Planning for Retirement
Civil Service Retirement System
(CSRS/CSRS Offset)
CSRS Background

CSRS 1920
 Social Security Amendments Act 1983 created FERS,
effective January 1, 1987
 CSRS Offset: 5 yrs or more, 365+ break in service,
returning to Federal government after FERS created

3-tiered system
 Six FERS Options (+SP)
 Defined Benefit
Creditable service
X High-3 salary
X Applicable formula
Pinnacle Personnel Services, LLC (Mar 10)
Civil Service Retirement
and
Disability Fund
Social Security
or
FERS Supplement
TSP
Creditable Service
Civilian Service
I.
•
•
•
Covered Service
Non-Deduction Service
Redeposit Service
II.
Military service
III.
Sick Leave
Pinnacle Personnel Services, LLC (Mar 10)
Covered Service

Federal civilian service that can be counted toward
qualification of eligibility for an annuity






Contributions were withheld from wages
Break in service 3 days or less
Up to 6 months (in a calendar year) Leave Without Pay
Time on Worker’s Compensation (and agency rolls)
Intermittent schedule
Part-time schedule
 Full time for eligibility; may be prorated for money
Actual Hours Worked 4/7/86 - Retirement
Total Full-Time Hours Possible
Pinnacle Personnel Services, LLC (Mar 10)
Non-Deduction Service

Federal civilian service when retirement contributions
were not withheld from wages.
 Service performed prior to 10/01/82
 Deposit not required for time to be creditable
 If deposit is not made, 10% of amount owed (with interest)
subtracted
 Service performed after 09/30/82
 Deposit not required for time to be creditable
 If deposit is not made, no credit in computation
Pinnacle Personnel Services, LLC (Mar 10)
Redeposit Service

Federal civilian service when retirement contributions
were refunded concurrent with a break in service.
Prior to NDAA, 28 Oct 09,
date was 10/01/90
 Service performed prior to 03/01/91
 Creditable for eligibility and computation even if
redeposit not paid but benefit will be actuarially reduced
 Service performed after 03/01/91
 Redeposit not required for time to be creditable
 If redeposit is not made, no credit in computation
Pinnacle Personnel Services, LLC (Mar 10)
NAF Service
NDAA 2002:
Permits employees who move between DoD or Coast
Guard NAF and any APF after 28 Dec 01 without a
break in service of more than 1 year, to remain in
civil service or NAF retirement even if not vested in
that plan.
CSRS or FERS employees may use prior NAF
service to qualify for an immediate annuity but credit
will NOT result in a higher annuity benefit,.
Pinnacle Personnel Services, LLC (Mar 10)
Multiple SCDs Possible…
Leave
RIF
Retirement
6C (Special Provisions)
Pinnacle Personnel Services, LLC (Mar 10)
800-525-0102
http://ask.afpc.randolph.af.
mil/CivPSD/
Military Service

Military service counts if
 Performed prior to separation upon which title to an
annuity is based
 Is not included in the computation of retired military pay

Military service deposits
 If employed prior to 10/01/82, post-56 military service counts
with no deposit but possible reduction at age 62
 If employed after 09/30/82, requires a deposit for any purpose
 7% base pay plus variable interest
Pinnacle Personnel Services, LLC (Mar 10)
Military Deposit Example




Hired prior to 10/01/82
Retire with 32 years government service at age 55
4 years military service
High-3 average salary = $55,000

