Retirement Plans

Federal Employees Retirement System (FERS)Almost all new employees who were hired after December 31, 1983, are automatically covered by the Federal Employees Retirement System (FERS).

FERS created a new retirement program that coordinates Federal retirement benefits with Social Security coverage.  When you retire, you will receive an annuity from FERS based on your salary and length of service with the Federal government; and at age 62, you become eligible for Social Security benefits.  In addition, FERS retirees will receive distributions from the Thrift Savings Plan, a tax-deferred savings plan similar to 401(k) plan.  Thus, FERS retirees will be drawing retirement benefits from three separate sources.

• Social Security Benefits
  
  
• Basic Benefits Plan
  
  
• Thrift Savings Plan

Employees covered under FERS pay Social Security taxes and FERS basic benefit deductions.  They receive an automatic 1 percent government contribution to their Thrift Savings Plan account, can contribute up to the IRS limit for the current year, and can receive up to 5 percent in matching government contributions.  The three FERS components work together to give you a strong financial foundation for your retirement.  More information about FERS is available at the Office of Personnel Management’s Web site.

Civil Service Retirement System

Many Federal employees are covered under the Civil Service Retirement System (CSRS).  This system was enacted in 1920.  Employees hired before December 31, 1983, who did not choose to transfer into the Federal Employees Retirement System (FERS) when FERS was established, are covered by CSRS.  The amount of the basic annuity payable upon your retirement under CSRS is directly related to an employees’ length of service and their highest 3 years' average salary.

The CSRS has traditionally been a single benefit retirement plan. Employees have one payroll deduction to the plan and, after retirement, receive a check from CSRS each month for the rest of their lives.  CSRS employees may also contribute to the Thrift Savings Plan in order to receive additional retirement income. They can contribute up to the IRS limit for the current year.