csrs and fers overview pending legislative changes
TRANSCRIPT
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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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
Federal Employees Retirement System (FERS)
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Federal Employees Retirement System (FERS)
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Federal Employees Retirement System (FERS)
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Federal Employees Retirement System (FERS)
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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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