Guides · Updated July 31, 2026
What Happens After 10 Years of Federal Service
After 10 years, leaving your FERS contributions with OPM can preserve a future deferred pension; a refund forfeits it. Compare start ages, TSP, FEHB, and FEGLI.
Leaving federal service after 10 years keeps your FERS pension alive, but only if you leave your retirement contributions with OPM instead of cashing them out. Vesting takes just 5 years of creditable civilian service, and once you reach 10 years, you qualify for a deferred annuity you can start collecting later. Take a refund of those contributions, though, and you give up that future pension entirely.
This page covers FERS employees who separate with 10 or more years of service but haven't yet reached the age and service combination for an immediate retirement. That means your pension waits rather than starts right away, with real choices ahead about your contributions, your TSP, and your timing.
Refund, deferred annuity, or MRA+10: how the choices compare
Once you have 10 or more years in, several separate decisions shape your payout: whether you take a refund or leave your contributions with OPM, how many years of service you have, when you start the annuity, and whether you separate before or after reaching your Minimum Retirement Age (MRA).
| Your situation or choice | What it means for your pension | Good to know |
|---|---|---|
| Take a refund of your FERS contributions | You get the money now, but give up the future annuity entirely | No deferred annuity later, even with 10+ years of service |
| Leave your contributions with OPM | Preserves eligibility for a deferred annuity | Requires at least 5 years of creditable civilian service to vest |
| 10-19 years of service, annuity starts at your MRA | Reduced 5% for each year you're under 62, prorated by month | Reduction is permanent once payments begin |
| 10-19 years of service, annuity starts at 62 | Full computed amount, no age reduction | Same underlying formula, just no early-start penalty |
| 20-29 years of service, annuity starts before age 60 | Same 5%-per-year reduction under 62 still applies | The 20-year exception only kicks in at age 60, not sooner |
| 20-29 years of service, annuity starts at age 60 or later | No age reduction | A second way (besides waiting to 62) to avoid the cut |
| 30 or more years of service, annuity starts at MRA | No age reduction, regardless of your age | This service length clears the reduction entirely |
| Deferred retirement (you separate before reaching MRA) | You wait until MRA or 62 to start collecting; FEHB and FEGLI cannot be reinstated | Applies when you have 10+ years but hadn't yet reached MRA at separation |
| MRA+10 retirement (you separate at or after reaching MRA) | Take the annuity right away (reduced if under 62), or postpone the start to reduce or avoid that cut | If eligible before separating, FEHB/FEGLI can resume once a postponed annuity begins; this differs from true deferred retirement |
Once you know your contributions can lock in a future pension, the next question is usually 'how much, and what do I actually keep along the way?' The mechanics matter more than the headline number.
How the deferred pension gets calculated
Your deferred annuity uses the same basic formula OPM applies to every FERS pension: years of creditable service multiplied by your high-3 average salary, multiplied by a percentage factor (typically 1% for someone leaving with 10 to 15 years and starting before age 62). The high-3 is the average of your highest three consecutive years of base pay, and it excludes overtime, night differential, and bonuses. That salary figure locks in on your separation date and doesn't rise with inflation or agency raises while you wait to start collecting. As a base estimate before any commencement-age reduction, a $110,000 high-3 with 15 years of service works out to roughly $16,500 a year. Your actual factor, service credit, and any applicable reduction depend on your specific record, so treat this as a starting point rather than a final number.
Why unused sick leave doesn't count
If you're used to hearing that sick leave boosts a federal pension, that's true mainly for immediate retirements. For a deferred annuity, accrued and unused sick leave isn't creditable, for eligibility or for the calculation, according to the OPM CSRS/FERS Handbook. In an immediate retirement, banked sick leave gets added to your service time and can meaningfully raise the payout. Leave before you qualify for an immediate annuity, and that credit disappears from the math entirely.
What happens to your TSP
Your TSP account is separate from your pension and isn't tied to your annuity start date. Your own contributions and agency matching funds are yours right away, but the agency automatic 1% contribution generally requires 3 years of service to vest (2 years for certain positions), according to TSP guidance on vesting. After separation you can leave the balance invested, roll it into an IRA or another employer plan, take a partial or total distribution, or set up installments, according to TSP's guidance on post-separation withdrawals. Nothing about a deferred pension forces a TSP decision on any particular timeline.
Why FEHB and FEGLI don't carry over automatically
This is where true deferred retirement, separating before you reach your Minimum Retirement Age, differs sharply from retiring immediately. Federal health and life insurance continue into retirement only when you separate on an immediate annuity that begins within 30 days of your last day, with five years of enrollment beforehand. If you separate before your MRA and later start a deferred annuity, FEHB and FEGLI end at separation for good: FEHB offers a paid temporary continuation option for a limited period, and FEGLI offers a separate conversion to an individual policy shortly after separation, but neither reinstates when your deferred payments begin. If you're eligible for MRA+10 and choose to postpone your annuity rather than take a true deferred retirement, coverage can resume once payments start, a meaningful distinction worth confirming with OPM before you decide how to file.
None of this is legal or financial advice, and OPM's own guidance is the place to confirm your specific numbers. Once you have a clearer read on your benefits picture, it's worth using that time productively. You can sign up with FedUp.work to see how your federal resume translates into private-sector roles, and the federal-to-private transition guide covers the bigger-picture timeline questions this page doesn't.
Quick answers about pensions, vesting, and TSP after 10 years
How much pension will I get after 10 years of federal service?
There's no single number, it depends on your high-3 salary and when you start collecting. The base formula is years of creditable service times your high-3 average salary times a percentage factor, usually 1% for someone in this service range. That figure is a starting estimate before any reduction for starting the annuity before age 62, and it won't grow with future raises or inflation while you wait.
What's the 5-year rule everyone mentions?
It's the vesting line. Complete 5 years of creditable civilian service and you're entitled to a FERS pension down the road, even if you leave government today. Fall short of 5 years, and there's no future pension waiting for you, no matter how the rest of your service played out.
What happens if I leave before hitting 5 years?
You won't be vested, so there's no deferred annuity to claim later. You can ask for a refund of the retirement contributions you personally paid in, and interest may be added depending on how long the money sat and other OPM conditions. Your TSP is separate: your own contributions are always yours regardless of pension vesting.
What should I do with my TSP once I separate?
Nothing forces an immediate decision. You can leave the balance invested, roll it into an IRA or a new employer's plan, or begin withdrawals under the usual tax rules. The agency's automatic 1% contribution generally needs 3 years of service to vest, though certain positions use a 2-year period, so check that separately from your pension timeline.
Sources and further reading
- 5 CFR 842.212, Deferred Retirement: Sets deferred annuity eligibility and commencing dates for employees with 5 or more, or 10 or more, years of service.
- OPM Pamphlet RI 92-19a: Applying for a Deferred or Postponed Annuity: Covers the age reduction for annuities starting before 62 and how deferred versus postponed status affects health and life insurance.
- CSRS/FERS Handbook, Chapter 40: Benefits Into Retirement: OPM's rules for continuing FEHB and FEGLI into retirement, including the MRA+10 postponed-annuity option.
- MRA+10 Guide for HR Specialists: Distinguishes deferred retirement from MRA+10 retirement and confirms FEHB and FEGLI cannot be reinstated after a deferred retirement.
- TSP Bulletin 15-1: Vesting Requirements: Explains TSP vesting for the agency automatic 1% contribution.
- TSP: Withdrawals in Retirement: Details TSP choices after separation: leaving the balance, rolling it over, or withdrawing it.
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