BENEFIT INSIGHTS

Frequently Asked Questions
> Glossary of Terms
Privacy Policy

Terms
CSRS
FERS
Trans-FERS
Survivor Benefit
Thrift Savings Plan
FEGLI

CSRS

1. 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.
2. CSRS benefits are based on the employee’s “high 3” average pay and the years of service. Under the general formula, 30 years of service provides 56.25 percent of “high 3” average salary.
3. 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. The employing agency matches the employee’s CSRS contributions.
4. Employees may contribute up to 10 percent of the basic pay for their creditable service to a voluntary contribution account. Accounts earn a market rate of interest. The employee may withdraw the funds from the account at any time or use them to purchase an additional annuity at retirement. The additional annuity is $7 a year for each $100 in the account, plus $.20 for each full year the person is over age 55 at retirement.
5. Employees may contribute up to 5 percent of pay to the Thrift Savings Plan. There are no Government contributions.
6. CSRS-Offset employees are covered by Social Security benefits because they were separated from CSRS Federal Employment for more than one year and returned to a position in which they were covered by CSRS after 1983. For these employees, their OASDI withholdings are offset from their CSRS contributions, so the combined Social Security and CSRS contributions are the same as for employees who have CSRS coverage only.
7. When CSRS Offset employees retire, they receive full CSRS benefits until they are eligible for Social Security benefits, generally at age 62. At that time the CSRS benefit is offset by the portion of their Social Security benefit that represents the period of time they were covered by both CSRS and Social Security.

FERS

1. The Federal Employees Retirement System (FERS) is a three-tiered plan consisting of Social Security, a basic FERS annuity and the Thrift Savings Plan.
2. Employees under FERS are covered by full Social Security taxes.
3. The basic FERS annuity is based on the employee’s length of service and the “high-3” average pay. For most employees, the formula for computing the annual annuity is 1 percent of average pay for each year of creditable service. Employees contribute 0.8 percent of pay to FERS for the basic benefit.
4. Employees may contribute up to 10 percent of their pay to the Thrift Savings Plan. These contributions are tax-deferred. The Government contributes 1 percent of pay and matches a portion of the employee’s contributions. The maximum Government contribution is 5 percent of pay.

Trans-FERS

1. Employees transferring to FERS from CSRS can take advantage of both retirement systems. These employees keep the benefits they have already earned and build on them.
2. All CSRS service is creditable toward eligibility for death and disability benefits, as well as retirement, so that there is no gap in protection.
3. If the employee transfers, the past CSRS service and all future FERS service will be added together to determine retirement. Instead of the CSRS retirement rules, the employee will follow the FERS retirement rules.

Survivor Benefit

Benefit paid to an individual entitled to a benefit based on the service of a deceased employee or annuitant.

Thrift Savings Plan

A retirement savings and investment plan established by Congress in the Federal Employees’ Retirement System Act of 1986 to provide Federal employees savings and tax benefits to those offered by many private corporations. It is a defined contribution plan administered by the Federal Retirement Thrift Investment Board. CSRS employees can also contribute but receive no agency contributions.

FEGLI

1. Federal Employees' Group Life Insurance (FEGLI) Program was established August 29, 1954. It is the largest group life insurance program in the world, covering over 4 million Federal employees and retirees, as well as many of their family members.
2. FEGLI provides group term life insurance. As such, it does not build cash value or paid-up value. It consists of Basic life insurance coverage and three options. In most cases, if you are a new Federal employee, you are automatically covered by Basic life insurance and your payroll office automatically deducts premiums from your paycheck unless the coverage is waived. In addition to the Basic plan, there are three forms of optional insurance that can be elected. Basic insurance must be in effect in order to elect any of the options. Unlike Basic, enrollment in Optional insurance is not automatic -- you must take action to elect the options.
3. The cost of Basic insurance is shared between you and the Government. You pay 2/3 of the total cost and the Government pays 1/3. Your age does not affect the cost of Basic insurance. You pay the full cost of Optional insurance, which cost is dependent on age.
4. The Office of Federal Employees' Group Life Insurance (OFEGLI), is a private entity that has a contract with the Federal Government, claims are processed and paid under the FEGLI program.