1. CSRS and FERS Overview pending legislative changes

2. Retirement Systems Civil Service Retirement System (CSRS)
Federal Employees Retirement System (FERS)

3. Employee Contribution Amounts
How Much Do I Pay?
CSRS-The Civil Service Retirement Act, which became effective on August 1, 1920, established a retirement system for certain Federal employees.  The Civil Service Retirement System (CSRS) is a defined benefit, contributory retirement system.  Employees share in the expense of the annuities to which they become entitled. CSRS covered employees contribute 7, 7 1/2 or 8 percent of pay to CSRS and, while they generally pay no Social Security retirement, 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.
CSRS employees may increase their earned annuity by contributing up to 10 percent of the basic pay for their creditable service to a voluntary contribution account.  See Chap 31 & SF2804.
Employees may also contribute a portion of pay to the Thrift Savings Plan (TSP).  There is no Government contribution, but the employee contributions are tax-deferred.  For more information about TSP, see the TSP website.
Employee Contribution Amounts

4. Civil Service Retirement System (CSRS)
CSR Act effective August 1920
A Defined Benefit Plan
CSRS-The Civil Service Retirement Act, which became effective on August 1, 1920, established a retirement system for certain Federal employees.  The Civil Service Retirement System (CSRS) is a defined benefit, contributory retirement system.  Employees share in the expense of the annuities to which they become entitled. CSRS covered employees contribute 7, 7 1/2 or 8 percent of pay to CSRS and, while they generally pay no Social Security retirement, 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.
CSRS employees may increase their earned annuity by contributing up to 10 percent of the basic pay for their creditable service to a voluntary contribution account.  See Chap 31 & SF2804.
Employees may also contribute a portion of pay to the Thrift Savings Plan (TSP).  There is no Government contribution, but the employee contributions are tax-deferred.  For more information about TSP, see the TSP website.

5. Civil Service Retirement System (CSRS)
What CSRS employees pay
Most employees pay 7% 12% & employing agency pays 7% 2%
House continuing resolution passed 3/29/12
CSRS-The Civil Service Retirement Act, which became effective on August 1, 1920, established a retirement system for certain Federal employees.  The Civil Service Retirement System (CSRS) is a defined benefit, contributory retirement system.  Employees share in the expense of the annuities to which they become entitled. CSRS covered employees contribute 7, 7 1/2 or 8 percent of pay to CSRS and, while they generally pay no Social Security retirement, 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.
CSRS employees may increase their earned annuity by contributing up to 10 percent of the basic pay for their creditable service to a voluntary contribution account.  See Chap 31 & SF2804.
Employees may also contribute a portion of pay to the Thrift Savings Plan (TSP).  There is no Government contribution, but the employee contributions are tax-deferred.  For more information about TSP, see the TSP website.

6. Federal Employees Retirement System (FERS)
What FERS employees pay
Most employees pay 0.8% into Basic Benefit Plan
3.1% hired > 1/1/13* FERS-RAE
4.4% hired > 1/1/14** FERS-FRAE
plus 6.2% into Social Security
*Middle Class Tax Relief and Job Creation Act of Passed into law
** Bipartisan Budget Act of Passed into law
FERS-Congress created the Federal Employees Retirement System (FERS) in 1986, and it became effective on January 1, 1987.  Since that time, new Federal civilian employees who have retirement coverage are covered by FERS.
FERS is a retirement plan that provides benefits from three different sources:   a Basic Benefit Plan, Social Security, and the Thrift Savings Plan (TSP).   Two of the three parts of FERS (Social Security and the TSP) can go with you to your next job if you leave the Federal Government before retirement.   The Basic Benefit and Social Security parts of FERS require you to pay your share each pay period.  Your agency withholds the cost of the Basic Benefit and Social Security from your pay as payroll deductions.  Your agency pays its part too.  Then, after you retire, you receive annuity payments each month for the rest of your life.
The TSP part of FERS is an account that your agency automatically sets up for you.  Each pay period your agency deposits into your account amount equal to 1% of the basic pay you earn for the pay period.  You can also make your own contributions to your TSP account and your agency will also make a matching contribution.  These contributions are tax-deferred.  The Thrift Savings Plan is administered by the Federal Retirement Thrift Investment Board.

