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Table of Contents

SUBCHAPTER 102A CSRS AND FERS .............................................................................................. 1

Part 102A1 General Information ...........................................................................................................................1

Section 100A1.1-1 Overview ....................................................................................................................................1

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

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

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

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

Section 102A1.1-2 Workers’ Compensation Benefits--General ...............................................................................3

A. General Rule...............................................................................................................................................3

B. Benefits Payable .........................................................................................................................................3

Section 102A1.1-3 Rule Against Dual Compensation...............................................................................................5

A. General Rule...............................................................................................................................................5

B. Exceptions...................................................................................................................................................5

Part 102A2 Electing Between Workers' Compensation Benefits and Annuity ........................................................6

Section 102A2.1-1 Electing Between Workers' Compensation Benefits and Annuity .............................................6

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

B. Employees...................................................................................................................................................6

C. Disadvantage of Applying for Annuity.....................................................................................................7

D. Time Limit for Applying for Disability Retirement................................................................................7

E. Payment of a Refund..................................................................................................................................7

F. Agency Responsibility................................................................................................................................8

Section 102A2.1-2 When Workers’ Compensation Benefits Stop ...........................................................................9

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

B. Reverting to Annuity..................................................................................................................................9

Section 102A2.1-3 Survivor Benefits......................................................................................................................10

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

Part 102A3 Credit for Service for Time Spent in Receipt of Workers' Compensation ............................................ 11

Section 102A3.1-1 General Rules...........................................................................................................................11

A. When Employee is in a LWOP Status....................................................................................................11

B. When a Separated Employee Returns to Federal Service ....................................................................11

C. Allowing Full-Time Credit for Employees on Workers’ Compensation Who Work Part- Time but 

Have a Full-Time Appointment.......................................................................................................................14

Section 102A3.1-2 Reemployed Annuitants...........................................................................................................15

A. General Rules ...........................................................................................................................................15

B. Non-Disability Annuitant ........................................................................................................................15

C. Disability Annuity ....................................................................................................................................17

Section 102A3.1-3 Miscellaneous ...........................................................................................................................20
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A. Alternative Annuity and Workers' Compensation ...............................................................................20

B. Salary Supplemented by Workers' Compensation ...............................................................................20

C. Miscellaneous Rules................................................................................................................................. 21

Part 102A4 Job Aids ............................................................................................................................................ 24

Section 102A4.1-1 Job Aids ....................................................................................................................................24

A. Reemployment Status OWCP Chart......................................................................................................24

B. FAQs on Retirement Credit for time spent in OWCP..........................................................................26

C. Sample Documentation of Service ..........................................................................................................32
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Subchapter 102A CSRS and FERS

Part 102A1 General Information

Section 100A1.1-1 Overview

A. Introduction An employee who is disabled or injured in the line of duty may be eligible 

for workers' compensation benefits from the Department of Labor (DOL), 

Office of Workers’ Compensation Programs (OWCP). This subchapter 

explains how the employee's entitlement to workers' compensation benefits 

affects present and future retirement and survivor annuity rights under 

CSRS, CSRS Offset, and FERS.

B. Topics Covered This subchapter covers:

General information about workers' compensation benefits;

The rules about dual compensation;

Making an election between an annuity and workers' 

compensation benefits;

The termination of workers' compensation benefits;

A surviving spouse's election between a survivor annuity and 

workers' compensation death benefits;

Credit for time in receipt of workers' compensation benefits for 

retirement purposes; and

The effect an election to receive workers' compensation benefits 

has on the alternative annuity and other retirement considerations.
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C. Organization of 

Subchapter

This subchapter has four parts.

PART NAME OF PART PAGE

102A1 General Information 1

102A2 Electing Between Workers’ 

Compensation and Disability Annuity

6

102A3 Credit for Service for Time Spent in 

Receipt of Workers' Compensation 

Benefits

11

102A4 Job Aids 24

D. Statement of 

Authority

This subchapter is based on the laws and regulations cited below.

United States Code: 5 U.S.C. 8116, 8332, 8337, 8344, 8411, 8415, 

8464a, and 8468

Code of Federal Regulations: 5 CFR Parts 831 and 842

This subchapter supersedes the following Benefits Administration Letters 

(BAL):

BAL 04-105, 12/7/2004, Enhanced Annuity for Certain FERS 

Employees Receiving Compensation from the Office of Workers’ 

Compensation Programs

BAL 07-103, 7/2/2007, Hatch v. OPM: Allowing Full-Time 

Credit for Employees on Workers’ Compensation Who Work 

Part-Time but Have a Full-Time Appointment
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Section 102A1.1-2 Workers’ Compensation Benefits--General

A. General Rule The Federal Employees' Compensation Act (FECA) authorizes 

payment of workers’ compensation benefits to employees of the 

United States who are disabled due to an employment-related 

disease or injury sustained in the performance of duty. 

Compensation means the money allowance or other benefits 

payable to an employee’s dependents. Therefore compensation 

includes not only money paid for work related disability, but 

also includes payments for medical expenses. The FECA is 

administered by the Department of Labor (DOL, Office of 

Workers' Compensation Programs (OWCP). If the employee 

dies as a result of the employment-related disease or injury, 

OWCP pays compensation benefits to his or her eligible 

dependents.

The primary purpose of workers’ compensation is to provide an 

adequate substitute for an employee’s work-related loss of wage 

earning capacity. When an employee returns to work and 

resumes earning wages at the same or greater than earned before 

the work injury, then compensation is no longer payable.

B. Benefits Payable Benefits provided under the FECA are broken down into six 

basic areas: 

(1) Continuation of Pay (COP)

(2) Compensation for wage loss or wage earning capacity; 

(3) Compensation for permanent disfigurement or loss 

(scheduled award) of use of a body member; 

(4) Payments of medical and related expenses; 

(5) Payment for vocational rehabilitation services; and 

(6) Death benefits. 

FECA does provide other benefits as well. Each of the five 

areas of benefits is summarized below:

(1) Continuation of Pay (COP) - An employee who is 

injured on-the-job is entitled to up to 45 calendar days 

of Continuation of Pay (COP) when medical evidence 

documents that he or she is unable to work. The 

employing agency pays COP rather than the OWCP. 

The period of COP is like any other period of 

creditable civilian service for the purposes of CSRS 

or FERS benefits.

(2) Loss of Wages- An employee who suffers a workrelated disability may be entitled to one or more types 

of wage loss compensation according to the nature or 

type of disability incurred. Compensation based on 

loss of wages due to temporary total disability is paid 

at 66 2/3 percent without dependents. With 

dependents the injured workers is entitled to 
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compensation at the rate of 75% of the salary.

Compensation for wage loss is payable after 

continuation of pay (see Note) ends or from the 

beginning of pay loss.

