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Discontinued Service Retirement
If you are being separated involuntarily, you may already be retirement eligible. DSR pays an immediate annuity at age 50 with 20 years, or at any age with 25, and under FERS it carries no reduction for your age. This checks every test and shows what the annuity comes with.
Reviewed by Jonathan D., 20-year federal employee · Formulas verified against OPM.gov ·
Years, then extra months. Include military service you have paid a deposit for, and unused sick leave credit.
You need 5 years of civilian service for any annuity. Military service can fill the rest, but never that floor.
You qualify for DSR
$2,042 a month
You qualify for DSR under the 25 years of service at any age rule, and the annuity is $2,042 a month ($24,500 a year) starting the day after you separate.
Involuntary separation that is not a removal for cause on charges of misconduct or delinquency.
✓
Age and service test: passed
25 or more years of creditable service, so age does not matter.
✓
Five years of civilian service: passed
25 years of creditable civilian service clears the 5-year floor.
✓
Did not decline a reasonable offer: passed
No reasonable offer was declined.
The annuity
Before any age reduction
$24,500 a year
Age reduction
None
After the reduction
$24,500 a year
Monthly
$2,042
No age reduction. 5 U.S.C. 8415(h) applies the five-twelfths-of-1-percent-per-month reduction only to retirements under section 8412(g) or 8413(b). A DSR is paid under section 8414, which is not on that list. OPM Handbook ch. 44, 44B2.1-1(A) states it directly: there is no annuity reduction in FERS for a discontinued service annuity under age 55.
What comes with it
FEHB health insurance
Continues into retirement at the regular retiree share, with the government paying its part.
5 U.S.C. 8901(3)(A)(ii) makes someone retiring under section 8414 an "annuitant" for FEHB. 5 U.S.C. 8905(b)(1) then requires enrollment for "the 5 years of service immediately before retirement", the full period since the first chance to enroll, or since a pre-1965 enrollment, "whichever is shortest". 5 CFR 890.303(a)(2) tests this as of the annuity commencing date. Coverage as a family member counts under 8905(b)(2), and OPM may waive the rule in its sole discretion for exceptional circumstances.
FEGLI life insurance
Basic coverage continues or is reinstated, provided you did not already convert to an individual policy.
5 CFR 870.701(a): the employee must be "entitled to retire on an immediate annuity", must have been "insured for the 5 years of service immediately before the date the annuity starts", and must not have converted to an individual policy. A DSR is an immediate annuity, so the test turns only on the 5 years. Note FEGLI measures to the date the annuity starts while FEHB measures to retirement.
FERS annuity supplement
Not payable yet. Your annuity starts now, but the supplement waits until you reach your MRA of 57 years on March 15, 2031. It then runs until age 62.
5 U.S.C. 8421(a)(2) makes a section 8414(a) or (b) annuitant eligible "if such individual is at least the applicable minimum retirement age under section 8412(h)". 5 CFR 842.503(b)(2) says an employee retiring under 842.206 "before attaining the minimum retirement age is not entitled to receive an annuity supplement until he or she attains that age". 5 U.S.C. 8421(a)(3) bars it entirely where the annuity does not commence before 62.
DSR versus severance pay
You cannot take severance pay as well.
Being eligible for an immediate annuity on the day you separate takes you outside the definition of "employee" for severance pay. The annuity is instead of severance, not on top of it. Compare the lifetime value of the annuity against the one-time severance before you do anything that changes your eligibility.
5 U.S.C. 5595(a)(2)(iv) excludes "an employee who is subject to subchapter III of chapter 83 of this title or any other retirement statute or retirement system ... and who, at the time of separation from the service, has fulfilled the requirements for immediate annuity under such a statute or system". 5 CFR 550.704(b)(5) repeats it, and 5 CFR 550.703 defines an immediate annuity as one payable at separation or beginning to accrue within 1 month after it.
How we got this
Age on your separation date: 52 years 9 months.
Creditable service used in the computation: 25 years.
Eligibility rule applied: Eligible: 25 years of service at any age (5 U.S.C. 8414(b)(1); 5 CFR 842.206(a)).
