CSRS — The Background and Nitty-gritty

I’m continuing today with an excellent summary of the CSRS (Civil Service Retirement System) that was put together by the OPM (Office of Personnel Management, the successor to the old Civil Service Commission).  Some might ask, perhaps, why are you just republishing large blocks of information here … it’s already on line?  Well, you’re right, except for one thing … you didn’t find it there before, did you?  Neither did I.  Like any large government agency’s site OPM.GOV is loaded with information, some up-to-date, some archaic, and no matter how hard a web developer tries to make a menu and search system, there’s no way for anyone to find everything the first time.  Here’s a review:

The Civil Service Retirement System (CSRS) originated in 1920 and has provided retirement, disability and survivor benefits for most civilian employees in the Federal government, until the creation of a new Federal Employees Retirement System (FERS) in 1987.  However, over 2 million people continue receiving Civil Service Retirement System retirement and survivor benefits each month.

Retirement benefits are now financed by both employee and Government contributions to the retirement fund, and provide benefits based on length of service and the average salary over the highest three years of pay.

When You May Retire with CSRS

You may retire under CSRS if you have at least 5 years of civilian service and meet one of the following age and service requirements:

Type of Retirement

Minimum Age

Minimum Service (Year)

Special Requirements

Optional

62

5

None

60

20

None

55

30

None


Special Optional

50

20

Special Optional - You must retire under special provisions for air traffic controllers or law enforcement and firefighter personnel. Air traffic controllers can also retire at any age with 25 years of service as an air traffic controller.


Early Optional

Any Age*

50*

25

20

Early Optional - Your agency must be undergoing a major reorganization, reduction-in-force, or transfer of function as determined by the Office of Personnel Management.

Discontinued Service

Any Age*

50*

25

20

Discontinued Service - Your separation must be involuntary and not a removal for misconduct or delinquency.

Disability

Any Age

5

Disability - You must be disabled for useful and efficient service in your current position and any other vacant position at the same grade or pay level within your commuting area and current agency for which you are qualified.**

*   Annuity is reduced if under 55.
** Application must be prior to retirement, or within 1 year after separation, except in cases of mental incompetence.

How CSRS Annuities Are Computed

Your basic annuity is computer based on your length of service (including unused sick leave if you retire on an immediate annuity) and your ‘high-3′ average salary.  The basic formula is as follows:

Bullet First 5 years of service x 1-1/2 percent of your high-3 average salary PLUS
  
Bullet Number of years of service from 6 to 10 years x 1-3/4 percent of your high-3 average salary PLUS
  
Bullet Number of years of service over 10 years x 2 percent of your high-3 average salary.

A simple way to calculate this is to take your years of service, SUBTRACT TWO and MULTIPLY by TWO.  This will give you a very close estimate of the percentage of your high-3 average salary that you will receive in retirement.

The Office of Personnel Management and the Social Security Administration have teamed up to develop the Federal Employees Retirement Calculator.  This model gives a very accurate estimate of benefits. HOWEVER, if you have temporary or military service, or took a refund of your retirement contributions that you have not repaid, the estimate may be higher than your actual benefits.  Talk to your Servicing Personnel Office to learn how such service may affect your benefits.

Your basic annuity will be reduced if: (a) you retire before age 55 (unless you retire for disability or under the special provisions for law enforcement officers, air traffic controllers, and firefighters); (b) you didn’t make a deposit for service performed prior to October 1, 1982, during which no deductions were taken from your pay (non-deduction service after that date is not used in the computation of benefits if the deposit is not paid); (c) you didn’t make a redeposit of a refund for a period of service that ended before October 1, 1990; or (d) you provide for a survivor annuitant.

Your annuity will be increased periodically by cost-of-living increases that occur after you retire. Your initial cost-of-living increase will be prorated based on how long you have been retired when that cost-of-living increase is granted.

OTHER CSRS TOPICS

Credit for Military Service
Disability Retirement
If You Retire Before Age 55
If You Died in Service
Providing for Your Survivors on Retirement
CSRS Offset Employees
Thrift Savings Plan

There you have today’s lesson.  Now you know how to figure out what the CSRS client actually makes.

As always, remember that this is lay advice.  If you have a legal, actuarial, accountancy or tax issue you must rely only upon the advice of a qualified professional.

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Comments

  1. Hi, I was trying to access the information you have under the above title but the link isn’t working. I just recently returned to federal civil service after about a 20 year break. I’ve been in the AF Reserves for 21 years and had about 13 years federal civil service when I left. One of my AF Reserves coworkers told me he thinks I can get credit for my active duty military days and apply those days to my SCD in Federal civil service to reach that 15 year mark for annual leave purposes. Was hoping your information would cover that issue. Can you reactivate the link so I can see what is there? Thanks.

    • @Mary K Wagner: Hi Mary, thanks for reading and for commenting. I’m not sure what the link problem is, I’ll try to fix things, but the answer to your question is likely yes. I think your coworker may well be correct. See section 1-6 in this document and visit your civilian personnel office for a reading. I thought at first the answer was no. I’m glad you raised the question and that I looked it up, becuase it’s very likely that you can get credit for the actual active days served.. Give it a shot and hope you get the extra leave days: http://www.opm.gov/feddata/gppa/gppa06.pdf

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