(3) Disfigurement or Loss of Use (Scheduled Award) -

Under the FECA, compensation in the form of

scheduled award is provided for a specified period for 

the permanent loss of use of certain members and 

functions of the body. Partial loss or loss of use of 

these members and functions is compensated on a 

proportional basis. FECA recipients can receive 

schedule award payments currently with OPM 

annuity payments.

(4) Medical Benefits- The FECA at 5 U.S.C. 8103 

authorizes medical services for treatment of any 

condition which is related to factors of Federal 

employment. No limit is imposed on the amount of 

medical expenses or the length of time for which they 

are paid as long as the charges represent the 

reasonable and customary fees for the services being 

provided and the need for treatment has been 

demonstrated

(5) Vocational Rehabilitation Services- The FECA at 5 

U.S.C. provides for vocational rehabilitation services 

to assist disabled employees in returning to gainful 

employment consistent with their physical, emotional, 

and educational abilities.

(6) Death/Survivor Benefits-The survivors of a Federal 

employee whose death is work-related are entitled to 

benefits in the form of compensation payments, 

funeral expenses, transportation expenses, for the 

remains, if necessary, and payment for termination of 

deceased’s status as a Federal employee.
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Section 102A1.1-3 Rule Against Dual Compensation

A. General Rule The law provides that compensation may not be paid concurrently with 

certain benefits paid by other federal agencies. A federal employee who 

suffers an on-the job injury may be entitled to benefits under the FECA 

and various other sources for the same injury at the same time. Some of 

these sources are CSRS/FERS disability retirement and /or spouse 

benefits, veteran’s disability, or death benefits and Social Security. Some 

of these benefits can be collected by an injured worker at the same time 

that he/she is collecting OWCP benefits, while others are prohibited and 

considered to be dual benefits. Exceptions barring the receipt of dual 

benefits are listed in paragraph B.

CSRS and FERS- CSRS/FERS annuity benefits provided by the Office of 

personnel Management (OPM), either by regular retirement or disability 

retirement cannot be collected by an injured worker who is currently 

receiving workers’ compensation benefits. The employee must make an 

election between workers’ compensation and retirement benefits. Once an

election is made, it can be revoked at any time. If OPM benefits are 

elected, the employee is still entitled to have medical expenses for 

treatment of the accepted condition(s) paid by OWCP.

B. Exceptions There is once exception to the general rule that an employee may not 

receive OWCP and civil service retirement benefits, simultaneously. 

Scheduled benefits (scheduled award payments for permanent impairment 

of certain functions of the body or certain internal or external organs) may 

be paid in addition to CSRS/FERS disability or regular retirement 

annuities.
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Part 102A2 Electing Between Workers' Compensation Benefits and Annuity

Section 102A2.1-1 Electing Between Workers' Compensation Benefits and Annuity

A. General Rule Separated employees who have applied for workers' compensation must 

also apply for retirement benefits to preserve their rights under CSRS or 

FERS. If the employee is eligible for both benefits, he or she must then 

choose between them. The election between workers’ compensation 

benefits and annuity is made by the employee with the OWCP. The 

OWCP then notifies OPM of the election. Applying for retirement benefits 

is the only way the employee's (and his or her survivors’) future annuity 

rights will be protected.

If an employee applies for both benefits, OPM will begin annuity 

payments if OWCP has not awarded, benefits by the time we finalize the 

retirement claim. If OWCP subsequently awards benefits, the annuitant 

must reimburse OPM for annuity that has been paid. Normally, OWCP 

withholds the amount of annuity to be repaid from workers’ compensation 

benefits to reimburse OPM

NOTE: It is not necessary for a separated employee who is eligible 

for an annuity based on age and service to file an application for 

annuity to protect his or her right to an annuity. However, it is 

necessary for him or her to file an application for annuity to 

preserve survivors' rights to CSRS or FERS survivor annuity 

benefits and continued health insurance coverage in the event the 

employee dies and the survivor(s) do not qualify for workers' 

compensation on a continuing basis. Survivors are eligible for 

FECA death benefits only if the employee dies as a result of the 

work-related injury or disease. The OWCP is responsible for 

making this determination.

B. Employees If an annuitant elects to receive workers' compensation benefits, OPM 

suspends payment of his or her annuity during the period that the OWCP 

pays compensation benefits. However, if the compensation benefits end 

for any reason, OPM will reinstate the annuity if the individual remains 

entitled.

NOTE: An election between workers' compensation benefits and a 

CSRS or FERS annuity is not irrevocable. The individual may 

switch between the two benefits whenever it is to his or her 

advantage to do so.
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NOTE 2: The annuitant is responsible for promptly notifying OPM 

of any change in the compensation award (for example, if the 

scheduled award ends and a nonscheduled award begin). In 

addition, the annuitant is responsible for notifying OPM if a claim 

for workers’ compensation is approved after the annuity has begun. 

The annuitant is liable for any overpayment of annuity that occurs 

due to dual payment of benefits while he or she is receiving a 

nonscheduled award.

C. Disadvantage of 

Applying for 

Annuity

An individual who files an application for retirement with OPM and is 

entitled to an annuity, but who elects to receive workers’ compensation 

benefits for loss of wage-earning capacity in lieu of the annuity, is 

considered an annuitant. Unless the person's entitlement to an annuity ends 

(for example, because of recovery from the disabling condition), he or she 

is subject to the rules governing reemployed annuitants upon 

reemployment. This may be a disadvantage if the individual is reemployed 

at a lower grade, on a part-time basis, or does not work long enough to be 

eligible for a supplemental annuity. For further information, see section 

102A3.1-2, Reemployed Annuitants.

D. Time Limit for 

Applying for 

Disability 

Retirement

OPM or the last employing agency must receive a separated employee’s 

disability retirement application within 1 year of the date of separation 

from Federal service unless the person is mentally incompetent.

A former employee will not be eligible for disability retirement benefits if 

he or she did not file a retirement application within the 1-year time limit 

even if workers’ compensation stops. In addition, his or her survivors will 

not be eligible for survivor death benefits because their survivor rights 

would not be established. (The former employee also will not be eligible to 

temporarily continue health benefits coverage under 5 U.S.C. 8905a.)

(1) The 1-year limit does not apply to applications for non-disability 

benefits.

(2) An incomplete disability retirement application, or an application 

on a form not prescribed by OPM, is sufficient for meeting this 1-

year limit. However, to award an annuity, OPM must receive an 

application that is suitable for processing.

E. Payment of a 

Refund

A separated employee, who is not entitled to receive an annuity, including 

an individual who elected to receive workers' compensation benefits in lieu 

of a disability annuity, may receive a refund of his or her retirement 

contributions. However, before applying for the refund, the employee 
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should be aware of the following:

If a separated employee receives a refund, he or she forfeits all annuity 

rights based on the service covered by the refund (including survivor 

benefits) unless the individual is later reemployed in a position subject to 

CSRS or CSRS Offset.

