,750.00 21,811.60 1.5131085 2.3907370 104,594.74

1992 ($55,500.00) 375.00 125.00 46,875.00 22,935.42 1.5131085 2.2735925 106,574.65

1993 ($57,600.00) 400.00 125.00 50,000.00 23,132.67 1.5131085 2.2542058 112,710.29

1994 ($60,600.00) 425.00 125.00 53,125.00 23,753.53 1.5131085 2.1952863 116,624.58

1995 ($61,200.00) 450.00 125.00 56,250.00 24,705.66 1.5131085 2.1106823 118,725.88

1996 ($62,700.00) 475.00 125.00 59,375.00 25,913.90 1.5131085 2.0122714 119,478.61

1997 ($65,400.00) 500.00 125.00 62,500.00 27,426.00 1.5131085 1.9013272 118,832.95

1998 ($68,400.00) 525.00 125.00 65,625.00 28,861.44 1.5131085 1.8067636 118,568.86

1999 ($72,600.00) 550.00 95.24 52,382.00 30,469.84 1.5131085 1.7113907 89,646.07 

2000 ($76,200.00) 575.00 83.33 47,914.75 32,154.82 1.5131085 1.6217102 77,703.84 

2001 ($80,400.00) 600.00 125.00 75,000.00 32,921.92 1.5131085 1.5839234 118,794.26 
Chapter 51. Retiree Annuity Supplement 31

CSRS and FERS Handbook March 2022 

A 

(Amounts in 

parentheses are 

Maximum Taxable 

Wage Base.) 

Year

B 

Actual Pay 

C 

Deemed Pay 

D 

Index 

Factor*** 

E 

Indexed 

Earnings 

Col. 1 x Col. 2 = Col. 3 Col. 1 x Col. 2 = Col. 3 

Contributions

Conversion 

Factor

Actual

Pay* 

National

Average 

Wages** 

Earnings 

Ratio 

Deemed

Pay* 

2002 ($84,900.00) 625.00 125.00 78,125.00 33,252.09 1.5131085 1.5681962 122,515.33 

2003 ($87,000.00) 650.00 125.00 81,250.00 34,064.95 1.5131085 1.5307758 124,375.53 

2004 ($87,900.00) 675.00 125.00 84,375.00 35,648.55 1.5131085 1.4627748 123,421.62 

2005 ($90,000.00) 700.00 125.00 87,500.00 36,952.94 1.5131085 1.4111408 123,474.82 

2006 ($94,200.00) 725.00 125.00 90,625.00 38,651.41 1.5131085 1.3491306 122,264.96 

2007 ($97,500.00) 750.00 125.00 93,750.00 40,405.48 1.5131085 1.2905626 120,990.24 

2008 ($102,000.00) 775.00 125.00 96,875.00 41,334.97 1.5131085 122,211.88 

2009 ($106,800.00) 800.00 125.00 100,000.00 40,711.61 1.5131085 128,085.82

2010 ($106,800.00) 825.00 125.00 103,125.00 41,673.83 1.5131085 129,038.67

2011 ($106,800.00) 850.00 125.00 106,250.00 42,979.61 1.5131085 128,909.76

2012 ($110,100.00) 875.00 125.00 109,375.00 44,321.67 1.5131085 128,683.03

2013 ($113,700.00) 900.00 125.00 112,500.00 44,888.16 1.5131085 130,689.30

2014 ($117,000.00) 925.00 125.00 115,625.00 46,481.52 1.5131085 129,715.17

2015 ($118,500.00) 950.00 125.00 118,750.00 48,098.63 1.5131085 128,470.96

2016 ($118,500.00) 975.00 125.00 121,875.00 48,642.15 1.5131085 127,035.45

2017 ($127,200.00) 1000.00 125.00 125,000.00 50,321.89 1.5131085 129,530.61

2018 ($128,400.00) 1025.00 125.00 128,125.00 52,145.80 1.5131085 128,125.00

2019 ($132,900.00) 1050.00 125.00 131,250.00 54,099.99 1.5131085 131,250.00

2020 ($137.700.00) 

2021 ($142,800.00) 

2022 ($147.000.00) 

Mark out 5 lowest years in Column E and enter the total of the remaining years of indexed earnings from Column E. 3,665,781.30 

* Amount used should not exceed Social Security maximum wage base for applicable year. See Table A.