Annuity at retirement = 60¼% of high-3 ($33,137/yr)
 If deposit was not made, and eligible for SSA at age
62, annuity reduced by 8% or $4,400/year
($366/month)
Pinnacle Personnel Services, LLC (Mar 10)
Military Deposit Process
RI 20-97, Estimated Earnings During Military Service,
completed and mailed to military payroll office with
copy of DD 214.
 www.opm.gov/forms/pdf_fill/RI20-97.pdf
Call BEST, 800-525-0102, and ask for military deposit
paperwork.
 BEST will prepare SF 2803, Application to Make Service
Credit Payment, and OPM Form 1514, Military Deposit
Worksheet.
 Mailed or faxed to you 4-8 weeks after request.
Pinnacle Personnel Services, LLC (Mar 10)
Military Deposit Process
After you review forms, sign/date, mail everything to
DFAS
 BEST will provide the address.
 DFAS will compute the actual deposit amount and contact
you to arrange for payment.
Pinnacle Personnel Services, LLC (Mar 10)
Days
2087 Hour Sick Leave Chart - page 18
1 Day
1 Mth
2 Mths
3 Mths
4 Mths
5 Mths
6 Mths
7 Mths
8 Mths
9 Mths
10 Mths
11 Mths
0
174
348
522
696
870
1044
1217
1391
1565
1739
1913
1
6
180
354
528
701
875
1049
1223
1397
1571
1745
1919
2
12
186
359
533
707
881
1055
1229
1403
1577
1751
1925
3
17
191
365
539
713
887
1061
1235
1409
1583
1757
1930
4
23
197
371
545
719
893
1067
1241
1415
1588
1762
1936
5
29
203
377
551
725
899
1072
1246
1420
1594
1768
1942
6
35
209
383
557
730
904
1078
1252
1426
1600
1774
1948
7
41
214
388
562
736
910
1084
1258
1432
1606
1780
1954
8
46
220
394
568
742
916
1090
1264
1438
1612
1786
1959
0
9
52
226
400
574
748
922
1096
1270
1444
1617
1791
1965
10
58
232
406
580
754
928
1101
1275
1449
1623
1797
1971
11
64
238
412
586
759
933
1107
1281
1455
1629
1803
1977
12
70
243
417
591
765
939
1113
1287
1461
1635
1809
1983
13
75
249
423
597
771
945
1119
1293
1467
1641
1815
1988
14
81
255
429
603
777
951
1125
1299
1472
1646
1820
1994
15
87
261
435
609
783
957
1130
1304
1478
1652
1826
2000
16
93
267
441
615
788
962
1136
1310
1484
1658
1832
2006
17
99
272
446
620
794
968
1142
1316
1490
1664
1838
2012
18
104
278
452
626
800
974
1148
1322
1496
1670
1844
2017
19
110
284
458
632
806
980
1154
1328
1501
1675
1849
2023
20
116
290
464
638
812
986
1159
1333
1507
1681
1855
2029
21
122
296
470
643
817
991
1165
1339
1513
1687
1861
2035
22
128
301
475
649
823
997
1171
1345
1519
1693
1867
2041
23
133
307
481
655
829
1003
1177
1351
1525
1699
1873
2046
24
139
313
487
661
835
1009
1183
1357
1530
1704
1878
2052
25
146
319
493
667
841
1015
1188
1362
1536
1710
1884
2058
26
151
325
499
672
846
1020
1194
1368
1542
1716
1890
2064
27
157
330
504
678
852
1026
1200
1374
1548
1722
1896
2070
28
162
336
510
684
858
1032
1206
1380
1554
1728
1901
2075
29
168
342
516
690
864
1038
1212
1386
1559
1733
1907
2081
Pinnacle Personnel Services, LLC (Mar 10)
Full Years and Full Months





Retirement Date:
Retirement SCD:
Creditable Civ:
Creditable Mil:
Add unused SL:
2011 - 01 – 03
1977 - 09 - 01
33 years 4 months 3 days
4 years 2 months 9 days
897 hrs = 5 months 5 days
Retirement computed on 37 years 11 months
(dropping 17 days)
Pinnacle Personnel Services, LLC (Mar 10)
Full Years, Full Months





Retirement Date:
Retirement SCD:
Creditable Civ:
Creditable Mil:
Add unused SL:
2011 - 12 - 31
1977 - 09 - 15
34 years 3 months 16 days
4 years 2 months 9 days
897 hrs = 5 months 5 days
Retirement computed on 38 years 11 months
If this person used 5 days of sick leave,
retirement based on 38 yrs, 10 months...
They would have lost 23 days!!!
Pinnacle Personnel Services, LLC (Mar 10)
1 Option: Voluntary Retirement