(1) An employee may believe that his or her compensable injury is 

permanent and that workers’ compensation benefits will continue 

for life. However, workers’ compensation benefits are frequently 

interrupted or end because of :

(2) (1) a change in the employee's medical condition, (2) the 

availability of work or (3) rehabilitation.

F. Agency 

Responsibility

The decision to apply or not apply for an annuity and whether to apply for 

a refund of retirement contributions impacts the separating employee’s 

future benefits as well as those of his or her survivors. The employing 

agency should inform separating employees of the rules governing receipt 

of workers’ compensation benefits and annuity so they can make decisions 

based on what they expect their future employability to be.
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Section 102A2.1-2 When Workers’ Compensation Benefits Stop

A. General Rules Many former employees who are eligible for both workers' compensation 

and retirement benefits initially elect to receive workers' compensation 

because it generally is the higher benefit. If workers' compensation 

benefits later end or are reduced, the former employee may elect to receive 

the annuity (unless entitlement to the annuity has ended).

B. Reverting to 

Annuity

In computing the disability annuity (or annuity based on age and service, if 

applicable), OPM cannot allow credit for any period of workers’ 

compensation or Federal service that occurred after the individual 

separated from employment for retirement, even if he or she was receiving 

workers' compensation benefits. Therefore, if an individual chooses to 

receive an annuity, OPM will compute the annuity based on his or her 

service and high-3 average salary as of the date of separation from 

employment, plus all applicable cost-of-living adjustments.

If OPM finds the former employee medically or administratively recovered 

or restored to earning capacity, his or her disability annuity may stop. (See 

Chapter 60)

If the employee performed service subsequent to their retirement, OPM 

will determine if the annuity should terminate based on that reemployment 

and if there are additional annuity benefits due based on that 

reemployment. Any supplemental annuity benefits due or benefits due 

based on a new retirement right would have to be applied for. See Chapter 

100 for additional information on reemployment and the effect on an 

annuitant’s retirement benefit.
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Section 102A2.1-3 Survivor Benefits

A. General Rule The surviving spouse and/or children of an individual who dies as a result 

of a job-related injury or occupational may be eligible for both death 

compensation benefits from OWCP and CSRS and FERS survivor 

benefits. However, the law prohibits concurrent payment of workers' 

compensation death benefits and a survivor annuity. Like the employee, 

the survivor must elect which of the two benefits he or she wishes to 

receive. The election is made with OWCP.

If the surviving spouse elects workers' compensation death benefits, he or 

she is not eligible for the FERS basic employee death benefit. (See 

Chapter 70.)

Generally, once the OWCP determines that a surviving spouse is eligible 

for workers’ compensation death benefits, they remain eligible for life. 

The surviving spouse may elect to take a refund of the deceased’s 

retirement contributions. However, if workers’ compensation death 

benefits terminate, receipt of the lump sum payment of the deceased’s 

retirement contributions terminate any further survivor annuity 

entitlement? The spouse will be required to sign a statement that he/she 

understands that receipt of the lump sum payment will irrevocably waive 

future survivor rights. In some instances, either when OWCP terminates 

payments retroactive to the date of death or if the survivor elects a 

settlement from a third party deemed responsible for the death, the waiver 

will be void and the survivor allowed repaying the lump sum (or having it 

withheld from the retroactive payments).
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Part 102A3 Credit for Service for Time Spent in Receipt of Workers' 

Compensation

Section 102A3.1-1 General Rules

A. When Employee

is in a LWOP 

Status

Separated employees who have applied for workers' compensation must 

also apply for retirement benefits to preserve their rights under CSRS or 

FERS. If the employee is eligible for both benefits, he or she must then 

choose between them. The election between workers’ compensation 

benefits and annuity is made by the employee with the OWCP. The 

OWCP then notifies OPM of the election. Applying for retirement benefits 

is the only way the employee's (and his or her survivors’) future annuity 

rights will be protected.

If an employee applies for both benefits, OPM will begin annuity 

payments if OWCP has not awarded, benefits by the time we finalize the 

retirement claim. If OWCP subsequently awards benefits, the annuitant 

must reimburse OPM for annuity that has been paid. Normally, OWCP 

withholds the amount of annuity to be repaid from workers’ compensation 

benefits to reimburse OPM

NOTE: It is not necessary for a separated employee who is eligible 

for an annuity based on age and service to file an application for 

annuity to protect his or her right to an annuity. However, it is 

necessary for him or her to file an application for annuity to 

preserve survivors' rights to CSRS or FERS survivor annuity 

benefits and continued health insurance coverage in the event the 

employee dies and the survivor(s) do not qualify for workers' 

compensation on a continuing basis. Survivors are eligible for 

FECA death benefits only if the employee dies as a result of the 

work-related injury or disease. The OWCP is responsible for 

making this determination.

B. When a 

Separated 

Employee 

Returns to 

Federal Service

A former employee is an annuitant if he or she filed an application for 

retirement and, in the case of a disability application, OPM approved it and 

meets the eligibility requirements for an annuity. This is true even if the 

individual elected to receive workers’ compensation benefits in lieu of the 

annuity. See section 102A3.1-2 for information about annuitants who 

return to Federal service.

A former employee (but not one who is an annuitant) who returns to 

Federal service after a period of separation is deemed to have been in a 

LWOP status during that part of the separation period in which he or 
12 CSRS Relationship Between Retirement Annuity and Compensation FERS

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she received workers’ compensation benefits. The period of deemed 

LWOP is:

creditable for years of service counted towards eligibility and 

computation of benefits, and in the computation of the high-3 

average salary.

creditable as service under the special retirement provisions for air 

traffic controllers, firefighters, or law enforcement officers if the 

individual’s position of record on the date of separation was 

covered by the special provisions. However, service credit under 

the special provisions for the period in receipt of workers’ 

compensation benefits ends on the date that mandatory separation 

would have occurred if the individual had remained on the 

agency’s rolls.

not considered a break in service or CSRS coverage for 

determining the employee’s retirement coverage upon 

reemployment. Thus, an individual covered by CSRS before 

separation would be subject to mandatory Social Security only if 

at least 366 days had elapsed since workers’ compensation 

benefits stopped before reemployment. See Chapter 10 for further 

information on retirement coverage determinations.

treated as a “break in service” for eligibility to elect FERS. Thus, 

an individual who separated from a CSRS or CSRS Offset position 

may elect to transfer to FERS upon reemployment unless the 

appointment is excluded from FERS coverage by law or 

regulation.