** Use average total wage for applicable year. See Table B

*** See Table C for current year factors.

1.2905626 

1.2615420

1.2808582

1.2132683

1.1765306

1.1616827

1.1218609

1.0841431

1.0720291

1.0362449

1.0000000

1.0000000
32 Chapter 51. Retiree Annuity Supplement

CSRS and FERS Handbook March 2022 

Part III. Compute Estimated Social Security Benefit

1. Determine the number of years to be used in the computation.

a. Enter the year in which the annuity supplement will begin ................................... 2020

b. Subtract 1951 or the year in which the individual attained age 22,

whichever is later................................................................................................... - 1984

c. Enter the number of elapsed years......................................................................... = 36

d. Subtract 5 years...................................................................................................... - 5 

e. Total years used in computation ............................................................................ = 31

2. Determine Average Indexed Monthly Earnings (AIME).

a. Total Indexed Earnings (from Column E) ............................................................. $ 3,665,781.30 

b. Enter the number of months in years included in Total Indexed Earnings

(number of years from line 1e times 12) ................................................................ 372

c. AIME (divide line 2a by 2b and round to the next lower dollar)........................... $ 9,854 

3. Calculate the Primary Insurance Amount (PIA).

a. Calculate the PIA using the following formula.

For Annuity 

Supplement 

Commencing In 

Amount of AIME 

to Be Used

PIA 

Formula

2020 Up through $960 90% of amount 

($960 x .90 =$864.00) 

From $961 through 

$5,785 

$864.00 + 32% 

of amount 

($864.00 + ($4,825 x .32 = $1544.00) = 

$2,408.00) 

$5,786 and over $2,408.00 + 15% of amount 

($2,408.00 + (9,854 - $5,786 = $4,069 x 

.15 = $610.35) = 3,018.35) 

PIA ............................................................................................................................... $ 3,018.35 

b. Enter the amount calculated on 3a, rounded down to the next lower multiple

of $0.10 (if not already a multiple of $0.10)......................................................... $ 3,018.30 

c. Enter Reduction Factor (from Table E on page 27)............................................... x .700000 

d. Estimated Social Security Benefit. Multiply line 3b by line 3c,

and round to the next lower dollar ......................................................................... = $ 2,112 

4. Calculate Portion of Estimated Social Security Benefit Attributable to FERS Service.

a. Enter total years of FERS civilian service (rounded

to nearest whole number) ....................................................................................... 33

b. Determine multiplier (divide line 4a by 40)........................................................... .825000 

c. Enter Estimated Social Security Benefit (from line 3d)......................................... x $ 2,112 

d. Monthly Retiree Annuity Supplement. Multiply line 4c by

the multiplier in line 4b, and round to the next lower dollar .................................. = $ 1,742 
Chapter 51. Retiree Annuity Supplement 33

CSRS and FERS Handbook March 2022 

Section 51B1.3-3 Example 2 

Example 2 Worksheet for Computing Retiree Annuity Supplement

Retiree's Name 

Dennis Meisner 

Date of Birth 

3-25-1955

Year Annuity Supplement Begins 

2015 

Retirement Date 

9/30/2015 

Part 1 Earnings Ratio (complete only if needed) 

A. Basic Earnings during first full calendar year under FERS* $ 19,511.53 (1985) 

B. National Average Wages for first full calendar year under FERS** $ 16,822.51 (1985)

C. Earnings Ratio (divide line A by line B) 1.1598465

Part 2 Benefit Computation 

A 

(Amounts in 

parentheses are 

Maximum Taxable 

Wage Base.) 

