Federal Erroneous Retirement Coverage Corrections Act

Erroneously in CSRS

My agency corrected my records from CSRS to CSRS Offset. Wouldn't I have been better off if I could have stayed in CSRS?

Actually, you're probably better off in CSRS Offset because you're earning benefits under both Social Security and CSRS.

Your combined benefits under Social Security and CSRS Offset will be at least the same as, if not more than, what you would have received under Social Security and CSRS if your record had not been corrected.

While working, you are earning retirement credits under the relatively generous CSRS formula. You also are adding to any Social Security benefits you have already earned, increasing your career earnings under Social Security and, as a result, your Social Security benefit.

When you retire, OPM will compute your CSRS Offset benefit under the same rules that apply to other CSRS retirees. When you become eligible for Social Security benefits, OPM will reduce your benefit. This reduction is based on the value of the Social Security benefit you earned during your CSRS Offset service. In other words, instead of getting one check from OPM for all of your Federal service, some of the payment will come from the Social Security Administration.

In addition, with more of your retirement income paid from Social Security, you have an increased tax advantage because part, or all, of your Social Security benefit will be exempt from Federal income tax. Only a small portion of a CSRS, or CSRS Offset, benefit is exempt from Federal income tax.

I worked for a number of years during which I should have been paying into Social Security, but I only paid into CSRS. Can I get any Social Security credit for that work? And, if so, how much will it cost me?

You will get Social Security credit for all that work, and it won't cost you anything. Your agency will send the Social Security Administration a record of your earnings during all the years you should have had Social Security coverage. All of the CSRS contributions you made during those years that are not needed to cover your retirement costs will be transferred to Social Security. This transfer will pay all the Social Security taxes you owe.

I have always had CSRS coverage. Now my agency tells me that when I returned to work in 1988, I should have had both CSRS and Social Security coverage, as a CSRS Offset employee. I'm 62 now and ready to retire. How will this error affect my benefits?

When you retire, OPM will compute your CSRS Offset benefit under the same rules that apply to other CSRS retirees. But, because you are now eligible for Social Security benefits, OPM will reduce your benefit. This reduction is based on the value of the Social Security benefit you earned during your CSRS Offset service. In other words, instead of getting one check from OPM for all of your Federal service, some of the payment will come from the Social Security Administration.

I separated and applied for a refund of my CSRS retirement deductions. I found out that I should have been in CSRS Offset instead of CSRS and didn't get my full refund. Can FERCCA help me?

FERCCA does not give you a choice about Social Security coverage. If you should have had Social Security coverage during your Federal employment, then you must have Social Security coverage in addition to your Federal retirement coverage. You have no choice. If your agency incorrectly put you in CSRS when it should have put you in CSRS Offset, it must correct your retirement coverage to CSRS Offset. You will not be able to get the full amount of the refund you were expecting.

Your previous agency should have sent the Social Security Administration a record of your earnings during all the years you should have had Social Security coverage. All of the CSRS contributions you made during those years that are not needed to cover your retirement costs were transferred to Social Security. Your refund was based on the retirement contributions that should have been withheld from your pay. It did not include amounts that were properly withheld, but erroneously considered retirement deductions rather than Social Security taxes.

I was in CSRS. That was a mistake. I belonged in FERS. My agency corrected my retirement coverage to FERS a while ago. Under FERCCA, I can choose between FERS and CSRS Offset. If I choose CSRS Offset, the deposit I owe for the time I worked before I came under a retirement plan will be a lot greater than what I owe under FERS. Can I get credit for that time by taking an actuarial reduction?

Yes, if you choose CSRS Offset coverage, you can get credit for that deposit service by taking an actuarial reduction. That's because the nature of the service changes from FERS to CSRS time when you elect CSRS Offset coverage. If you remain in FERS, you will have to pay a FERS deposit before you can get credit for the service time. You would not be eligible for the actuarial reduction.

Before you're asked to choose retirement plans, OPM will give you information about your benefits under both CSRS Offset and FERS. They will tell you how much you owe under both. They will also explain how payment of a deposit and the actuarial reduction will affect your benefit.

My qualifying retirement coverage error started when I should have been placed in FERS automatically on 1/1/87, but my agency erroneously put me in CSRS because I had some past service. If I elect FERS, will I get a CSRS component in my FERS annuity for the service before the error?

No. Employees who should have been automatically placed in FERS do not have a CSRS component in their future FERS annuity. All service must be treated as FERS service in this circumstance.

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