“continuity of service” for an individual who separated from a 

retirement-covered position and who is rehired in a non-covered 

position may be able to continue retirement coverage based on the 

continuity of service rule. No more than 3 days may have elapsed 

between the ending date of workers’ compensation and 

appointment to the non-covered position.

not creditable for meeting the 1-out-of-2 year requirement under 

CSRS/CSRS Offset.

No period of separation, even one in which the employee received 

workers’ compensation benefits, may be credited in meeting the 

requirement that a CSRS or CSRS Offset employee complete 1 year of 

covered service in the 2-year period immediately preceding a nondisability retirement.

Agencies should credit the service of a part-time employee based on the 

work schedule the employee had immediately preceding the separation (or 
 CSRS Relationship Between Retirement Annuity and Compensation FERS 13 

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LWOP). For individuals who worked on an intermittent work basis before 

separation, the agency should determine the number of days worked in the 

week period before separation (or total employment period if less than 52 

weeks). Using the 260-Day Work Year Chart in Chapter 50; determine the 

ratio of the number of days the employee actually worked to the days 

available to work on a full-time basis. Apply that factor to the period of 

separation during which the individual received workers’ compensation 

benefits.

EXAMPLE: John was hired as an intermittent employee July 13, 

1996. He was injured on the job and OWCP approved 

nonscheduled compensation. John’s agency separated him on 

November 28, 1997. During the 52 weeks immediately before his 

separation, John had worked 118 days. The OWCP determined John 

was recovered from his injury and stopped his compensation March 

18, 1999. His agency rehired him March 21, 1999. John received

workers’ compensation benefits 1 year, 3 months, and 20 days (from 

November 28, 1997 through March 18, 1999). Using the 260-Day 

Work Year Chart, that converts to 339 days [(1 year = 260 days) + 

(3 months, 20 days = 79 days) = total of 339 days]

118 (days worked in 52 week period before separation) divided by 

260 days (days in 52 weeks) = .453846

339 days (in receipt of workers’ compensation) multiplied by 

.453846 = 153.8 or 154 days credit

154 days = 7 months, 3 days credit on 260-Day Work Year Chart
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C. Allowing FullTime Credit for 

Employees on 

Workers’ 

Compensation 

Who Work PartTime but Have a 

Full-Time 

Appointment

Employees with a full-time appointment and in receipt of workers’ 

compensation from OWCP who work only part of the day and on 

approved leave without pay (LWOP) for part of the day, will be credited as 

full-time. However, if an employee is not under a full-time appointment 

(e.g., part-time flexible or limited tour), the usual part-time rules apply.

This crediting of full-time is as a result of Hatch v. OPM (Merit Systems 

Protection Board (MSPB) decision September 2005). Prior to this 

decision, OPM’s interpretation of 5 USC 8332(f) and 5 CFR 831.703(b) 

had been that these employees were not entitled to full-time credit for time 

worked when they work part of the day and received workers’ 

compensation benefit part of the day. Their service was treated using parttime rules. The Hatch decision extends to CSRS, CSRS Offset, and FERS 

cases. This decision does not apply to reemployed annuitants.

NOTE: It is not possible for OPM to identify every annuitant who 

fits Hatch profile with part-time service in their annuity computation 

that was processed prior to Hatch litigation began. Therefore, upon 

review of your payroll and records files, if you know of former 

employees who may fall into the Hatch category, provide 

identifying information to OPM at this address: US Office of 

Personnel Management, Benefits Officers Training and 

Development Group, 1900 E Street, NW, Room 4351, Washington, 

DC 20415 or email: benefits@opm.gov .
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Section 102A3.1-2 Reemployed Annuitants

A. General Rules An individual who files an application for and is entitled to an annuity, but 

elects to receive workers’ compensation benefits for loss of wage-earning 

capacity in lieu of the annuity, is considered an annuitant. This is because 

he or she may reverse his or her election and choose to receive an annuity 

in lieu of workers’ compensation benefits at any time. Thus, in the case of 

reemployment, the individual's future benefits must be computed on the 

basis of the laws governing reemployed annuitants.

B. Non-Disability 

Annuitant

The provisions of 5 U.S.C. 8344 or 8468 determine the reemployment 

status of a non-disability annuitant. (See Chapter 100.)

(1) If the individual's right to annuity continues during reemployment, 

he or she will receive credit for the period of separation during 

which he or she received workers’ compensation only if he or she 

is reemployed for 5 years of actual, continuous full-time

employment (or the part-time equivalent), and is otherwise 

eligible for and elects a redetermined annuity. An individual is 

“otherwise eligible” if he or she meets all the requirements, such 

as age and service, to qualify for a particular type of retirement 

benefit. For example, an individual may have retired at age 45 

with 25 years of service when the employing agency had the 

authority to offer voluntary early retirement. If the individual was 

rehired 1 year after retirement and worked 5 years, he or she

would be 51 years old with 30 years of service. The individual 

would not meet the age and service requirements for optional 

retirement, so he or she would not be “otherwise eligible” unless 

the employing agency had the authority and offered voluntary 

early retirement or the individual qualified for discontinued 

service retirement based on involuntary separation.

When an individual is eligible for and elects a redetermined 

annuity, the position of record on the date the individual separated 

to receive workers’ compensation benefits determines service 

credit under the special retirement provisions for air traffic 

controllers, firefighters, or law enforcement officers. If the 

individual separated from a covered position, the period in receipt 

of workers’ compensation benefits is creditable under the special 

provisions not-to-exceed the date the individual would have been 

subject to mandatory separation.

(2) If the individual's right to annuity stops upon reemployment in an 

appointment that provides retirement coverage, he or she will 
16 CSRS Relationship Between Retirement Annuity and Compensation FERS

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receive credit for the period of separation during which he or she 

received workers’ compensation only if he or she establishes a 

new annuity right based on the reemployment service. (Under 

CSRS or CSRS Offset, this would require that the employee meet 

the "1-out-of-2 requirement.") OPM will credit the period in 

receipt of workers’ compensation under the special retirement 

provisions for air traffic controllers, firefighters, or law 

enforcement officers as described in paragraph 1 above for an 

individual who establishes a new annuity right.

EXAMPLE: A voluntary non-disability retiree who elected to 

receive compensation in lieu of annuity is reemployed several years 

later in a part-time position (20 hours per week) at the same grade.

After working in that position for 5 years and 6 months, the 

employee separates.

Is the reemployed annuitant entitled to a redetermined annuity?

No. The right to receive the annuity continues during the period of 

reemployment because the previous retirement was voluntary and nondisability. Thus, the individual is a reemployed annuitant. The part-time 

reemployment service of 5 years and 6 months at 20 hours per week is 

not equivalent to 5 years of full-time reemployment service (it is 

equivalent to 2 years and 9 months of full-time service), so the 

employee is not eligible for a redetermined annuity. Consequently, the 

reemployed annuitant cannot receive credit for the period of separation 

during which he or she received workers’ compensation benefits.