Year 

B 

Actual Pay 

C 

Deemed Pay 

D 

Index 

Factor*** 

E 

Indexed 

Earnings 

Col. 1 x Col. 2 = Col. 3 Col. 1 x Col. 2 = Col. 3 

Contributions Conversion 

Factor 

Actual 

Pay*

National 

Average 

Wages**

Earnings 

Ratio 

Deemed 

Pay* 

1977 ($16,500.00) 9,779.44 1.1598465 11,342.65 4.5900542 52,063.38 

1978 ($17,700.00) 10,556.03 1.1598465 12,243.37 4.2523714 52,063.36 

1979 ($22,900.00) 11,479.46 1.1598465 13,314.41 3.9103024 52,063.37 

1980 ($25,900.00) 12,513.46 1.1598465 14,513.69 3.5871901 52,063.37 

1981 ($29,700.00) 13,773.10 1.1598465 15,974.68 3.2591181 52,063.37 

1982 ($32,400.00) 14,531.34 1.1598465 16,854.12 3.0890585 52,063.36 

1983 ($35,700.00) 15,239.24 1.1598465 17,675.18 2.9455642 52,063.38 

1984 ($37,800.00) 16,135.07 1.1598465 18,714.20 2.7820245 52,063.36 

1985 ($39,600.00) 253.66 76.92 19,511.53 16,822.51 1.1598465 2.6683390 52,063.38 

1986 ($42,000.00) 278.91 76.92 21,453.76 17,321.82 1.1598465 2.5914228 55,595.76 

1987 ($43,800.00) 304.16 76.92 23,395.99 18,426.51 1.1598465 2.4360641 56,994.13 

1988 ($45,000.00) 329.41 106.38 35,042.64 19,334.04 1.1598465 2.3217165 81,359.08 

1989 ($48,000.00) 354.66 106.38 37,728.73 20,099.55 1.1598465 2.2332918 84,259.26 

1990 ($51,300.00) 379.91 125.00 47,488.75 21,027.98 1.1598465 2.1346872 101,373.63 

1991 ($53,400.00) 405.16 125.00 50,645.00 21,811.60 1.1598465 2.0579948 104,227.15 

1992 ($55,500.00) 430.41 125.00 53,801.25 22,935.42 1.1598465 1.9571545 105,297.36 

1993 ($57,600.00) 455.66 125.00 56,957.50 23,132.67 1.1598465 1.9404660 110,524.09 
34 Chapter 51. Retiree Annuity Supplement

CSRS and FERS Handbook March 2022 

A 

(Amounts in 

parentheses are 

Maximum Taxable 

Wage Base.) 

Year

B 

Actual Pay 

C 

Deemed Pay 

D 

Index 

 Factor*** 

E 

Indexed 

Earnings 

Col. 1 x Col. 2 = Col. 3 Col. 1 x Col. 2 = Col. 3 

 Contributions 

Con- 

 version 

Factor 

Actual 

Pay*

National 

Average 

Wages** 

 Earnings 

Ratio 

Deemed 

Pay* 

1994 ($60,600.00) 480.91 125.00 60,113.75 23,753.53 1.1598465 1.8897469 113,599.77 

1995 ($61,200.00) 506.16 125.00 63,270.00 24,705.66 1.1598465 1.8169181 111,195.39

1996 ($62,700.00) 531.41 125.00 66,426.25 25,913.90 1.1598465 1.7322040 108,609.19

1997 ($65,400.00) 556.66 125.00 69,582.50 27,426.00 1.1598465 1.6367009 107,040.24

1998 ($68,400.00) 581.91 125.00 72,738.75 28,861.44 1.1598465 1.5552987 106,382.43

1999 ($72,600.00) 607.16 95.24 57,825.92 30,469.84 1.1598465 1.4731997 85,189.13

2000 ($76,200.00) 632.41 83.33 52,698.73 32,154.82 1.1598465 1.3960010 73,567.48

2001 ($80,400.00) 657.66 125.00 82,207.50 32,921.92 1.1598465 1.3634733 109,623.25

2002 ($84,900.00) 682.91 125.00 85,363.75 33,252.09 1.1598465 1.3499350 114,609.48

2003 ($87,000.00) 708.16 125.00 88,520.00 34,064.95 1.1598465 1.3177228 114,641.88 

2004 ($87,900.00) 733.41 125.00 91,676.25 35,648.55 1.1598465 1.2591861 110,682.46 

2005 ($90,000.00) 758.66 125.00 94,832.50 36,952.94 1.1598465 1.2147385 109,326.47 

