Why Am I Eligible for Lower Monthly Benefit Amounts if I Am a Federal Employee?

Almost all federal and Veteran’s Association (VA) employees are enrolled in the Federal Employees Retirement System (FERS), regardless of the agency at which they work, and are provided with reduced disability insurance retirement benefits under the FERS. The plan provides 60% income replacement during the first 12 months that disability insurance benefits are paid, and 40% for each year thereafter until reaching early retirement age, at which point the FERS pension begins to be distributed. Most insurance carriers base their offering on a 40% group insurance factor. However, there are some carriers that stop offering coverage once a federal employee has more than 10 years of service or reaches age 50 or 55.