Age and service requirement
 Age 55 with 30 years of service
 Age 60 with 20 years of service
 Age 62 with 5 years of service
 Minimum 5 years federal civilian service
 Retire from a position covered by retirement
contributions and meet one out of two rule
 This is an unreduced retirement
Pinnacle Personnel Services, LLC (Mar 10)
Options 2 & 3:
Early Voluntary & Discontinued Service

Age and service requirement
 Age 50 with 20 years of service or
 Any age with 25 years of service


Minimum 5 years federal civilian service
Retire from a position covered by retirement
contributions and meet one out of two rule
 Separate by close of early out period
 No refusal of valid offer
 Age penalty
 2% for each year (1/6th of 1%/month) under 55
Pinnacle Personnel Services, LLC (Mar 10)
Option 4: Deferred Retirement

Not eligible for immediate annuity within one month
of separation
 Minimum 5 years federal civilian service
 No refund of retirement deductions
 Not eligible to collect under CSRS until age 62
 No sick leave, FEGLI, or FEHB
Pinnacle Personnel Services, LLC (Mar 10)
Option 5: Disability Retirement






Covered by and disabled while subject to retirement
coverage
5 years federal civilian service, no age requirement
Documented disability criteria
Periodic medical reviews
Medically recovered
Restored to earning capacity
Pinnacle Personnel Services, LLC (Mar 10)
High-3 Average Salary Includes

CONUS & Hawaii/Alaska (28Oct09) locality pay

Night differential pay for wage system employees

Environmental differential

Runumeration pay and tropical differential pay for
citizen employees of any agency in Panama

Premium pay for firefighter standby time

Irregular, unscheduled overtime for LEOs

Special pay established for recruiting and retention
purposes
Pinnacle Personnel Services, LLC (Mar 10)
High-3 Average Salary Excludes







Foreign post differential/allowance pay
Bonuses, allowances, overtime, holiday, & military pay
Lump-sum payments covering accrued and
accumulated leave
Retroactive pay granted pursuant to a wage survey
Payment for credit hours
Premium pay for certain air traffic controllers
Supplemental payments from OWCP
Pinnacle Personnel Services, LLC (Mar 10)
High-3 Average Salary
Largest annual rate average over 3 continuous years of service.
Retirement date 1/3/2011
01/01/2008 to 01/08/2008
$44,650.00
x 0.022222
= $
01/09/2008 to 03/26/2008
$45,900.00
x 0.216667
= $ 9,945.02
03/27/2008 to 01/07/2009
$47,250.00
x 0.780556
= $ 36,881.27
01/08/2009 to 01/06/2010
$51,300.00
x 0.997222
= $ 51,157.49
01/07/2010 to 01/02/2011
$53,717.00
x 0.983333
= $ 52,821.70
Total salary over three years
= $151,806.69
Divide $151,806.69 by 3 = $50,602.00
Pinnacle Personnel Services, LLC (Mar 10)
992.21
CSRS General Annuity Formula

1.50% x high-3 x 1st 5 years/service
 1.75% x high-3 x 2nd 5 years/service
 2.00% x high-3 x years/months over 10 (including
unused sick leave)

Maximum annuity payable cannot exceed 80% of high3 average salary = 41 years/11 months of service (sick
leave can make it more than 80%)
Pinnacle Personnel Services, LLC (Mar 10)
CSRS Shorthand Formula

Years of service multiplied by 2
 Subtract 4 and add 0.25%
Example:
 30 years x 2 = 60 – 4 =56 + ¼% = 56¼%
 Multiply percentage by high-3 average salary to
determine annual annuity
Pinnacle Personnel Services, LLC (Mar 10)
Sample Computations


High-3 average salary = $50,602
General formula:
 1.5% x $50,602 x 5 = 3,795.15
 1.75% x $50,602 x 5 = 4,427.68
 2%
x $50,602 x 20 = 20,240.80
$28,463.63 per year
 Short-hand formula
 $50,602 x 56.25% =
$28,463.63 per year
Pinnacle Personnel Services, LLC (Mar 10)
CSRS Disability Computation