2006 ($94,200.00) 783.91 125.00 97,988.75 38,651.41 1.1598465 1.1613589 109,400.01 

2007 ($97,500.00) 809.16 125.00 101,145.00 40,405.48 1.1598465 1.1109424 108,316.88 

2008 ($102,000.00) 834.41 125.00 104,301.25 41,334.97 1.1598465 1.0859609 110,768.01 

2009 ($106,800.00) 859.66 125.00 107,457.50 40,711.61 1.1598465 1.1025887 117,756.47 

2010 ($106,800.00) 884.91 125.00 110,613.75 41,673.83 1.1598465 1.0771307 115,037.56 

2011 ($106,800.00) 910.16 125.00 113,770.00 42,979.61 1.1598465 1.0444059 111,542.55

2012 ($110,100.00) 935.41 125.00 116,926.25 44,321.67 1.1598465 1.0127813 111,507.22

2013 ($113,700.00) 960.66 125.00 120,082.50 44,888.16 1.1598465 1.0000000 113,700.00

2014 ($117,000.00) 985.91 125.00 123,238.75 46,481.52 1.1598465 1.0000000 117,000.00

2015 ($118,500.00) 

2016 ($118,500.00) 

Mark out 5 lowest years in Column E and enter the total of the remaining years of indexed earnings from 

Column E. 3,187,379.84 

* Amount used should not exceed Social Security maximum wage base for applicable year. See Table A.

** Use average total wage for applicable year. See Table B.

*** See Table C for current year factors.
Chapter 51. Retiree Annuity Supplement 35

CSRS and FERS Handbook March 2022 

Part III. Compute Estimated Social Security Benefit

1. Determine the number of years to be used in the computation.

a. Enter the year in which the annuity supplement will begin ................................... 2015 

b. Subtract 1951 or the year in which the individual attained age 22,

whichever is later.................................................................................................... - 1977

c. Enter the number of elapsed years......................................................................... = 38

d. Subtract 5 years...................................................................................................... - 5 

e. Total years used in computation ............................................................................ = 33

2. Determine Average Indexed Monthly Earnings (AIME)

a. Total Indexed Earnings (from Column E) ............................................................. $ 3,187,379.84 

b. Enter the number of months in years included in Total Indexed Earnings

(number of years from line 1e times 12) ................................................................ 396 

c. AIME (divide line 2a by 2b and round to the next lower dollar)........................... $ 8,048 

3. Calculate the Primary Insurance Amount (PIA).

a. Calculate the PIA using the following formula.

For Annuity 

Supplement 

Commencing In 

Amount of AIME 

to Be Used

PIA 

Formula

2015 Up through $826 90% of amount 

From $827 through 

$4,980 

$743.40 + 32% 

of amount 

$4,981 and over $2,072.68 + 15% 

of amount 

PIA ............................................................................................................................... $ 2,532.80 

b. Enter the amount calculated on 3a, rounded down to the next lower

multiple of $.10 (if not already a multiple of $.10)............................................... $ 2,532.80 

c. Enter Reduction Factor (from Table E on page 27)............................................... x .741667 

d. Estimated Social Security Benefit. Multiply line 3b by line 3c,

and round to the next lower dollar........................................................................ = $ 1,878 

4. Calculate Portion of Estimated Social Security Benefit Attributable to FERS Service.

a. Enter total years of FERS civilian service (rounded

to nearest whole number) ....................................................................................... 32 

b. Determine multiplier (divide line 4a by 40) ........................................................... .800000 

c. Enter Estimated Social Security Benefit (from line 3d)......................................... x 1,878 

d. Monthly Retiree Annuity Supplement. Multiply line 4c by

the multiplier in line 4b, and round to the next lower dollar .................................. = $ 1,502 
36 Chapter 51. Retiree Annuity Supplement

CSRS and FERS Handbook March 2022 

Section 51B1.3-4 Example 3 

Example 3 Worksheet for Computing Retiree Annuity Supplement

Retiree's Name 

Lawrence Kasdan 

Date of Birth 

04-23-65

Year Annuity Supplement Begins 

2021 

Retirement Date 

8-31-20

Part 1 Earnings Ratio (complete only if needed) 

A. Basic Earnings during first full calendar year under FERS* $ 45,000.00 (1995)

B. National Average Wages for first full calendar year under FERS** $ 24,705.66 (1995)

C. Earnings Ratio (divide line A by line B) 1.8214450

Part 2 Benefit Computation

A 

(Amounts in 

parentheses are 

Maximum Taxable 

Wage Base.) 