7. Federal Employees Retirement System (FERS)
FERS effective 1/1/1987
3 different components:
Basic Benefit Plan (+ Special Annuity Supplement)
Social Security
Thrift Savings Plan (up to 5% matching)
House continuing resolution passed 3/29/12
HR 3813
Obama Administration FY 2013 budget
FERS-Congress created the Federal Employees Retirement System (FERS) in 1986, and it became effective on January 1, 1987.  Since that time, new Federal civilian employees who have retirement coverage are covered by FERS.
FERS is a retirement plan that provides benefits from three different sources:   a Basic Benefit Plan, Social Security, and the Thrift Savings Plan (TSP).   Two of the three parts of FERS (Social Security and the TSP) can go with you to your next job if you leave the Federal Government before retirement.   The Basic Benefit and Social Security parts of FERS require you to pay your share each pay period.  Your agency withholds the cost of the Basic Benefit and Social Security from your pay as payroll deductions.  Your agency pays its part too.  Then, after you retire, you receive annuity payments each month for the rest of your life.
The TSP part of FERS is an account that your agency automatically sets up for you.  Each pay period your agency deposits into your account amount equal to 1% of the basic pay you earn for the pay period.  You can also make your own contributions to your TSP account and your agency will also make a matching contribution.  These contributions are tax-deferred.  The Thrift Savings Plan is administered by the Federal Retirement Thrift Investment Board.

8. Federal Employees Retirement System (FERS)
FERS effective 1/1/1987
3 different components:
Basic Benefit Plan (+ Special Annuity Supplement)
Social Security (Reduced via Chained CPI)
Thrift Savings Plan (up to 5% matching)
Obama Administration 2012 and 2013 budgets
FERS-Congress created the Federal Employees Retirement System (FERS) in 1986, and it became effective on January 1, 1987.  Since that time, new Federal civilian employees who have retirement coverage are covered by FERS.
FERS is a retirement plan that provides benefits from three different sources:   a Basic Benefit Plan, Social Security, and the Thrift Savings Plan (TSP).   Two of the three parts of FERS (Social Security and the TSP) can go with you to your next job if you leave the Federal Government before retirement.   The Basic Benefit and Social Security parts of FERS require you to pay your share each pay period.  Your agency withholds the cost of the Basic Benefit and Social Security from your pay as payroll deductions.  Your agency pays its part too.  Then, after you retire, you receive annuity payments each month for the rest of your life.
The TSP part of FERS is an account that your agency automatically sets up for you.  Each pay period your agency deposits into your account amount equal to 1% of the basic pay you earn for the pay period.  You can also make your own contributions to your TSP account and your agency will also make a matching contribution.  These contributions are tax-deferred.  The Thrift Savings Plan is administered by the Federal Retirement Thrift Investment Board.

9. Federal Employees Retirement System (FERS)
FERS effective 1/1/1987
3 different components:
Basic Benefit Plan (+ Special Annuity Supplement)
Social Security
Thrift Savings Plan (up to 5% matching)
No matching employer contributions
S 1486 – Would allow USPS to bargain with unions to eliminate USPS matching TSP contributions
FERS-Congress created the Federal Employees Retirement System (FERS) in 1986, and it became effective on January 1, 1987.  Since that time, new Federal civilian employees who have retirement coverage are covered by FERS.
FERS is a retirement plan that provides benefits from three different sources:   a Basic Benefit Plan, Social Security, and the Thrift Savings Plan (TSP).   Two of the three parts of FERS (Social Security and the TSP) can go with you to your next job if you leave the Federal Government before retirement.   The Basic Benefit and Social Security parts of FERS require you to pay your share each pay period.  Your agency withholds the cost of the Basic Benefit and Social Security from your pay as payroll deductions.  Your agency pays its part too.  Then, after you retire, you receive annuity payments each month for the rest of your life.
The TSP part of FERS is an account that your agency automatically sets up for you.  Each pay period your agency deposits into your account amount equal to 1% of the basic pay you earn for the pay period.  You can also make your own contributions to your TSP account and your agency will also make a matching contribution.  These contributions are tax-deferred.  The Thrift Savings Plan is administered by the Federal Retirement Thrift Investment Board.

