CSRS and FERS Overview
Retirement Systems
• Civil Service Retirement System
(CSRS) 1.4 Million annuitants*
<10% current employees*
• Federal Employees Retirement System
(FERS) 280 Thousand annuitants*
>90% current employees*
*2011 data
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Civil Service Retirement
System (CSRS)
• CSR Act effective August 1920
• A defined benefit plan
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Federal Employees Retirement
System (FERS)
• FERS effective 1/1/1987
• 3 different components:
• Basic Benefit Plan (+ Special Annuity Supplement)
• A defined benefit plan
• Social Security
• Thrift Savings Plan (up to 5% matching)
• A defined contribution plan
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How Much Do I Pay?
Employee Contribution Amounts
5
Civil Service Retirement
System (CSRS)
What CSRS employees pay
• Employee pays
7%
• Employer pays
7%
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Federal Employees Retirement
System (FERS)
What FERS employees pay
• Employee pays
0.8%
into Basic Benefit Plan
plus
6.2%
into Social Security
• Employer pays varying amounts
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When Will I Be Eligible to Retire?
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Types Of Retirements
• Regular/Optional
• Early Retirement
• Disability
• Deferred
• Phased Retirement
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Age and Service Requirements for
Regular Retirement
CSRS
FERS
Age
Service
Age
Service
55
30 years
MRA
30 years
60
20 years
60
20 years
62
5 years
62
5 years
MRA
10 years*
(*reduced benefits)
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The Minimum Retirement Age is
determined as follows:
If you were born
Your MRA is
Before 1948
In 1948
In 1949
In 1950
In 1951
In 1952
In 1953 to 1964
In 1965
In 1966
In 1967
In 1968
In 1969
In 1970 and after
55 years
55 years, 2 months
55 years, 4 months
55 years, 6 months
55 years, 8 months
55 years, 10 months
56 years
56 years, 2 months
56 years, 4 months
56 years, 6 months
56 years, 8 months
56 years, 10 months
57 years
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Crediting Service
________________________________________
Years of service
determine
ELIGIBILITY
to retire
&
HOW MUCH
you get
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Amount of Creditable Service
Federal Civilian Service is normally
credited from the beginning to ending
date of an appointment
Exception:
Cumulative LWOP exceeding 6 months in a
calendar year is not credited
unless the LWOP was due to an on-the-job
injury & wage loss compensation was paid
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Crediting Military Service
• Honorable, Active Duty
Service
• Military Retired Pay
Considerations
• Post 1956 Considerations
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Crediting Post-1956
Military Service
CSRS
FERS
Military deposit
equals 7% of
base pay plus
interest
Military deposit
equals 3% of
base pay plus
interest
15
Crediting Unused Sick Leave
CSRS and FERS
• Sick leave balance at retirement is added to
the length of service to calculate the amount
of an immediate annuity
• Sick leave is not creditable for
establishing retirement eligibility
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How Much Will I Get?
