As a federal employee, you hold a pension plan. Dependent on the time you started, you either have a FERS, CSRS or CSRS-Offset. They are fairly similar, but also hold a few different characteristics. Below is a breakdown of information of what is offered to you through your agency:
The Federal Employees Retirement System, also known as FERS, is a retirement plan that offers three different funnels: Your Basic Benefit Plan (Pension), Thrift Savings Plan, also known as TSP, and Social Security. This vehicle took the place of CSRS on Jan 1st, 1987, so any new employees now hold a FERS instead of CSRS.
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Within FERS, each employee must pay a portion from their paycheck into Social Security and the Basic Benefit, which are paid in the form of deductions and the federal agency contributes a portion as well. If you were to leave one place of employment and go to another, you are able to take the TSP and Social Security portion with you. Furthermore, once you retire, you can begin to collect a monthly annuity payment for the remainder of your life.
When it comes to eligibility, it is determined by your age as well as the amount of your creditable service years. Typically, in order to receive benefits at retirement, the Minimum Retirement Age must be met. Additionally, below are the benefits within the Basic Benefits Plan of FERS:
- Immediate: If you retire at the Minimum Age Requirement with at least 10 years of service (however, not less than 30), your benefit will lowered 5% each year under the age of 62. However if you have at least 20 service years, you can begin benefits at 60 years of age.
- Early: This can be accessed in certain involuntary separation cases and in cases of voluntary separations during a major reorganization or reduction in force.
- Deferred: This provides the same benefits as the “Immediate”category above.
- Disability: Disability must occur while actively employed in your position, and the disease or injury must completely prevent you from being efficient and effective in that position. Additionally, disability must last for at least one year or more and the agency must confirm that they are unable to accommodate your disability in that position. They must also note that they have considered you for any vacant position in the same agency at the same grade/pay level, within the same commuting area, for which you are qualified for reassignment.
To learn more about your FERS plan and to set up a complimentary review of your benefits with one of our specialists, contact us today
The Civil Service Retirement System is a defined benefit, contributory retirement system that was first established in 1920. It has since been replaced with the Federal Employees Retirement System, but remains active among those who became employed before January 1, 1987.
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Employees contribute between 7 and 8% of their pay into the annuity and the employing agency matches them. If an employee would like to contribute more, they may do so up to 10% of their basic pay for creditable service to a voluntary contribution account.
There are five categories of benefits under the Civil Service Retirement System (CSRS). Eligibility is based on your age and the number of years of creditable service and any other special requirements. In addition, you must have served in a position subject to CSRS coverage for one of the last two years before your retirement. If you meet one of the following sets of requirements, you may be eligible for an immediate retirement benefit. An immediate annuity is one that begins within 30 days after your separation.
Your basic annuity is computed based on your length of service and “high-3” average salary. You also receive credit for unused sick leave if you retire on an immediate annuity. To determine your length of service for computation, add all your periods of creditable service, and the period represented by your unused sick leave, then eliminate any fractional part of a month from the total.
To learn more about your CSRS defined plan and to set up a complimentary review of your benefits with one of our specialists, contact us today.
CSRS-Offset was established for federal employees who attained at least five civilian federal service creditable years while under CSRS, but they are also underneath the Social Security System. Those who are covered under CSRS-Offset pay a smaller portion into CSRS with a larger portion going towards Social Security. CSRS retirement and survivor benefits are offset by the value of the Offset service in their Social Security benefits.
Learn More About CSRS-Offset
Employees under CSRS-Offset are not considered to be fully in the Civil Service Retirement system or the Federal Employees Retirement System. However, this system aligns most with what CSRS offers with an additional benefit of full Social Security coverage.
Most people under CSRS-Offset once were in CSRS, but had a break in their federal service. If they were rehired after 1983 (with a greater than one year break in service), then they were required to start paying Social Security taxes. If they had at least five years of civilian service under CSRS, they then were placed in CSRS-Offset and given the option of ultimately switching to FERS.