10. Federal Employees Retirement System (FERS)
FERS effective 1/1/1987
3 different components:
Basic Benefit Plan (+ Special Annuity Supplement)
Social Security
Thrift Savings Plan (up to 5% matching)
Burr, Coburn Chambliss senate bill: Public-Private Employee Retirement Parity Act introduced 11/12/ S 644
FERS-Congress created the Federal Employees Retirement System (FERS) in 1986, and it became effective on January 1, 1987.  Since that time, new Federal civilian employees who have retirement coverage are covered by FERS.
FERS is a retirement plan that provides benefits from three different sources:   a Basic Benefit Plan, Social Security, and the Thrift Savings Plan (TSP).   Two of the three parts of FERS (Social Security and the TSP) can go with you to your next job if you leave the Federal Government before retirement.   The Basic Benefit and Social Security parts of FERS require you to pay your share each pay period.  Your agency withholds the cost of the Basic Benefit and Social Security from your pay as payroll deductions.  Your agency pays its part too.  Then, after you retire, you receive annuity payments each month for the rest of your life.
The TSP part of FERS is an account that your agency automatically sets up for you.  Each pay period your agency deposits into your account amount equal to 1% of the basic pay you earn for the pay period.  You can also make your own contributions to your TSP account and your agency will also make a matching contribution.  These contributions are tax-deferred.  The Thrift Savings Plan is administered by the Federal Retirement Thrift Investment Board.

11. Federal Employees Retirement System (FERS)
FERS effective 1/1/1987
3 different components:
Basic Benefit Plan (+ Special Annuity Supplement)
Social Security (Reduced via Chained CPI)
Thrift Savings Plan (up to 5% matching)
No matching employer contribution
FERS-Congress created the Federal Employees Retirement System (FERS) in 1986, and it became effective on January 1, 1987.  Since that time, new Federal civilian employees who have retirement coverage are covered by FERS.
FERS is a retirement plan that provides benefits from three different sources:   a Basic Benefit Plan, Social Security, and the Thrift Savings Plan (TSP).   Two of the three parts of FERS (Social Security and the TSP) can go with you to your next job if you leave the Federal Government before retirement.   The Basic Benefit and Social Security parts of FERS require you to pay your share each pay period.  Your agency withholds the cost of the Basic Benefit and Social Security from your pay as payroll deductions.  Your agency pays its part too.  Then, after you retire, you receive annuity payments each month for the rest of your life.
The TSP part of FERS is an account that your agency automatically sets up for you.  Each pay period your agency deposits into your account amount equal to 1% of the basic pay you earn for the pay period.  You can also make your own contributions to your TSP account and your agency will also make a matching contribution.  These contributions are tax-deferred.  The Thrift Savings Plan is administered by the Federal Retirement Thrift Investment Board.

12. When Will I Be Eligible to Retire?
FERS-Congress created the Federal Employees Retirement System (FERS) in 1986, and it became effective on January 1, 1987.  Since that time, new Federal civilian employees who have retirement coverage are covered by FERS.
FERS is a retirement plan that provides benefits from three different sources:   a Basic Benefit Plan, Social Security, and the Thrift Savings Plan (TSP).   Two of the three parts of FERS (Social Security and the TSP) can go with you to your next job if you leave the Federal Government before retirement.   The Basic Benefit and Social Security parts of FERS require you to pay your share each pay period.  Your agency withholds the cost of the Basic Benefit and Social Security from your pay as payroll deductions.  Your agency pays its part too.  Then, after you retire, you receive annuity payments each month for the rest of your life.
The TSP part of FERS is an account that your agency automatically sets up for you.  Each pay period your agency deposits into your account amount equal to 1% of the basic pay you earn for the pay period.  You can also make your own contributions to your TSP account and your agency will also make a matching contribution.  These contributions are tax-deferred.  The Thrift Savings Plan is administered by the Federal Retirement Thrift Investment Board.