What annuity benefit is the reemployed annuitant entitled to?

The reemployed annuitant is entitled only to a supplemental annuity 

added to the previous annuity. OPM will base the supplemental annuity 

on the period of reemployment only with no credit for the period of 

separation during which the annuitant received workers’ compensation 

benefits. The supplemental annuity will be computed under a part-time 

formula. The entire 5 years, 6 months of service will be credited, but 

the employee’s average annual salary will be adjusted to reflect his or 

her earnings on a part-time work schedule.

See Chapter 100, Reemployed Annuitants, for additional information.
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C. Disability 

Annuity

The reemployment status of a disability annuitant is determined by the 

continuing nature of his or her disability annuity. A reemployed disability 

annuitant can receive service credit for the period he or she was receiving 

workers’ compensation benefits if:

(1) He or she returns to work in an appointment with retirement 

coverage;

(2) OPM determines that he or she is:

a. Recovered from disability; or

b. Restored to earning capacity; and

c. He or she establishes new title to annuity.

EXAMPLE 1: A disability annuitant who retired from a GS-9 fulltime position is awarded workers’ compensation benefits. Later, the 

annuitant is reemployed in a permanent, full-time GS-9 position, 

and the workers’ compensation benefits stop. OPM finds the 

reemployed annuitant recovered from his or her disability 3 months 

after reemployment. Ten months later (sufficient time for a CSRS 

employee to meet the 1-year-out-of-2 requirement) the employee 

resigns.

What annuity benefits is the employee entitled to?

Immediate Annuity - If the employee meets the age and service 

requirements for an immediate voluntary annuity, he or she is 

entitled to that benefit. The requirements for immediate retirement 

are at age 55 (or minimum retirement age (MRA) for FERS) with 30 

years’ service, age 60 with 20 years, or age 62 with 5 years and for 

FERS at MRA with 10 years.

Deferred Annuity - If the employee is not eligible for an immediate 

voluntary annuity, he or she would be entitled to a deferred annuity 

at age 62, or, at the MRA, with 10 years of service under FERS.

Disability Annuity - Because the employee is eligible for an annuity 

(either immediate or deferred) based on the new separation, he or 

she would not be entitled to have the prior disability retirement 

reinstated. However, if OPM finds the employee disabled once 

again at the time of separation, a new disability retirement may be 

awarded.

Service Credit - In all three situations, the period of separation spent 

in receipt of workers’ compensation benefits is creditable to 

determine years of service and to compute an annuity.
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If OPM has not found the disability annuitant/OWCP recipient to be 

recovered or restored, the provisions of law covering reemployed 

annuitants govern the reemployment service. Thus, the period of 

separation during which the individual received workers’ compensation 

benefits (in lieu of a disability annuity) is not creditable unless he or 

she is reemployed for 5 continuous full-time years (or the part-time 

equivalent), is otherwise eligible for, and elects a redetermined annuity.

When OPM receives notification of an annuitant’s reemployment, we 

review the records to determine any effect the reemployment will have 

on the individual's continuing eligibility for benefits based on

disability.

However, continued payment from OWCP for loss of wage-earning 

capacity is prima facie evidence that the person is not recovered. In 

such cases, OPM will not make a finding of recovery unless there is 

contravening medical evidence.

EXAMPLE 2: A disability annuitant who retired from a GS-9 fulltime position is awarded workers’ compensation benefits. Later, the 

annuitant is reemployed in a GS-9 position on a part-time basis, 

with a tour of duty of 20 hours per week. The annuitant continues to 

receive partial OWCP payments for loss of wage-earning capacity. 

The reemployed annuitant resigns after 13 months and elects to 

receive retirement benefits in lieu of workers’ compensation 

benefits.

May the disability annuitant be found recovered from his or her 

disability?

Generally not. Reemployment in a position of the same grade, but with 

a lesser tour of duty, is not considered equivalent employment for 

recovery purposes. Also, continued receipt of OWCP benefits for loss 

of wage-earning capacity is prima facie evidence of nonrecovery. 

Either of these two factors would generally prevent OPM from making 

a recovery finding. Although OPM would only make a finding of 

recovery in this case if recovery were demonstrated by medical 

evidence, the annuitant could voluntarily request to be found recovered. 

OPM will honor a written and signed statement of medical recovery 

voluntarily filed by a disability annuitant when the medical 

documentation on file does not demonstrate that the annuitant is 

mentally incompetent.”
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What annuity benefit is the annuitant entitled to?

The annuitant is only entitled to have the original disability annuity 

reinstated, with the cost-of- living adjustments that had accrued since 

the original separation. OPM cannot pay a supplemental annuity 

because the 13 months of part-time reemployment service is not 

equivalent to 1 year of actual, continuous, full-time service, and the 

period of separation spent in receipt of OWCP benefits cannot be 

credited in computing a supplemental annuity.
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Section 102A3.1-3 Miscellaneous

A. Alternative 

Annuity and 

Workers' 

Compensation

(1) The Department of Labor has ruled that an employee who elects to 

receive nonscheduled workers' compensation is not entitled to the 

lump-sum payment under the alternative annuity provisions (see 

Chapter 53). Receipt of both benefits is considered prohibited dual 

compensation under the Federal Employees' Compensation Act.

(2) If an eligible employee retires, elects the alternative annuity and 

later becomes eligible for and elects workers' compensation 

benefits, the Department of Labor will require that the person 

return all retirement payments, including the alternative annuity 

lump-sum, to OPM, either by direct repayment, or withholding 

from compensation.

EXAMPLE: William retires and elects the alternative annuity. He 

receives a reduced annuity of $1,500 per month and a lump-sum 

payment of $30,000. One year later, William is awarded and elects 

workers' compensation benefits that total $2,000 per month.

During a 1-year period of retirement, William would have received 

$48,000 ($1,500 x 12 months +

$30,000 lump sum) in retirement benefits. Workers' compensation 

benefits for the same period of time would be $24,000 ($2,000 x 12 

months). Consequently, William has been overpaid $24,000 

($48,000 -$24,000).

B. Salary 

Supplemented by 

Workers' 

Compensation

When computing the high-3 average salary for an employee whose salary 

is being supplemented by workers' compensation benefits, use only the 

basic salary rate of the position. Do not include any payments from 

OWCP. See Chapter 50, Computation of Annuity, for guidance in 

computing basic rates; see Chapter 55, Computation for Part-Time 

Employees, for guidance in computing the average salary for part-time 

employees; and, see Chapter 100, Reemployed Annuitants, section 

100A4.1-1, for computing the basic rate when an offset is involved.

