Retirement Annuity Options

Most Federal employees are covered by one of three retirement systems, Civil Service Retirement System (CSRS), CSRS-Offset, and Federal Employees Retirement System (FERS). If you are entering Federal employment in either a Permanent or Term position for the first time, you will automatically be covered by FERS. FERS generally covers everyone hired since January 1, 1984. However, if you had previous Federal employment of 5 years or more under the CSRS or Social Security and were rehired, you may be rehired under CSRS or CSRS-Offset. The different retirement systems have fundamental differences in how benefits accumulate. Information about the FERS retirement system is below. For more details about FERS, CSRS and CSRS-Offset, visit OPM's Retirement Web Site .

Federal Retirement System (FERS)

FERS is a three-part retirement system consisting of:

• Civil service annuity
• Thrift Savings Plan (TSP)
• Social Security coverage

In general, as a FERS employee you contribute 7 percent of your pay toward your civil service annuity and Social Security taxes. In addition, you have the option of contributing to the TSP which is discussed in more detail below. You also pay for Medicare coverage. FERS employees are eligible for a Social Security benefit at age 62.

Thrift Savings Plan (TSP)

TSP is a valuable way to build up a nest egg for your retirement. It's the Federal government's version of the popular 401K retirement plan. Contributions are from pre-tax dollars and both investments and earnings are tax deferred until withdrawn. The retirement income you receive from TSP will depend on how much you contribute to the account and, if you are a FERS employee, how much the agency contributes. The TSP Program offers all eligible employees:

• Tax deferral on contributions
• Choice of 5 investment funds
• Loan program
• In-service withdrawals
• Participants who are at least age 59 1/2 may make a one-time withdrawal for any purpose
• Participants who are under age 59 1/2 can make withdrawals for financial hardship situations
• Withdrawal options if you leave the government (including transfer of your TSP account to a qualified retirement plan or IRA)
• Ability to transfer money from other eligible retirement savings plans into your TSP account
• Agency contributions up to an additional 5 percent (if you are a FERS employee meeting specific requirements)

Social Security

FERS employees are eligible for Social Security benefits. Social Security provides: monthly payments if you are retired and have reached at least age 62; monthly benefits if you become disabled; monthly benefits for your eligible survivors; and a lump sum benefit upon your death.

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