Federal Employee Benefits
FERS and CSRS federal employee retirement benefits are generous, however they will cost you retirement dollars, especially for health and life insurance coverage.
Uncle Sam will continue federal employees health benefits, as long as you were enrolled in the program for the last five years of your service, however you must pay the same monthly amount that you paid while working. You can also continue life insurance coverage and if you participated in the Thrift Savings plan you have many withdrawal options to consider.
Retirement benefits and insurance options for federal employees include your basic annuity, Social Security in many cases, Social Security Offset for certain FERS retirees, Medicare, Thrift Savings Plan withdrawals, and numerous insurance options that you can opt to carry into retirement.
Another issue to consider when you decide to leave is proper beneficiary designations for your insurance coverage, annuity, Thrift Plan and other investments and savings.
FERS Retirement:
One of two types of retirement offered by the Federal Government, the Federal Employee Retirement System (FERS) offers three levels of benefits:
• Federal Pension Annuity
• Social Security
• The Thrift Savings Plan (TSP)
Retirement Eligibility with FERS is dependent upon employee age and years of creditable services and is broken down into the following groups:
• NO REDUCTION
• Early/Reduced
• Deferred -Delay receiving annuity until 62 with no penalty
• Involuntary (Reduction in Force)/Voluntary (VERA)
• Special Provisions- E.G.-LAW ENFORCEMENT
Active Duty Military Service IS creditable. You only have to repay 3% of total earning plus interest.
• Army
• Air Force
• Navy
• Coast Guard
• Marine Corps
Civil Service Retirement System (CSRS)
For employees hired prior to 01/01/1984. Eligibility with CSRS is determined by age and years of creditable service.
CSRS Contributions are mandatory through payroll deductions:
• 7% Regular Employees
• 7.5% Employees under Special Provision (i.e. Law enforcement, firefighters, air traffic controllers)
• All contributions are paid with after tax dollars.
CSRS retirement income is determined by length of creditable service and High-3 Average pay and takes into account the following:
• Sick Leave (calculated only in whole months)
• Time between appointment and separation where contributions were made to the retirement system
• Leave without pay (up to 6 months per calendar year)
• Certain Workers Compensation
• Breaks up to 3 days in length
• Military/Deposits/Re-deposits
• Part-time service (prior to 04/07/1986 receives full credit for eligibility and annuity calculations, on or after 04/07/1986 receives full credit for eligibility and prorated credit for annuity calculations)
CSRS Offset
CSRS Offset employees are "grandfathered" to the CSRS rules for retirement eligibility and retirement pension.
To be eligible for CSRS Offset you must have met the following criteria:
• hired by government after 12/31/1983 (*these employees will also be covered by Social Security)
• CSRS employees with a break in service of more than 365 days
• 5 years of service under CSRS prior to 01/01/1984
• Rehired after 12/31/1983
FEGLI: Federal Employee Group Life Insurance
Federal Employee Group Life Insurance provides a life insurance policy to federal employees and their families as a Group Benefit. FEGLI does not require an examination, and premiums are collected bi-weekly from payroll deduction (note: premiums can increase dramatically over time depending on the FEGLI option selected at time of initial hiring or during open enrollment.
Basic Option:
• adjusts annually when your salary changes
• provide a tax free single payment to your beneficiary choice
• appears on your LES under your deduction section as “FEGLI”
Options A, B & C provide individuals with options that augment their own existing life insurance policy:
• Option A: provides up to $10,000 coverage
• Option B: provides up to 5X individual salary (note: once you reduce or eliminate this option, the insurance company keeps 100% of the premium you have paid into the program)
• Option C: Family Insurance that provides up to 5 units for spouse and children, similar to Option B as it increases dramatically and premiums are forfeited when cancelled