13. Types Of Retirements Regular/Optional Early Retirement Disability
Deferred
Phased Retirement
Both CSRS and FERS offer several types of retirements. When you retire, it is important you know which provision you retire under. The type of retirement can impact, among other things:
the amount of your benefit;
when your retirement can begin;
whether or not you are entitled to continue your Federal health and life insurance coverage after you leave the government; and
what happens to your retirement rights if you return to work with the Federal government after you retire.
The most common type of retirement is the “regular optional” retirement.
Under certain conditions, an employee who does not qualify for a regular optional retirement may qualify for retirement under the “early” retirement provisions.
If an employee becomes disabled, the retirement system provides for benefits.
The retirement system also has special provisions for certain employee groups such as law enforcement officers, firefighters, and air traffic controllers.
If you leave government before qualifying for one of the retirements mentioned above, you may qualify for a deferred retirement that begins at a later date.
Phased Retirement:
On July 6, President Obama signed the “Moving Ahead for Progress in the 21st Century Act” into law. It includes the phased retirement option for federal employees that will allow the employee to continue working while they sample retirement.
It is a nice option for employees and a valuable tool for managers to enable senior employees to mentor and train those who will eventually replace them.
Use of the option requires the mutual consent of the employee and the agency.
Employees will be eligible to participate if they have worked full-time for the preceding three year
Employees must be eligible to retire in order to choose phased retirement.
For those in the CSRS, that means at least age 55 with 30 years of service or 60 with 20 years of service.
Under FERS, employees must be the minimum retirement age (55-57, depending on year of birth) with 30 years of service, or 60 years old with 20 years of service.
(OPM did not mention retirement eligibility at age 62 with five years of service, which is available as a full retirement option under both CSRS and FERS. It is unclear if such employees will be offered the phased retirement choice.)
Employees who are subject to mandatory retirement are not eligible. This includes law enforcement officers, firefighters and air traffic controllers.
The additional time worked during the period of phased retirement will be added to increase an employee’s retirement benefit when he or she chooses to retire fully.
Initially, the only option will be to work 20 hours per week and receive 50 percent of the earned retirement benefit.
The employee will be permitted to return to full-time employment if the employing agency agrees to the change. If the employee chooses to return to full-time work, then the period of phased retirement would be treated as a period of part-time service. One year of part-time service scheduled at 20 hours per week would result in 50 percent of the normal annuity for that period of service. 
Sick leave will not be used to compute the phased retirement benefit. The balance of unused sick leave will be added to the computation of the final full retirement benefit.
The employee will continue to be eligible for benefits under the Federal Employees Health Benefits Program and Federal Employees Group Life Insurance. The coverage amount will be based on the full-time salary for the position. The FEHBP employer contribution will be the same as for other full-time employees (rather than the pro-rated amount that part-time employees receive).
If an employee owes a civilian or military service credit deposit, the decision to pay or not pay it must be made prior to entry into the phased retirement program. The effect of non-payment of a deposit will be permanent and no deposits or redeposit can be made at a later time.
Who’s would be a good candidate for phased retirement? An employee who:
Is eligible to retire
Is mentally ready to retire
Is financially able to afford to be retired
Is happy in their federal position
Wants to continue to provide service to the agency before full retirement
Wants to ease into retirement, rather than retiring cold turkey
Is interested in working part-time
Is not interested in pursuing a second career
Who is not a good candidate for this option? An employee who:
Is not eligible for retirement
Is not able to afford to retire
Is not happy in their current position
Needs a change of scenery from their current position
Wishes to have a second career while collecting full federal retirement
Has other plans for retirement, such as relocating, traveling or pursuing other interests (although these can certainly follow a period of phased retirement)