EXAMPLE: Dick retires on disability from a GS-13 position. His 

high-3 average salary was $87,000.00. He receives workers’ 

compensation benefits for 3 years. He is then reemployed in a GS-5 

position.

OWCP pays benefits equal to the difference between the GS-5 pay 

and 75 percent of the GS-13 pay. Because the GS-5 position is not 

equivalent to the GS-13 position, OPM does not find Dick 

recovered from his disability. Therefore, his reemployment falls 

under reemployed annuitant rules. Also, because the GS-5 pay does 

not equal or exceed 80 percent of the GS-13 pay, Dick is not found 

restored to earning capacity during the period of reemployment.

Dick works full-time for 5 continuous years and then separates. He 

is entitled to either a supplemental annuity or a redetermined 

annuity. OPM would base the supplemental annuity on Dick’s 5 
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years of reemployment service and his average salary (excluding the 

workers’ compensation benefits that supplemented his salary) for 

those 5 years. OPM would add the supplemental annuity to the 

disability annuity Dick was previously awarded. OPM would base 

the redetermined annuity on all of Dick's service, including the

period of separation during which he received workers’ 

compensation benefits. The redetermined annuity would replace the 

disability annuity Dick was previously awarded.

However, Dick's GS-5 salary for the last 5 years was significantly 

below the GS-13 salary he was previously paid. (The workers’ 

compensation payments that supplemented Dick’s GS-5 salary 

cannot be counted for high-3 average salary purposes.) Thus, Dick’s 

high-3 period would likely be from a period before the date of 

reemployment. The disability annuity plus supplemental annuity 

may provide the greater benefit. In situations like this, an agency 

needs to compute both the supplemental annuity and redetermined 

annuity to counsel an employee his or her options. When processing 

the retirement application, OPM would allow Dick to elect between 

the supplemental and re-determined annuity benefits.

See Chapter 50, Computation of Annuity, for examples of how this 

enhanced formula is computed.

C. Miscellaneous 

Rules

Enhanced Annuity for certain FERS Employees Receiving 

Compensation from the Office of Workers’ Compensation Programs 

(OWCP)

Public Law 108-92, effective October 3, 2003, amended title 5, United 

States Code, Section 8415. The new subsection 5 U.S.C. 8415(l) 

provides a one percent (1%) annuity enhancement for certain FERS 

employees who received disability compensation from OWCP whose 

final separation occurred on or after October 3, 2003. This provision 

was designed to make up for FERS beneficiaries’ inability to 

participate in Social Security or the Thrift Savings Plan during a period 

of absence from the workplace while receiving workers’ compensation 

benefits.

Eligibility for an Enhanced Annuity under 5 U.S.C. 8415(l)

A FERS employee who receives OWCP benefits during qualifying 

periods of absence is eligible for the enhanced 1% annuity computation 

if the sum of all qualifying periods of absence totals two (2) months or 

more. An employee’s qualifying periods of absence include:

a period of leave without pay (LWOP) while the employee is 

performing no work and is receiving OWCP benefits

a period of separation from service while receiving OWCP 

benefits, if the former employee is later reinstated in Federal 

service and earns title to a FERS annuity, and

a period of retirement while receiving OWCP benefits in lieu of 

annuity payments, if the annuitant is later reemployed in the 
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Federal service and earns title to a new FERS annuity.

If an employee transferred from the Civil Service Retirement System 

(CSRS) to FERS, the enhanced formula will apply to any qualifying 

periods that are creditable under FERS rules (i.e., periods that are not 

part of the employee’s CSRS component). For purposes of PL 108-92, 

disability compensation from OWCP includes the following types of 

benefits: total disability, temporary total disability, scheduled awards 

and wage loss.

OWCP Benefit and Disability Retirement

Employees are encouraged to apply for OWCP and disability 

retirement simultaneously. This process provides a safety net because 

an annuitant may have his or her disability annuity reinstated if OWCP 

benefits are terminated for any reason, and it protects survivor benefits 

in the event that the annuitant dies from an injury or illness not related 

to his or her job injury. The annuitant must choose between OWCP and 

disability retirement when both benefits are approved. In FERS 

disability cases the OWCP enhanced formula will be added to the 

“earned annuity” computation, and does not apply to the FERS 

disability annuity computed using the 60 percent or 40 percent of the 

high-3 average salary.

Annuitant who Returns to Work

An annuitant may qualify for the enhanced formula for the periods 

when he or she received OWCP benefits in lieu of annuity, if he or she 

returns to work and retires with a new FERS annuity on or after 

October 3, 2003.

If the original annuity terminates on reemployment, and the employee 

separates meeting the age and service requirements for a new FERS 

annuity, the employee may receive credit under the enhanced formula 

for qualifying periods of absence when he or she received OWCP 

benefits, including periods when he or she received OWCP benefits in 

lieu of annuity.

If the original annuity does not terminate upon reemployment, and the 

reemployed annuitant works long enough to meet the eligibility criteria 

for a redetermined annuity under FERS (five years of actual, 

continuous, full-time reemployed service, or part-time reemployed 

service equivalent to 5 years of full-time service), the employee may 

receive credit under the enhanced formula for qualifying periods of 

absence when he or she received OWCP benefits, including periods 

when he or she received OWCP benefits in lieu of annuity.

Disability Annuitant Who’s Annuity Terminates Without

Reemployment

If a disability annuity terminates due to restoration or medical recovery, 

and the annuitant is not reemployed, he or she has a “deemed 

involuntary separation” and may be eligible for a new non disability 
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retirement benefit. See Chapter 60. If a disability annuity that began 

before October 3, 2003, terminates on or after October 3, 2003, and the 

annuitant is not reemployed, OPM will apply the enhanced formula in 

the computation of the non-disability benefit that results from the 

deemed involuntary separation. OPM will apply the enhanced formula 

to qualifying periods of absence when the annuitant received OWCP 

benefits before he or she initially retired on disability. However, unless 

the annuitant earns title to a new annuity based on reemployment, OPM 

will not credit periods after the annuitant’s original separation for 

disability retirement.

Disability Annuitant Whose Annuity is Recomputed at Age 62

When a FERS disability is recomputed at age 62, the amount of service 

used in that computation includes the amount of actual creditable 

service the individual performed before retirement plus the amount of 

time during which the individual received disability annuity or received 

OWCP benefits in lieu of disability annuity. The time during which the 

individual received disability annuity or OWCP benefits in lieu of 

disability annuity is not a qualifying period of absence under Public 

Law 108-92 and the individual is not entitled to the enhanced formula 

for that time. The individual also is not entitled to the enhanced formula 

for any time before the original disability retirement during which he or 

she may have received OWCP benefits if the original disability 

retirement was based on a separation before October 3, 2003.

