CSRS and FERS Overview pending legislative changes.

CSRS and FERS Overviewpending legislative changes

Retirement Systems

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• Civil Service Retirement System (CSRS)

• Federal Employees Retirement System (FERS)

How Much Do I Pay?

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Employee Contribution Amounts

Civil Service RetirementSystem (CSRS)

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• CSR Act effective August 1920

• A Defined Benefit Plan

Civil Service RetirementSystem (CSRS)

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Federal Employees Retirement System (FERS)

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• 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


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When Will I Be Eligible to Retire?

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Types Of Retirements

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• Regular/Optional

• Early Retirement

• Disability

• Deferred

• Phased Retirement

Age and Service Requirements for Regular Retirement

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Age Service

55 30 years

60 20 years

62 5 years

CSRS

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Selecting a Retirement Date

Last day of the month

or1st 2nd 3rd

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CSRS

Crediting Service

________________________________________

&ELIGIBILITY to retire

HOW MUCH you get

Years of service

determine

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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

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Crediting Military Service

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• Honorable, Active Duty Service

• Military Retired Pay Considerations

• Post 1956 Considerations

Crediting Post-1956 Military Service

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CSRS

Military deposit equals 7% of base pay plus interest

Crediting Unused Sick LeaveCSRS 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

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How Much Will I Get?

Annuity Computation

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Basic Annuity

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$ $ $

Basic Pay Includes:

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Basic Pay Does Not Include:

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General Formula

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CSRS

1.5% x 5 years +1.75%x 5 years +2% x service over

10 years

General Formula

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30 Years Total Service

1.5% x 5

1.75% x 5

2.0% x 20

=

=

=

7.50%

8.75%40.00%

56.25%

CSRS

CSRS Calculation Example

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Reductions Applied to Basic Annuity

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• Age• Non-Deduction

Service• Survivor Annuity

Election• Refunded Service• CSRS Offset

CSRS

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

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Reduction for Survivor Annuity

• 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

Applies if an employee

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Survivor Annuity Reduction

CSRS

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2 1/2 % x $3600+

10 % x Amount of base in excess of

$3600

Survivor receives 55% of the base

elected by retiree

Insurable Interest

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• 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%

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

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Maximum Annuity

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• 80% of the high-3 average salary

• Equivalent to 41years and 11months service

• Limit may be exceeded with sick leave credits

CSRS FERS

Returning to Government Work After Retirement

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Generally, annuity continues and salary is offset by amount of annuity

• Exceptions (CSRS)

• Disability annuitants

Cost of Living Adjustments (COLAS)

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CSRS

• Begins the first December after retirement

• First COLA is prorated

Cost of Living Adjustments (COLAS)

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CSRS

Equals the percent change in the Consumer Price Index (CPI)

Questions

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CSRS and FERS Overview pending legislative changes.

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