Employee Benefits

Federal Retirement Programs and the Thrift Savings Plan

Federal employees are covered by one of two retirement programs:  the Civil Service Retirement System (CSRS) or the Federal Employees Retirement System (FERS).  The CSRS system is essentially for those who have been working for the government continuously since 1983. A variant, called CSRS-Offset, generally applies to those who had at least five years of CSRS service, left the government, and then returned. While CSRS employees aren't covered by Social Security, CSRS-Offset employees are. The “offset” is a reduction in the civil service annuity when Social Security benefits begin.

Employees pay seven percent of their salary to participate in CSRS. In return, they receive a defined benefit under a several-step formula based on their "high-three" -- their highest three years of consecutive earnings. The benefit adds up to 16 percent of high-three at 10 years of service, 36 percent at 20 years and 56 percent at 30 years.

Generally, the FERS system applies to those hired since 1984. It consists of three components. The first part is Social Security, in which coverage is provided under the same terms as private sector employees. That is, both federal and private sector employment count toward Social Security credit and the benefits accumulate at the same rate.

The second component is civil service annuity, which is based on the worker's high-three salary figure. This benefit is 10 percent of a high-three at ten years of service, 20 percent at 20 years and so on. FERS employees also pay seven percent of salary for these benefits. Like private sector employees, 6.2 percent of salary is contributed to the Social Security trust fund, while the remainder goes into the civil service retirement trust fund.

The third component of the FERS system is the Thrift Savings Plan, which allows FERS-covered employees to save up to 14 percent of their biweekly salaries, pre-tax. The government contributes up to an additional five percent of salary for FERS investors. Although the contribution provisions are not as good for them, CSRS employees also may participate in the TSP.

Under both systems, employees pay an additional 1.45 percent of salary toward Medicare.  Follow the links below for additional information.

• Federal Retirement Programs (OPM) www.opm.gov/retire/   
• CSRS  www.opm.gov/retire/html/library/csrs.asp   
• FERS  www.opm.gov/retire/html/library/fers.asp   
• Thrift Savings Plan (TSP) www.tsp.gov   
• Social Security  www.socialsecurity.gov   

For additional information, please contact Lisa Kleiner, Benefits and Worklife Advisor, at (202) 314-6462.