Year 

B 

Actual Pay 

C 

Deemed Pay 

D 

Index 

Factor*** 

E 

Indexed 

Earnings 

Col. 1 x Col. 2 = Col. 3 Col. 1 x Col. 2 = Col. 3 

Contributions Conversion 

Factor 

Actual 

Pay*

National 

Average 

Wages**

Earnings 

Ratio 

Deemed 

Pay*

1987 ($42,000.00) 18,426.51 1.8214450 33,562.87 2.9359868 98,540.14 

1988 ($45,000.00) 19,334.04 1.8214450 35,215.89 2.7981731 98,540.16 

1989 ($48,000.00) 20,099.55 1.8214450 36,610.22 2.6916021 98,540.15 

1990 ($51,300.00) 21,027.98 1.8214450 38,301.31 2.5727621 98,540.16 

1991 ($53,400.00) 21,811.60 1.8214450 39,728.63 2.4803311 98,540.16 

1992 ($55,500.00) 22,935.42 1.8214450 41,775.61 2.3587966 98,540.17 

1993 ($57,600.00) 23,132.67 1.8214450 42,134.89 2.3386833 98,540.16 

1994 ($60,600.00) 23,753.53 1.8214450 43,265.75 2.2775558 98,540.16 

1995 ($61,200.00) 360.00 125.00 45,000.00 24,705.66 1.8214450 2.1897812 98,540.15 

1996 ($62,700.00) 380.00 125.00 47,500.00 25,913.90 1.8214450 2.0876823 91,164.91 

1997 ($65,400.00) 400.00 125.00 50,000.00 27,426.00 1.8214450 1.9725804 98,629.02 

1998 ($68,400.00) 420.00 125.00 52,500.00 28,861.44 1.8214450 1.8744730 98,409.83 

1999 ($72,600.00) 440.00 95.24 41,905.60 30,469.84 1.8214450 1.7755259 74,404.48 

2000 ($76,200.00) 460.00 83.33 38,331.80 32,154.82 1.8214450 1.6824846 64,492.66 

2001 ($80,400.00) 480.00 125.00 60,000.00 32,921.92 1.8214450 1.6432817 98,596.90 

2002 ($84,900.00) 500.00 125.00 62,500.00 33,252.09 1.8214450 1.6269651 101,685.32 

2003 ($87,000.00) 520.00 125.00 65,000.00 34,064.95 1.8214450 1.5881424 103,229.26 

2004 ($87,900.00) 540.00 125.00 67,500.00 35,648.55 1.8214450 1.5175930 102,437.53 

2005 ($90,000.00) 560.00 125.00 70,000.00 36,952.94 1.8214450 1.4640240 102,481.68 
Chapter 51. Retiree Annuity Supplement 37

CSRS and FERS Handbook March 2022 

A 

(Amounts in 

parentheses are 

Maximum 

Taxable 

Wage Base.) 

Year 

B 

Actual Pay 

C 

Deemed Pay 

D 

Index 

Factor*** 

E 

Indexed 

Earnings 

Col. 1 x Col. 2 = Col. 3 Col. 1 x Col. 2 = Col. 3 

Contributions 

Conversion 

Factor

Actual 

Pay*

Average 

Total 

Wages** 

Earnings 

Ratio 

Deemed 

Pay*

2006 ($94,200.00) 580.00 125.00 72,500.00 38,651.41 1.8214450 1.3996899 101,477.52 

2007 ($97,500.00) 600.00 125.00 75,000.00 40,405.48 1.8214450 1.3389270 100,419.53 

2008 ($102,000.00) 620.00 125.00 77,500.00 41,334.97 1.8214450 1.3088189 101,433.46 