Annuity before any reduction: $98,000 high-3 x 25 years of service x 1 percent = $24,500 a year.
Age reduction: none. A DSR is paid under 5 U.S.C. 8414, and the reduction in 5 U.S.C. 8415(h) reaches only sections 8412(g) and 8413(b).
Service factor: 1 percent. The 1.1 percent factor in 5 U.S.C. 8415(i) needs you to be 62 or older with 20 years at separation, which a DSR case almost never is.
Monthly: $24,500 divided by 12 = $2,042.
Your agency must give you a specific written notice of the involuntary separation. A general rumour of a reorganisation is not enough (OPM Handbook ch. 44, 44A2.1-1).
Unused sick leave adds to the service used to compute the annuity, but it cannot be used to reach the 20-year or 25-year eligibility test (OPM Handbook ch. 44, 44A1.1-2(B) CAUTION).
A survivor election reduces the annuity. This tool shows the figure before any survivor reduction.
If you transferred from CSRS to FERS and your annuity has a CSRS component, the under-55 reduction of 2 percent a year applies to that CSRS component even though the FERS part is unreduced (OPM Handbook ch. 44, 44B2.1-1(A)).
What this models
The honest boundary of this tool. Anything in the right column changes your real number and is not in the math above.
Modeled
Not modeled
✓ Both eligibility tests (25 years at any age, age 50 with 20 years), the 5-year civilian floor, the removal-for-cause exclusion and the reasonable-offer bar.
✕ Whether your agency actually issued the specific written notice the rules require, and whether OPM approved the early-out window. Both are facts only your HR office can confirm.
✓ The FERS annuity at 1 percent of high-3 per year, with no age reduction.
✕ Any CSRS component in a transferred FERS annuity. The under-55 reduction hits that component even though the FERS part is unreduced.
✓ The CSRS tiered formula (1.5, 1.75 and 2 percent) and the 8339(h) reduction counted in full months to your 55th birthday.
✕ The CSRS 1-out-of-2 requirement, and CSRS Offset computations.
✓ FEHB and FEGLI continuation on the 5-year rule, and the FERS supplement starting at your MRA.
✕ Survivor annuity elections and their cost, the earnings test on the supplement, FEDVIP, and any OPM waiver of the 5-year FEHB rule.
✓ The severance pay bar for anyone eligible for an immediate annuity.
✕ The severance amount itself if you are not eligible. Use the severance calculator for that.
✓ Service in whole years and months, as you enter it.
✕ Day-level service arithmetic, and the split between sick leave that counts for the computation and sick leave that cannot be used to reach the 20 or 25-year eligibility test.
Precision limits: service is handled in whole years and months, and the figure shown is before any survivor reduction. OPM works its computation to the day, so your official number can differ by about a month of service either way. This is an estimate for planning, not an OPM determination.
The benefit people do not know they have
DSR is not something you apply for in advance or negotiate. It activates when an involuntary separation lands on someone who already meets the age and service test. A 47-year-old with 25 years of service who gets a RIF notice is retirement eligible that day, with a pension that starts immediately and carries no reduction for being under 55.
The common mistake is assuming early retirement always costs you something. Under FERS it does not. The reduction in 5 U.S.C. 8415(h) reaches MRA+10 retirements and deferred annuities. It does not reach section 8414, which is where DSR lives.
Where CSRS differs, and it is expensive
CSRS employees do take a hit. 5 U.S.C. 8339(h) reduces the annuity by one sixth of 1 percent for every full month under age 55 on the separation date, which is 2 percent a year. Separate at 52 and you are roughly 36 months short, so the reduction is about 6 percent, permanently. It does not unwind when you turn 55.
Two details matter here. The count is in full months to your 55th birthday, with the partial month dropped, which is how OPM builds its own reduction factor table. And if you transferred from CSRS to FERS, only the CSRS component of your annuity takes the reduction.