14. Age and Service Requirements for Regular Retirement55
30 years 60
20 years 62
5 years
CSRS
FERS
Age
Service
MRA
30 years 60
20 years
CSRS:
In order to retire voluntarily you must meet both the age and service requirements outlined in this slide.
Once you meet these requirements you can retire at any time.
Generally, your benefits will begin on the first of the month after you retire unless you retire within the first three days of the month. If you retire within the first 3 days of the month your benefits will begin on the day after you retire.
FERS:
The minimum retirement age starts at age 55 and gradually increases until age 57 depending on your year of birth.
Under FERS you may also retire on a regular retirement once you reach your MRA provided you have at least 10 years of service. If you retire under the MRA + 10 provision, your retirement benefit will be subject to an age reduction that equals 5% for each year you are under age 62 at the time your benefits begin.
Under FERS your benefits will generally begin on the first of the month unless you retire under the MRA + 10 provision. If you retire under the MRA + 10 provision, you may choose to postpone receiving your benefits until a later date to reduce or eliminate the age reduction.
Age Reduction If you have 10 or more years of service and are retiring at the Minimum Retirement Age, your annuity will be reduced for each month that you are under age 62.   The reduction is 5% per year (5/12 of a percent per month).  However, your annuity will not be reduced if you completed at least 30 years of service, or if you completed at least 20 years of service and your annuity begins when you reach age 60.  You can reduce or eliminate this age reduction by postponing the beginning date of your annuity.
Postponing the Beginning Date of Annuity to Reduce or Avoid the Age Reduction
You can reduce or eliminate the age reduction if you choose to have your annuity begin at a date later than the Minimum Retirement Age (MRA).  You can choose any beginning date between your MRA and 2 days before your 62nd birthday. However, you cannot begin your annuity while you are reemployed.
If you postpone the beginning date of your annuity, you should be aware of the following—
Life Insurance You cannot continue your life insurance coverage unless you are receiving an annuity.  Therefore, if you Postpone the beginning date of your annuity, your life insurance enrollment will terminate. When your annuity begins, the life insurance coverage you had when you separated from your employment will resume.
Health Insurance If you postpone the beginning date of your annuity, you will be eligible to temporarily continue your health benefits coverage for 18 months from the date of separation from your employing agency; however, you must contact your agency within 60 days and pay the total premium, plus a 2% administrative charge.  When your annuity payments begin, you will again have the opportunity to enroll in a health benefits plan under the regular Federal Employees Health Benefits Program, and OPM will pay the Government share of the premium.
Federal Long Term Care Insurance If you already have Long Term Care Insurance Coverage when you separate for retirement, but postpone the commencing date of your annuity, your coverage will continue as long as you continue to pay premiums. If you are not enrolled in the Federal Long Term Care Insurance Program when you separate for retirement, you can apply for enrollment anytime after your separation, even if you postpone the commencing date of your annuity.
COLAs If you delay your annuity beginning date, your annuity rate will not include any cost-of-living adjustments (COLAs) that occur before you begin to receive the annuity. Once your annuity begins, you will be entitled to COLAs on any portion of your annuity which was computed under CSRS rules. However, you will not receive COLAs on the FERS part of your benefit until you are 62.
Survivor Benefits If you defer receipt of your annuity and die before you begin to receive it, your spouse can still receive FERS survivor benefits.
NOTE: Under certain conditions, active duty military service may count toward the 30 year, 20 year or 10 year requirements. We will discuss this a little later. 62
5 years
MRA
10 years*
(*reduced benefits)

15. The Minimum Retirement Age is determined as follows:
If you were born
Your MRA is
Before years
In years, 2 months
In years, 4 months
In years, 6 months
In years, 8 months
In years, 10 months
In 1953 to years
In years, 2 months
In years, 4 months
In years, 6 months
In years, 8 months
In years, 10 months
In 1970 and after 57 years
The Minimum Retirement Age is determined as follows:
Before 1948, 55 years
years, 2 months
years, 4 months
years, 6 months
years, 8 months
years, 10 months
1953 to 1964, 56 years
years, 2 months
years, 4 months
years, 6 months
years, 8 months
years, 10 months
1970 and after, 57 years

