Congress created the Federal Employees Retirement System (FERS) in 1986, and it became effective on January 1, 1987. Since that time, new Federal civilian employees who have retirement coverage are covered by FERS.
If you are a federal employee you are enrolled in FERS for your Social Security and Retirement benefits.
So how does this affect a personal Disability policy?
If you become disabled the FERS plan can be converted into a disability policy. So when calculating how much disability insurance you can purchase as an individual, you must reduce the maximum benefit by how much you already have elsewhere (other personal policies, group disability AND the FERS benefits)
Since FERS is hard to calculate at any given time, companies have preset rules, such as:
No DI coverage if in FERS
Treating FERS like a group benefit.
Reducing the amount of DI you can buy based on how many years you’ve been in FERS.Comments