FERS Retirement - Federal Employee Retirement System
Alford Benefits is an agency working in partnership with The Benefit Coordinators, an organization of licensed and dedicated federal employee benefits professionals and a U.S. Government Approved Vendor. If you or your organization are interested in learning more via FREE individual or group consultations/workshops, please contact us.
FERS Retirement – Federal Employee Retirement System
FERS Retirement (The Federal Employee Retirement System) has many parts. The pension plan for Federal employees is a defined benefit plan which consists of two systems with sub systems. The two main systems of FERS Retirement are the Civil Service Retirement System (CSRS) and the Federal Employee Retirement System (FERS). Within these two systems are sub groups with different retirement age requirements as well as employee contribution percentages. Sub groups consist of Special Groups such as Law Enforcement, Firefighters, Air Traffic Controllers, Capitol Police, Supreme Court Police, Nuclear Materials Couriers, members of Congress or Congressional Employees.
Civil Service Retirement Act (CSRS)
The Civil Service Retirement Act became effective on August 1, 1920 and established a federal retirement system for Federal employees. The Civil Service Retirement System (CSRS) is a defined benefit, contributory retirement system. Employees share in the expense to help fund their retirement annuities. CSRS covered employees contribute 7, 7 1/2 or 8 percent of pay to CSRS and while they generally pay no Social Security retirement or survivor and disability (OASDI) tax, they must pay the Medicare tax (currently 1.45 percent of pay). The employing agency matches the employee’s CSRS contributions.
It was replaced by FERS Retirement (the Federal Employees Retirement System) for Federal employees who first entered covered service on and after January 1, 1987.
FERS Retirement – Federal Employee Retirement System
FERS Retirement or The Federal Employees Retirement System became effective January 1, 1987. All Federal civilian employees hired after this date are covered under FERS. FERS retirement eligibility is based on years of service and your attained age.
The FERS consists of three components for your retirement:
- FERS Retirement Annuity
- Thrift Savings Plan (Government 401K) Thrift Savings Plan (TSP) that is automatically set up for you when first hired. Agencies deposit 1% of the basic pay each payday into your account. Your agency will match up to 5% of your contributions and contributions are tax-deferred.
- Social Security – The earliest you can start receiving benefits is age 62 (A reduced benefit)
Three milestones for attaining an immediate unreduced retirement annuity:
- Minimum Retirement Age (MRA 55 and up) with at least 30 years of service
- At 60 years of age with at least 20 years of service
- At 62 with at least 5 years of service
- NEmployees in each system contribute different amounts towards retirement.
- NBenefits have changed over the years and are still in the discussion for more decreases in benefits and raises in costs.
- NNot understanding what you have and when changes might occur could cost you thousands in retirement.
- NMost CSRS employees have already retired.
- NCSRS was the retirement pension before FERS.
- NGenerally, CSRS employees have not contributed to Social Security.
- NEarly retirement might not be in your best interest and you might be leaving money on the table.
- NYou could offset your FERS Special Supplement to zero if you earn too much in retirement.
- NYou could be paying more for your retirement and receiving less with current proposed changes before congress, stay informed.
Popular Questions
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How many years do you have to work for the federal government to get a pension?
The simple answer for an FERS employee is 30 years of federal servcie.
How is federal retirement calculated?
The simple answer is a combination of the “High-3” average, years of services, and age at retirement.
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What are the retirement benefits for federal employees?
Depending on the retirement system type of employee a pension or a modified pension, a Thrift Savings Plan, and Social Security would be available.
How do I contact OPM after retirement?
A federal retiree can contact OPM by email, retire@opm.gov or call (888) 767-6738.
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