16. Selecting a Retirement Date
CSRS
FERS
Last day of the month or 1st 2nd 3rd
Last day of the month

17. Crediting Service Years of service determine HOW MUCH you get
________________________________________
Years of service
determine
HOW MUCH you get
ELIGIBILITY
to retire
Everyone’s service history is different. It’s not like it used to be where you are hired under CSRS and continue to work for years with the Federal Gov’t.
(See Chap 20)
Factors include:
Non-deduction or temporary time
Service under another retirement plan for Federal employees
Part time, Full-time, Intermittent time
Questionable service
& 17

18. Amount of Creditable Service
Federal Civilian Service is normally credited from the beginning to ending date of an appointment
Exception:
Cumulative LWOP exceeding 6 months in a calendar year is not credited
unless the LWOP was due to an on-the-job injury & wage loss compensation was paid

19. Crediting Military Service
Honorable, Active Duty Service
Military Retired Pay Considerations
Post 1956 Considerations

20. Crediting Post-1956 Military Service
CSRS
FERS
Military deposit equals 7% of base pay plus interest
Military deposit equals 3% of base pay plus interest

21. Crediting Unused Sick Leave CSRS and FERS
Sick leave balance at retirement is added to the length of service to calculate the amount of an immediate annuity
Sick leave is not creditable for establishing retirement eligibility
As a result of the NDAA of FY 2010, FERS SL was allowed to be added to the annuity computation.

22. How Much Will I Get? Annuity Computation
Who can tell me what is involved in calculating the annuity? 22

23. Basic Annuity
Annuity is based on a percentage of the High year average salary
Percentage is determined by the amount of creditable service and the appropriate annuity formula
Securing Annuities for Federal Employees Act 2012

24. $ 3 5 Consecutive Years High 3 5 Average Salary
The high 3 average salary is the highest pay obtained by averaging the rates of basic pay in effect during any 3 consecutive years of service, with each rate weighted by the time it was in effect.
The 3 years need not be continuous, but they must consist of consecutive period of service. Two or more separate periods of employee that follow each other my be combined to make up the 3 years of service.
The 3 year period may start and end on whichever dates give the highest 3 years of basic pay. Since employee pay usually increases the longer you work, the high-3 usually occurs during the last 3 years of service. However, any 3 years will be used if it produces a higher average salary.
A break of 3 calendar days or less will be used to compute the high-3.
LWOP status for 6 months or less may be used in the high-3, however, LWOP over 6 months will not be used to compute the high-3.
Military pay will not be used in computing the high-3 unless the military service interrupts the civilian service and the employee exercises reemployment or restoration rights, civilian pay is projected over the period of military service and used to compute the high-3.

25. Basic Pay Includes: Regular Pay Night Differential
See Chapter 30 for list of inclusions.

26. Basic Pay Does Not Include:
Bonuses
Overtime
Allowances

27. 1% or 1.1%* x years of service
General Formula
CSRS
FERS
1.5% x 5 years +
1.75%x 5 years +
2% x service over
10 years
1% or 1.1%* x years of service
The general formula is used to compute basic annuities for voluntary, early voluntary, discontinued service, and deferred retirements. It is also used to compute disability retirements when the employee is over age 60 or the earned annuity is greater than the disability guaranteed minimum.
Under FERS, the general formula applies to the FERS component of an employee who transferred to FERS. While the CSRS general formula would apply to the CSRS component of an employee who transferred to FERS.
*1.1% if age 62 with 20 years

28. General Formula CSRS FERS 30 Years Total Service 1 % x 30 = 30% or
7.50%
8.75%
40.00%
56.25%
Chapter 50, see Charts
1.1% x 30 = 33%

29. CSRS Calculation Example
Employee has 30 years of service and the
High 3 5 average salary is $56,000 $54,320*
1.5% of $56, $54,320 x 5 years = 4, $4,074
1.75% of $56,000 $54,320 x 5 years = 4, $4,753
2.0% of $56,000 $54,320 x 20 years = $ 22,400 $21,728
Basic Annuity (per year) = $ 31, $30,555
*Median 3% reduction high 5 vs high 3
CSRS Example:
Employee has 30 years of service and high-3 average salary of $98,000
1.5% of $98,000 (or $1470) x 5 years = $7,350
1.75% of $98,000 (or $1715) x 5 years = $8,575
2% of $48,000 (or $1960) x 20 years = $39,200
Basic Annuity (per year) = $55,125
(/12 = $4,593 per month)