Annuity Computation
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Basic Annuity
• Annuity is based on a percentage of the
High 3 year average salary
• Percentage is determined by the amount of
creditable service and the appropriate
annuity formula
18
High-3 Average Salary
$
$ $
3 Consecutive Years
19
Basic Pay Includes:
• Regular Pay
• Night Differential
20
Basic Pay Does Not Include:
• Bonuses
• Overtime
• Allowances
21
General Formula
CSRS
1.5% x 5 years +
1.75%x 5 years +
2% x service over
10 years
FERS
1% or 1.1%* x
years of service
*1.1% if age 62
with 20 years
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General Formula
30 Years Total Service
CSRS
FERS
1.5% x 5 = 7.50%
1.75% x 5 = 8.75%
2.0% x 20 = 40.00%
1 % x 30 = 30%
56.25%
or
1.1% x 30 = 33%
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CSRS Calculation Example
Employee has 30 years of service and the
high-3 average salary is $56,000
1.5% of $56,000 ($840) x 5 years =
$ 4,200
1.75% of $56,000 ($980) x 5 years =
$ 4,900
2.0% of $56,000 ($1,120) x 20 years = $ 22,400
Basic Annuity (per year)
= $ 31,500
or
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FERS Calculation Example
Employee, age 62, has 24 years of service and
high-3 average salary of $56,000
1.1% of $56,000 or $616 x 24 = $14,784
or
1.1% x 24 = 26.4%
26.4% x $56,000 = $14,784
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FERS Special Annuity Supplement
• Substitutes for the Social Security part of the
total FERS benefit until age 62
• Approximates the Social Security benefit
earned under FERS
• Subject to earnings test
• No COLAs
• Ends at age 62
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FERS Special Annuity Supplement
To be eligible for the Supplement
• Employee must have 1 full calendar year of
deductions under FERS, and
• Must qualify for an immediate, non-disability
retirement (other than an MRA+10 retirement)
27
Calculation of
Special Annuity Supplement
• Get Social Security estimate of projected
age-62 benefit
• Multiply by years of FERS coverage
• Divide by 40
28
Sample Calculation of
Special Annuity Supplement
• Social Security age-62 projection = $18,000/year
• 30 years of FERS coverage
• $18,000 x 30 / 40 = $13,500
29
Reductions Applied to
Basic Annuity
CSRS
FERS
• Age
• Non-Deduction
Service
• Survivor Annuity
Election
• Refunded Service
• CSRS Offset
• If CSRS component,
Age
• MRA + 10 Age
• Survivor Annuity
Election
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CSRS Age Reduction
• Permanent Reduction
• Equals 2% for each full
year under age 55
• Applies to CSRS annuities
or CSRS component of a
FERS/CSRS annuity
36
FERS Age Reduction
• Applies if the employee retires on an
MRA + 10 retirement
• Employee begins receiving annuity
before age 62
• Permanent reduction equals 5% for each
full year under age 62
32
Reduction for Survivor
Annuity
Applies if an employee
• Elects a survivor annuity for a spouse
and/or former spouse
• Has a former spouse entitled to a survivor
annuity based on a valid court order,
and/or
• Elects to provide someone with an
insurable interest annuity
38
Survivor Annuity Reduction
CSRS
2 1/2 % x $3600
+
10 % x Amount of
base in excess of
$3600
Survivor receives
55% of the base
elected by retiree
FERS
Full survivor
annuity (50%)
10% of annuity
Partial survivor
annuity (25%)
5% of annuity
34
Insurable Interest
• A person who has a reasonable
expectancy of financial benefit in
the continued life of the
employee
• Reduction to provide a survivor
annuity to someone with an
insurable interest ranges
between 10 and 40%
35
Insurable Interest
• New regulations effective July 20, 2013
• Presumed Insurable Interest for Same Sex Domestic
Partners
• The modification of the pre-existing rule now
includes same-sex domestic partners in the class of
persons presumed as having an insurable interest in
the continued life of the employee/retiree
36
Maximum Annuity
CSRS
FERS
• 80% of the high-3
average salary
• Equivalent to 41years
and 11months service
• Limit may be exceeded
with sick leave credits
There is no
maximum
annuity under
FERS
37
Returning to Government Work
After Retirement
Generally, annuity continues and salary is
offset by amount of annuity
Exceptions (CSRS)
• Disability annuitants
Exceptions (FERS)
• Disability annuitants
38
Cost of Living Adjustments (COLAS)
CSRS
FERS
• Begins the first
December after
retirement
• Generally not applied
until the December
after age 62
• First COLA is
prorated
Exception
• Disability
39
Cost of Living Adjustments (COLAS)
CSRS
Equals the
percent change
in the Consumer
Price Index
(CPI)
FERS
If the percent change in the
CPI is:
• 0-2% the COLA equals the
CPI increase
• 2-3% the COLA equals 2%
• Over 3% the COLA equals
the change in the CPI
minus 1%
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Questions
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