What is FERCCA?

FERCCA is the Federal Erroneous Retirement Coverage Corrections Act. It is a law that addresses the long-term harm to retirement planning created when employees are put in the wrong retirement plan.

How can FERCCA help me?

• You may have an opportunity to choose another retirement plan;
• You may be reimbursed for certain out-of-pocket expenses you paid as a result of a coverage error;
• You may benefit from certain changes in the rules about how some of your Government service counts toward retirement; and
• You may be able to make-up contributions to the Thrift Savings Plan and get lost earnings on those contributions as well.

What is CSRS?

CSRS stands for the Civil Service Retirement System. CSRS was created in 1920 and was the only retirement plan for most Federal civilian employees until 1984. CSRS is a defined benefit retirement plan that provides retirement, disability, and survivor benefits. Agencies deduct a set percentage of your basic pay (7% for most employees) and contribute a matching amount to CSRS.

The basic annuity is computed based on your length of service and the highest average basic pay you earned during any 3 consecutive years of service (know as the "high-3" average pay). For most employees, the CSRS basic benefit is computed by adding:

• 1% of your high-3 average pay times service up to 5 years, plus
• 1% of your high-3 average pay times years of service over 5 and up to 10, plus
• 2% of your high-3 average pay times years of service over 20.

The CSRS benefit may be reduced to provide survivor protection and in some cases for nondisability retirement before age 55.

CSRS employees are allowed to participate in the Thrift Savings Plan and currently may contribute up to 6% of basic pay, without a Government contribution.

What is FERS?

FERS stands for the Federal Employees Retirement System. FERS became effective in 1987 and most new Federal civilian employees hired after 1983 are automatically covered by FERS. FERS is a three-tiered retirement plan. The three components are the:

• FERS Basic Benefit
• Social Security Benefit
• Thrift Savings Plan Benefit

Most FERS employees pay 0.8% of basic pay for FERS basic benefits. The agency contributes 10.7% or more to FERS. The FERS basic benefit provides retirement, disability, and survivor benefits and may be reduced for early retirement or to provide survivor protection.

The FERS basic benefit is computed based on your length of service and the highest average basic pay you earned during any 3 consecutive years of service (know as the "high-3" average pay). Generally, the FERS basic benefit is 1% of your high-3 average pay times your years of creditable service.

What is CSRS Offset?

CSRS Offset is the Civil Service Retirement System with Social Security Offset. It is the same as CSRS, except that is coordinated with Social Security.

CSRS Offset was created in 1987 and generally applies to employees who had a break in Federal service after 1983 that lasted longer than 1 year and had at least 5 years of civilian service as of January 1, 1987. It also applies to employees who were hired into a civilian job before 1984, but did not acquire retirement coverage until after 1984 and had at least 5 years of service as of January 1, 1987.

CSRS Offset employees are covered by both CSRS and Social Security. You earn retirement credit under CSRS, while also earning credits under Social Security. When you retire from the Government, your retirement benefit is computed in the same way that CSRS benefits are computed. However, when you become eligible for Social Security benefits (usually at age 62), your CSRS retirement benefit is reduced, or offset, by the value of the Social Security benefit you earned while working for the Government.

The amount CSRS Offset employees pay for retirement the same amount that CSRS employees pay, however it is reduced, or offset, by Social Security taxes (6.2 % of pay). Agencies contribute a set amount (7% for most employees) to CSRS Offset.

Just like CSRS employees, CSRS Offset employees are also are allowed to participate in the Thrift Savings Plan and currently may contribute up to 6% of basic pay, without a Government contribution.

What is Social Security-Only?

Social Security-Only means coverage under Social Security without also being covered under either CSRS or FERS. You would have Social Security-Only coverage if you were hired under an appointment that is excluded from CSRS or FERS.

Usually employees serving under temporary appointments (limited to 1 year or less), intermittent employees, and other appointments that would not be expected to last at least 5 years (such as term and excepted indefinite appointments) are excluded from CSRS.

Employees serving under temporary (limited to 1 year or less) appointments and intermittent employees are generally excluded from FERS.

Are there many employees in the wrong retirement plan?

We believe that the number of employees in the wrong retirement plan is very small. Agencies have discovered and corrected many retirement coverage errors. However, we are certain some employees still are in the wrong retirement plan.

If you have not worked for the Federal government continuously since 1983, or you have had changes in appointment types and retirement plans, then you may want to ask your agency to review your retirement coverage to ensure that it is correct.

I received a Letter of Eligibility stating that there was an error in my retirement coverage. The Letter says something about being placed in "transitional retirement coverage" during 1984 to 1986. What does the term mean?

"Transitional retirement coverage" or CSRS Interim is a version of CSRS established pending creation of a new retirement system for employees first hired after December 31, 1983, and certain rehires. Employees covered by CSRS Interim provisions paid OASDI taxes and a reduced CSRS contribution. When FERS became effective on January 1, 1987, employees with CSRS Interim coverage acquired either FERS or CSRS Offset coverage.

I am registered in the FERCCA Database and I am waiting to hear if I am eligible for relief under FERCCA. Does registration in the Database exclude me from being eligible for the Voluntary Separation Incentive Program (VSIP)?

No. Whether you are retiring (with a corrected or uncorrected retirement coverage error) or leaving government service, FERCCA has no bearing on your eligibility under the VSIP.

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