30. FERS Calculation Example
Employee, age 62, has 24 years of service and high-3 average salary of $56,000
1.1% of $56,000 or $616 x 24 = $14,784 or
1.1% x 24 = 26.4%
26.4% x $56,000 = $14,784
FERS Example:
Employee, age 62, has 24 years of service and high-3 average salary of $98,000
1.1% of $98,000 (or $1,078) x 24 = $25,872
(/12 = 2,156 per month)

31. FERS Special Annuity Supplement
Substitutes for the Social Security part of the total FERS benefit until age 62
Approximates the Social Security benefit earned under FERS
Subject to earnings test
No COLAs
Ends at age 62
The FERS Annuity Supplement is paid to certain FERS employees who retire before age 62. The supplement is an estimate of the amount of Social Security benefits earned during FERS civilian service.
If you retire before you reach age 62, you will be able to receive your FERS Basic Benefit, and if you choose, your Thrift Savings Plan benefit. You will not be able to receive your Social Security benefit until you reach age 62. However, you may qualify to receive the FERS Annuity Supplement until you reach age 62.
FERS Annuity Supplement---Chapter 51
Substitutes for the Social Security part of the total FERS benefit until you reach age 62.
Approximates the SS benefit earned while you worked under FERS.
Subject to the Social Security earnings test. If you work after retirement, your post-retirement earning could reduce or eliminate your FERS Supplement. The 2012 SS earnings limitation is $14,640. See BAL Annual Changes.
No COLAs

32. FERS Special Annuity Supplement
To be eligible for the Supplement
Employee must have 1 full calendar year of deductions under FERS, and
Must qualify for an immediate, non-disability retirement (other than an MRA+10 retirement)
You can receive this supplement if you have worked under FERS for at least 1 calendar year, and you retire on an immediate, non-disability annuity (other than the “MRA + 10” retirement provision).
If you retire before you reach your MRA under an Early Optional or Discontinue Service Retirement, you have to wait until your MRA before you start receiving the Supplement.

33. Calculation of Special Annuity Supplement
Get Social Security estimate of projected age-62 benefit
Multiply by years of FERS coverage
Divide by 40
You can receive this supplement if you have worked under FERS for at least 1 calendar year, and you retire on an immediate, non-disability annuity (other than the “MRA + 10” retirement provision).
If you retire before you reach your MRA under an Early Optional or Discontinue Service Retirement, you have to wait until your MRA before you start receiving the Supplement.

34. Sample Calculation of Special Annuity Supplement
Social Security age-62 projection = $18,000/year
30 years of FERS coverage
$18,000 x 30 / 40 = $13,500
You can receive this supplement if you have worked under FERS for at least 1 calendar year, and you retire on an immediate, non-disability annuity (other than the “MRA + 10” retirement provision).
If you retire before you reach your MRA under an Early Optional or Discontinue Service Retirement, you have to wait until your MRA before you start receiving the Supplement.

35. Reductions Applied to Basic Annuity
CSRS
FERS
Age
Non-Deduction Service
Survivor Annuity Election
Refunded Service
CSRS Offset
If CSRS component, Age
MRA + 10 Age
Survivor Annuity Election
Chapter 50-
The basic annuity may be reduced for:
Retirement before age 55
Unpaid deposit for nondeduction service performed prior to October 1, 1982
Election of (or court ordered) survivor annuity benefits for a spouse and/or former spouse;
Election of a survivor annuity benefit for a person with an insurable interest
Unpaid redeposit for refunded service performed prior to March 1, 1991 (credited & actuarially reduced);
Election of the alternative annuity; and
An offset amount for offset employees who are eligible for Social Security benefits.