Documentation of Service

To ensure accurate processing of claims, on the FERS retirement 

application (Standard Form 3107-1)

1

, the human resource office must 

document OWCP time under the Certified Summary of Federal 

Service, Section B of the retirement application. Make a separate entry 

for each qualifying period of absence when the employee received 

OWCP benefits that is documented in the employee’s Official 

Personnel Folder (OPF) and reference P.L. 108-92. Please also note any 

additional OWCP time the employee may claim that is not verified in 

the OPF. OPM will verify the OWCP time when it receives the 

retirement package.

 

1

 See Section 102A4.1-1 for Sample SF 3107-1.
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Part 102A4 Job Aids

Section 102A4.1-1 Job Aids

A. Reemployment Status 

OWCP Chart

The below chart assists in determining Reemployment Status 

and Future Annuity Rights of Annuitants Reemployed After 

Receiving Workers’ Compensation Benefits
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October, 2013 CSRS and FERS Handbook Reemployment Status and Future Annuity Rights of Annuitants Reemployed After Receiving Workers’ Compensation Benefits SERVICE CREDITED FOR COMPUTATION PURPOSES No additional service credit OPM credits the entire period of reemployment service for the purpose of the supplemental annuity. The average annual salary will be adjusted if the individual worked part-time. OPM credits all prior creditable periods of service, periods of separation during which the person was in receipt of workers’ compensation benefits, and the period of reemployment service in the computation of the redetermined (new) annuity. The computation is based on the general formula, with the appropriate part-time proration factor(s) applied if the individual worked part-time. OPM credits only the service that they credited in the original annuity.

1 If the person is rehired before the starting date of the annuity, the right to an annuity stops.2 Individuals who retired on Discontinued Service Retirement (DSR), Voluntary Early Retirement or Disability may not meet the age and service requirements to have their annuity redetermined even if they have 5 years of reemployment service. For example, a pe rson who retired under either DSR or Voluntary Early Retirement at age 45 with 25 years of service would be 50 years old with 30 years of service after 5 y ears of reemployment. After 5 years of reemployment, this person would not be eligible for a redetermined annuity unless he or she was being involuntarily separated and qualified for DSR or the agency had the authority to offer Voluntary Early Retirement because the age requirement for voluntary retirement is not met.

BENEFITS ON SEPARATION

Original annuityPlus a supplemental annuity if reemployment equals or exceeds the equivalent of 1 year of actual full-time, continuous service.If reemployment equals or exceeds the equivalent of 5 years of actual full-time, continuous service, and the person otherwise meets the age and service requirements for retirement

2, he or she may elect a redetermined 

annuity instead of the original annuity plus the supplemental annuity.If the person is eligible for an immediate or deferred annuity based on the period of reemployment (CSRS and CSRS Offset employees must meet the 1- year-out-of-2 rule to qualify for a non-disability annuity), the original annuity is not reinstated.If the person is not eligible for an immediate or deferred annuity based on the period of reemployment, the original annuity is reinstated.

ANNUITY STATUS

Right to annuity continues; andDuring the period of reemployment, the agency must deduct an amount equal to the annuity from the employee’s salary.Annuity stops on reemployment

TYPE OF ANNUITY

Voluntary Non-Disability (including Voluntary Early Retirement)Disability not recovered or restored to earning capacityCSRS Discontinued Service Annuity – rehired in noncovered appointmentFERS Discontinued Service RetirementFERS MRA+10 or Early Deferred

1

MandatoryCSRS Discontinued Service Retirement – rehired in a covered positionDisability found recovered or restored to earning capacity
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B. FAQs on Retirement 

Credit for time spent in 

OWCP

The below FAQ addresses Commonly Asked Questions and 

Answers on Retirement Credit for Time Spent in Receipt of 

Workers’ Compensation Benefits
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I. Service Credit Generally 

Q-1. Do retiring employees receive full credit in their retirement computation for periods of LWOP 

and separation during which they received workers’ compensation benefits?

A-1. Yes. So long as the period(s) involved occurred before the separation from employment that 

makes the individual eligible for an annuity, this service is available as service credit for length of 

service, high- 3 average salary, and computation purposes. However, the service may be credited 

under part-time rules if the employee was working a part-time schedule. If the employee was on a 

full-time schedule, working part-time, and receiving workers’ compensation benefits for part of the 

day, full-time credit is given. This provision does not apply to reemployed annuitants. 

Q-2. Is there any purpose for which a period of separation during which the employee received 

workers’ compensation benefits cannot be credited? 

A-2. Yes. A period of separation cannot be credited in meeting the 1-year-out-of-2 provision of 5 

U.S.C. 8333(b) applicable to CSRS employees, even though the individual was receiving workers’ 

compensation benefits. 

Q-3. What is the 1-year-out-of-2 provision? 

A-3. A CSRS or CSRS Offset employee must complete 1 year of creditable service subject to 

retirement deductions in the 2 years immediately preceding his or her separation to qualify for a nondisability retirement based on that separation. FERS does not have the same requirement. 

II. Employees and Annuitants 

Q-4. What is the difference between a separated employee and an annuitant? 

A-4. A separated employee is a former Federal employee who was covered by CSRS, CSRS Offset, or 

FERS. An annuitant is a separated employee whose application for either a CSRS, >CSRS Offset< or 

FERS annuity has been received by OPM (or, when appropriate, the employing agency) and who 

meets the requirements for that benefit. For individuals who are applying for a regular benefit based 

on age and service, "meeting all the requirements" means the person 1) has separated from his or her 

employing agency; 2) meets the appropriate age and service requirements; and 3) has filed an 

application for annuity with OPM (or, when appropriate, the employing agency). However, OPM must 

make a finding of disability before annuitant status can be established for an applicant for disability 

annuity. 

Q-5. Is an annuitant who elects to receive workers’ compensation benefits for loss of wage-earning 

capacity in lieu of annuity still considered an annuitant? 

A-5. Yes. This is because he or she may reverse his or her election and choose to receive annuity in 

lieu of workers’ compensation benefits at any time.
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Q-6. How can annuitants receive retirement credit for periods of separation after retirement during 

which they received workers’ compensation benefits in lieu of civil service annuity?

A-6. Annuitants can credit periods of separation during which they received workers’ compensation 

benefits in lieu of annuity by 1) being reemployed after the period of receipt of workers’ compensation 

benefits and 2) becoming eligible for an immediate or deferred annuity as a result of such 

reemployment. 

III. Reemployed Annuitants

Q-7. How does an annuitant earn a new right to an immediate or deferred annuity based on 

reemployment? 