2009 ($106,800.00) 640.00 125.00 80,000.00 40,711.61 1.8214450 1.3288590 106,308.72 

2010 ($106,800.00) 660.00 125.00 82,500.00 41,673.83 1.8214450 1.2981766 107,099.57 

2011 ($106,800.00) 680.00 125.00 85,000.00 42,979.61 1.8214450 1.2587362 106,992.58 

2012 ($110,100.00) 700.00 125.00 87,500.00 44,321.67 1.8214450 1.2206217 106,804.40 

2013 ($113,700.00) 720.00 125.00 90,000.00 44,888.16 1.8214450 1.2052174 108,469.57 

2014 ($117,000.00) 740.00 125.00 92,500.00 46,481.52 1.8214450 1.1639032 107,661.05 

2015 ($118,500.00) 760.00 125.00 95,000.00 48,098.63 1.8214450 1.1247720 106,853.34 

2016 ($118,500.00) 780.00 125.00 97,500.00 48,642.15 1.8214450 1.1122039 108,439.88 

2017 ($127,200.00) 800.00 125.00 100,000.00 50,321.89 1.8214450 1.0750787 107,507.87 

2018 ($128,400.00) 820.00 125.00 102,500.00 52,145.80 1.8214450 1.0374755 106,341.24 

2019 ($132,900.00) 840.00 125.00 105,000.00 54,099.99 1.8214450 1.000000 105,000.00 

2020 ($137,700.00) 573.33 125.00 71,666.25 54,099.99 1.8214450 1.000000 71,666.25 

2021 ($142,800.00) Not 

Used Not Used 54099.99 1.8214450 1.000000 Not Used 

Mark out 5 lowest years in Column E and enter the total of the remaining years of indexed earnings from 

Column E. 2,975,354.62 

* Amount used should not exceed Social Security maximum wage base for applicable year. See Table A.

** Use average total wage for applicable year. See Table B.

*** See Table C for current year factors
38 Chapter 51. Retiree Annuity Supplement

CSRS and FERS Handbook March 2022 

Part III. Compute Estimated Social Security Benefit

1. Determine the number of years to be used in the computation.

a. Enter the year in which the annuity supplement will begin ................................... 2021 

b. Subtract 1951 or the year in which the individual attained age 22,

whichever is later....................................................................................................- 1987 

c. Enter the number of elapsed years .........................................................................= 34 

d. Subtract 5 years......................................................................................................- 5 

e. Total years used in computation .............................................................................= 29 

2. Determine Average Indexed Monthly Earnings (AIME).

a. Total Indexed Earnings (from Column E)..............................................................$ 2,975,354.62 

b. Enter the number of months in years included in Total Indexed Earnings

(number of years from line 1e times 12)............................................................... 348 

c. AIME (divide line 2a by 2b and round to the next lower dollar)............................ $ 8,549 

3. Calculate the Primary Insurance Amount (PIA).

a. Calculate the PIA using the following formula.

For Annuity 

Supplement 

Commencing In 

Amount of AIME 

to Be Used

PIA 

Formula

2021 Up through $996 90% of amount 

From $997 through 

$6,002 

$896.40+ 32% 

of amount 

$6,003 and over $ 2,498.32 + 15% 

of amount 

PIA .......................................................................................................................... $ 2,880.37 

b. Enter the amount calculated on 3a, rounded down to the next lower

multiple of $.10 (if not already a multiple of $.10) ..............................................$ 2,880.30 

c. Enter Reduction Factor (from Table E on page 27) ..............................................x .700000 

d. Estimated Social Security Benefit. Multiply line 3b by line 3c,

and round to the next lower dollar.......................................................................= $ 2,016 

4. Calculate Portion of Estimated Social Security Benefit Attributable to FERS Service.

a. Enter total years of FERS civilian service (rounded

to nearest whole number)...................................................................................... 26 

b. Determine multiplier (divide line 4a by 40).......................................................... 0.650000 

c. Enter Estimated Social Security Benefit (from line 3d)........................................x $ 2,016 

d. Monthly Retiree Annuity Supplement. Multiply line 4c by

the multiplier in line 4b, and round to the next lower dollar.................................= $ 1,310