Higher of either the general formula or guaranteed
minimum.
 The guaranteed minimum is the lesser of:
 40% of the high-3 average salary (this provides an
individual with an annuity as if they had worked 21 years
11 months)
 Amount obtained under general formula after increasing
the actual years, months and days of service by the total
years, months, and days remaining from the commencing
date of the employee’s annuity through the date they
become age 60
Pinnacle Personnel Services, LLC (Mar 10)
CSRS Offset

Full CSRS annuity until age 62. Then a reduction of
the lesser of:
1. The difference between Social Security monthly benefit
including and excluding CSRS Offset service; or
2. Total Social Security monthly benefit multiplied by a
fraction where the numerator is the employee's total
CSRS offset service rounded to the nearest whole
number of years and the denominator is 40.
Social Security X
Benefit
Pinnacle Personnel Services, LLC (Mar 10)
Total Years of Offset Service
40
Offset Example – page 26
Computation method #1
 Social Security monthly benefit with offset service: $900
 Social Security monthly benefit without offset service : $300
 Difference. ................. $600
Computation method #2
 Social Security amount with offset service =
$900 X 20 years* = $18,000 divided by 40 = $450
*Nearest whole year to 19 years 8 months.
The lesser of these two computations is
$450 so that would be the CSRS Offset
reduction to retirement at age 62
Pinnacle Personnel Services, LLC (Mar 10)
Contributions to TSP
 Employee contributions
 No percentage limit
 IRS employee limit for 2010: $16,500
 Catch-up contributions: $5,500
 FERS Agency Automatic Contributions (1%) and
 Matching Contributions
 Limit for all contributions: $49,000
Pinnacle Personnel Services, LLC (Mar 10)
TSP Options After Leaving

Leave Money in TSP (if balance of $200 or more)

Cash Out
(automatic if balance less than $200)
 Full or partial
(must remove at least $1,000)

Transfer to an IRA/other tax deferred account
 As of Jan 08 – transfer to Roth

Monthly Payments
 By Dollar Amount
 By IRS Life Expectancy Table
Pinnacle Personnel Services, LLC (Mar 10)
TSP Options After Leaving

Purchase annuity ($3,500 or more)
 Single Life
 Joint Life w/spouse
 Joint Life w/other survivor (insurable interest)
Jan 08, creation of stretch IRAs for survivors
Jun 09, spouses of deceased employees/retirees
can elect to maintain TSP account.
Pinnacle Personnel Services, LLC (Mar 10)
Social Security
Must be at least 62 and have a minimum of 40
quarters to qualify
 $1,120 = 1 / Maximum of 4 per year
2010 Earnings Limit is $14,160
Includes salary and/or wages from a job
Net profit from a business (self-employment)
Pinnacle Personnel Services, LLC (Mar 10)
Computing Social Security
 Based on earnings averaged over worker’s lifetime
 Indexed to “today’s” dollars
 Calculate average monthly indexed earnings during
highest 35 years
 Apply formula to arrive at Primary Insurance Amount
(PIA) or basic benefit
 WEP &/or GPO will
2010 Formula:
reduce your benefit if
you do not have a full
30
$761 x 90%
Next $4,586 x 32%
years of substantial
Remainder x 15%
earnings
Rounded to next lower multiple of $10
Pinnacle Personnel Services, LLC (Mar 10)
Yr of Birth
Full Age
Age 62
Reduction
Months
Monthly
Reduction
Total
Reduction
1938
65 Y 2 M
38
.548
20.83%
1939
65 Y 4 M
40
.541
21.67%
1940
65 Y 6 M
42
.535
22.50%
1941
65 Y 8 M
44
.530
23.33%
1942
65 Y 10 M
46
.535
24.17%
1943-1954
66 Years
48
.520
25.00%
1955
66 Y 2 M
50
.516
25.84%
1956
66 Y 4 M
52
.512
26.66%
1957
66 Y 6 M
54
.509
27.50%
1958
66 Y 8 M
56
.505
28.33%
1959
66 Y 10 M
58
.502
29.17%
67 Years
60
.500
30.00%
1960 or later
Pinnacle Personnel Services, LLC (Mar 10)
Pinnacle Personnel Services, LLC (Mar 10)