A-7. If an annuitant’s right to annuity stops on or during reemployment, he or she has earned a new 

right to an immediate or deferred annuity when separated from such employment. However, CSRS 

and CSRS Offset employees must also meet the 1-out-of-2 year requirement. If the annuitant’s right to 

annuity continues during reemployment, he or she has earned a new right to annuity only if he or she 

completes the equivalent of 5 full-time, continuous years and earns a right to a redetermined annuity. 

Q-8. What kinds of annuities stop on or during reemployment? 

A-8. Under CSRS or CSRS Offset, a discontinued service annuity stops when the employee is 

reemployed in an appointment that is not excluded from CSRS coverage by law or regulation. Other 

CSRS or CSRS Offset annuities stop when the annuitant is reemployed under special circumstances, 

such as a Member of Congress or a Presidential appointee. All other annuities, and the right to receive 

annuity, are not directly affected by reemployment. However, special rules apply to disability 

annuities that stop during reemployment. 

Q-9. What are the special rules that apply to disability annuities that stop during reemployment? 

A-9. When OPM finds a CSRS, CSRS Offset<or FERS disability annuitant recovered or restored to 

earning capacity, the date the annuity stops may be affected by Government employment. A disability 

annuity usually stops 1 year after the date OPM has found the annuitant recovered, or 6 months after 

the end of the calendar year in which OPM has found the annuitant restored to earning capacity. When 

a disability annuitant who has been found recovered or restored to earning capacity is reemployed in a 

Government position before the usual termination date of annuity, the annuity stops on the later of (1) 

the date of reemployment or (2) the date of OPM's finding. The Government position must be at the 

same or higher grade or pay level and tenure as the position from which the disability annuitant 

retired. 

Government means: 

the Government of the United States and Gallaudet University; 
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nonappropriated fund instrumentalities (NAFI) of the Department of Defense or Coast Guard 

for eligible individuals who continued their CSRS or FERS coverage in NAFI positions; and 

the government of the District of Columbia when the annuitant was first employed subject to 

CSRS by the District of Columbia before October 1, 1987 or is an employee of the 

government of the District of Columbia not excluded from CSRS under section 831.201(g) 

or 831.201(i) of title 5, Code of Federal Regulations, or is an employee of the District of 

Columbia who is deemed to be a Federal employee for FERS purposes under section 

842.107 or 842.108 of title 5, Code of Federal Regulations. 

Q-10. On what basis can a disability annuitant be found recovered? 

A-10. OPM will find a disability annuitant recovered from his or her disability if: 

medical evidence shows that the medical condition that initially caused the disability has 

improved so that the annuitant is no longer disabled for the position from which he or she 

retired, or 

the annuitant is permanently reemployed, under CSRS, CSRS Offset, or FERS, in a 

position of the same or higher grade or pay level and tenure as the position from which he 

or she retired. For this purpose, pay level means current basic pay, and is the hourly rate 

times the number of hours in the tour of duty. 

Q-11. What circumstances will prevent OPM from making a recovery finding on the basis of 

reemployment? 

A-11. If the disability annuitant is age 60 or over, OPM will only find him or her found recovered at 

the annuitant’s own request. In addition, if the reemployed disability annuitant continues to receive 

workers’ compensation benefits on the basis of loss of earning capacity, a recovery finding on the 

basis of reemployment normally is inappropriate. 

Q-12. May a reemployed disability annuitant request OPM to make a finding of recovery from 

disability, and what effect does the request have? 

A-12. Yes. A reemployed disability annuitant may request to be found recovered from his or her 

disability at any age. A disability annuitant age 60 or over may only be found recovered on his or her 

own request. 

Q-13. On what basis may a disability annuitant be found restored to earning capacity? 

A-13. A disability annuitant is deemed restored to earning capacity when, in any calendar year in 

which the annuitant is under age 60 (on December 31), the annuitant's earnings equal or exceed 80 

percent of the current pay of the position from which the annuitant retired. 
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Q-14. Are workers’ compensation benefits counted as part of a disability annuitant's earnings for 

restoration to earning capacity purposes, or as part of his or her salary for average salary 

purposes? 

A-14. No. 

Q-15. How is average salary computed, especially when the employee is working a part-time 

schedule? 

A-15. It depends. If the annuity continued during reemployment and the annuitant is eligible for a 

supplemental annuity, OPM uses the annual rate of basic pay the employee actually received to 

compute the average salary for a supplemental annuity. OPM uses an average of the basic salary for 

the entire period of reemployment rather than an average of the 3 highest consecutive years. For 

example, the average salary for an employee who worked 20 hours per week at an annual full-time 

rate of $60,000 for 1 year and $65,000 for 1 year would be $31,250 ($30,000 + $32,500 = $62,500 

divided by 2 = $31,250). 

Regular part-time rules apply depending on whether the individual is CSRS (or CSRS Offset) or FERS 

or if the individual had part-time service in a Veterans Health Administration position (see Chapter 

55) when: 

The annuity continues during reemployment and the annuitant qualifies for and elects a 

redetermined annuity. 

The annuity stops during reemployment and the annuitant earns new title to an immediate or 

deferred annuity. 

Q-16. What CSRS or FERS benefits are payable if the reemployed annuitant (whose annuity 

stopped on or during reemployment) separates without new title to either immediate or deferred 

annuity? 

A-16. If a non-disability annuity stopped on or during reemployment, it may be reinstated as of the 

date of separation. If a disability annuity stopped on or during reemployment, and the employee is (1) 

still, or once again, disabled by the same medical condition, and (2) under age 62, the disability 

annuity may be reinstated. If a disability annuity stopped on or during reemployment, but the 

employee does not meet the above, he or she may be entitled to discontinued service annuity based on 

the termination of the disability annuity. To meet this requirement, he or she would need to have had 

25 years of service when he or she initially retired, or 20 years of service, and be age 50 or over when 

the disability annuity stopped. If none of the above circumstances apply to the employee, he or she 

will be entitled to a deferred annuity based on the prior separation for retirement. 
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Q-17. What benefits would be payable to a reemployed annuitant (whose annuity did not stop 

during reemployment) if he or she is not entitled to a redetermined annuity? 

A-17. If the annuitant completed at least 1 year of actual, continuous full-time reemployment service, 

or its part-time equivalent, he or she would be entitled to a supplemental annuity. A supplemental 

annuity is added onto the regular annuity. 

Q-18. Can periods of separation during which the annuitant received workers’ compensation 

benefits be included in the computation of the supplemental annuity? 

A-18. No. Only actual reemployment service may be used to compute a supplemental annuity.
32 CSRS Relationship Between Retirement Annuity and Compensation FERS

 for Work-Related Injuries and Disease 

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CSRS and FERS Handbook October, 2013 

C. Sample Documentation of 

Service

Find below a sample Certified Summary of Federal Service 

(FERS) (SF 3107-1).