DSR or severance, never both
This is the trade that catches people out. 5 U.S.C. 5595(a)(2)(iv) writes anyone who has “fulfilled the requirements for immediate annuity” at separation out of the definition of “employee” for severance pay purposes. If you are DSR eligible, severance is not available, full stop.
For most eligible employees that is the right outcome anyway. A $2,000 monthly pension paid over 30 years is $720,000. A severance payment for the same person is usually a five-figure number. Run both and see: Severance Pay Calculator.
Watch the reasonable offer
Under 5 U.S.C. 8414(b)(2), declining a reasonable offer of another position kills the annuity. A reasonable offer has to be in writing, in your agency, in your commuting area, at a grade or pay level no more than 2 below yours, and one you are qualified for. Turn that down and you are not DSR eligible, even with 30 years in.
Refusing a directed reassignment to a job outside your commuting area is the opposite case. 5 U.S.C. 8336(d) says plainly that such a separation is not to be treated as a removal for cause, so it keeps your DSR eligibility intact.
Frequently asked questions
You need a qualifying separation and a qualifying age and service combination. The separation must be involuntary and not a removal for cause on charges of misconduct or delinquency, or a voluntary early out during a restructuring your agency has cleared with OPM. Then you need either 25 years of creditable service at any age, or age 50 with 20 years. The authority is 5 U.S.C. 8414(b) and 5 CFR 842.206 for FERS, and 5 U.S.C. 8336(d) for CSRS.
No. The age reduction in 5 U.S.C. 8415(h) applies only to retirements under section 8412(g), which is MRA+10, and section 8413(b), which is deferred retirement. A DSR is paid under section 8414, which is not on that list. OPM Handbook chapter 44 says it directly: there is no annuity reduction in FERS for employees who retire on a discontinued service annuity under the age of 55. A 47-year-old with 25 years gets an unreduced pension.
Yes, and this is the single biggest difference between the two systems here. Under 5 U.S.C. 8339(h) a CSRS annuity for someone retiring under 8336(d) is reduced by one sixth of 1 percent for each full month the employee is under 55 at the date of separation, which works out to 2 percent a year. It is permanent. OPM Handbook chapter 44 confirms the rate does not increase when the annuitant reaches 55. If you transferred from CSRS to FERS, the reduction hits only the CSRS component.
No. 5 U.S.C. 5595(a)(2)(iv) removes from the definition of "employee" anyone who, at the time of separation, "has fulfilled the requirements for immediate annuity" under a federal retirement system. 5 CFR 550.704(b)(5) says the same. Being DSR eligible on your separation date rules out severance pay entirely. The two are alternatives, not a stack.
At your minimum retirement age, not at separation. 5 U.S.C. 8421(a)(2) makes a section 8414 annuitant eligible for the supplement "if such individual is at least the applicable minimum retirement age", and 5 CFR 842.503(b)(2) says someone retiring under 842.206 before the MRA is not entitled to the supplement until they reach that age. It then runs until age 62 and is subject to the earnings test.
Yes, if you were covered for the 5 years immediately before retirement, or for the full period since your first chance to enrol, whichever is shorter. Time covered as a family member on a family member enrollment counts. The authority is 5 U.S.C. 8905(b), and 5 U.S.C. 8901(3)(A)(ii) is what makes a section 8414 retiree an annuitant for FEHB purposes. OPM can waive the 5-year rule in its sole discretion in exceptional circumstances.
It can cost you the annuity. Under 5 U.S.C. 8414(b)(2) you are not entitled to a DSR if you declined a reasonable offer of another position in your agency for which you are qualified, no more than 2 grades or pay levels below yours, within your commuting area. Note the bar reaches only the involuntary path. It does not apply to a voluntary early out. Refusing a directed reassignment to a job outside your commuting area is different: 5 U.S.C. 8336(d) says in terms that this is not a removal for cause.
Partly. You need at least 5 years of creditable civilian service before anything else counts, under 5 U.S.C. 8410. Above that floor, OPM Handbook chapter 44 says creditable military service may be used to meet the balance of service needed for a discontinued service retirement. For FERS, post-1956 military service needs a paid deposit to be creditable.