36. CSRS Age Reduction Permanent Reduction
Equals 2% for each full year under age 55
Applies to CSRS annuities or CSRS component of a FERS/CSRS annuity
1/6 of 1% for each full month.
Eg, Early Out authority, DSR (Chart 5) 36

37. FERS Age Reduction
Applies if the employee retires on an MRA + 10 retirement
Employee begins receiving annuity before age 62
Permanent reduction equals 5% for each full year under age 62
The annuity of an employee who retires under early deferred or MRA + 10 provisions is reduced by five-twelfths of 1 percent for each full month (5 percent a year) the employee is under age 62 at the commencing date of the annuity.

38. Reduction for Survivor Annuity
Applies if an employee
Elects a survivor annuity for a spouse and/or former spouse
Has a former spouse entitled to a survivor annuity based on a valid court order, and/or
Elects to provide someone with an insurable interest annuity 38

39. Survivor Annuity Reduction
FERS
CSRS
2 1/2 % x $3600 +
10 % x Amount of base in excess of $3600
Survivor receives 55% of the base elected by retiree
Full survivor annuity (50%)
10% of annuity
Partial survivor annuity (25%)
5% of annuity
CSRS-A spousal survivor annuity is 55% of an annuity computed as if the employee had retired on a disability retirement as of the date of death.
A spouse receives 55% of the HIGHER of 1 or 2 below: An annuity computed under the general formula (see Chap 50) based on the deceased employee's Hi-3 avg salary and length of service to DoD, including credit for unused sick leave.
A "guaranteed minimum" which is the LESSER of: 40% of the deceased employee's Hi-3 average salary; or
The regular annuity obtained after increasing the deceased employee's length of service by the period of time between the date of death and the date he or she would have been age 60.
FERS--A spousal survivor annuity is computed as if the employee retired optionally (with no age reduction) on the date of death.
Survivor receives 50% of the employee's basic annuity, based on the deceased employee's type of service, age, length of service, and high-3 average salary at date of death. (See Chapter 50.)
For employees with a CSRS annuity component, the spouse receives 50 percent of the combined CSRS and FERS benefit.

40. Insurable Interest
A person who has a reasonable expectancy of financial benefit in the continued life of the employee
Reduction to provide a survivor annuity to someone with an insurable interest ranges between 10 and 40%
Named survivor for II annuity will receive an annuity at 55% of the retiree’s reduced annuity rate. The amount of reduction will vary according to the relative age difference between the retiring employee & the named survivor.

41. Insurable Interest New regulations effective July 20, 2013
Presumed Insurable Interest for Same Sex Domestic Partners
The modification of the pre-existing rule now includes same-sex domestic partners in the class of persons presumed as having an insurable interest in the continued life of the employee/retiree
Final rule: Fed Register
Previously, there were 5 groups presumed, now 8, including current, former & intended same-sex domestic partner.
5 CFR and

42. There is no maximum annuity under FERS
CSRS
FERS
80% of the high-3 average salary
Equivalent to 41years and 11months service
Limit may be exceeded with sick leave credits
There is no maximum annuity under FERS

43. Returning to Government Work After Retirement
Generally, annuity continues and salary is offset by amount of annuity
Exceptions (CSRS)
Disability annuitants
Exceptions (FERS)
Disability annuitants
Reemployed annuitants, Chapter 100
Dual Comp Waiver=
Approval for DCW goes to OPM’s POC in the Agency & Veterans Support office

44. Cost of Living Adjustments (COLAS)
CSRS
FERS
Begins the first December after retirement
First COLA is prorated
Generally not applied until the December after age 62
Exception
Disability
COLAs are not automatic. There was no COLA payable for retirees in 2010 & 2011
Consumer Price Index (CPI) for urban wage earners and clerical workers from the third quarter average of the previous year to the third quarter average for the current year.
COLA for 2013?
OPM website has the list of all COLAs at:

45. Cost of Living Adjustments (COLAS)
FERS
CSRS
If the percent change in the CPI is:
0-2% the COLA equals the CPI increase
2-3% the COLA equals 2%
Over 3% the COLA equals the change in the CPI minus 1%
Equals the percent change in the Consumer Price Index (CPI)
Rounded down to the next whole dollar.
2% or less---2%
>2% but < 3%---2%
> 3%---3% minus 1

46. Questions