Civil Service Retirement

Civilian non political appointees and federal employees fall in to the category of US civil servants. There are two legislations that cover civil service retirement benefits, the civil service retirement act known as the CSRA was established in the 1920’S. It was the first initiative that created a federal civil service retirement system. The Federal Employees Retirement System (FERS) was implemented in 1987 , this act replaced CSRA and became the standard civil service retirement plan for civil servants entering service after January 1st 1987.

Those who served before the recent act fall in to the previous act of CSRA , in accordance with that act employees contributed 7 %to 8% of their total paycheck. Civil servants belonging to CSRA do not pay for social security or for survivor and disability tax, but have to pay for Medicare tax. Annuity is built up through the contribution of the employee and the employer, and is not subjected to market fluctuations. The employee can contribute to his annuity at his discretion, the employer annuities are not subjected to tax till employee retires.

Civil servants who assumed work after January 1st 1987 falls under The Federal Employees Retirement System (FERS). Under this retirement plan Civil servants can receive remuneration from Social Security, Thrift Savings Plan and Basic Benefit. The employee has to pay the Basic benefits and Social Security, the employer withholds pay on that account, however the employer provides 1% of the employee’s salary towards the Thrift Savings Plan. Like the CSRA plan annuities are returned upon retirement and all such are exempt from taxes.

The two basic civil service retirement plans are available as hand books, it is good to be familiar with all the relevant information, the sources are available on line in the US Office of Personal Management, which is government overviewed and credited and the information is available for download . There are many pamphlets and guides pertaining to the interest of federal employees and publications from both CSRS and FERS civil service retirement plans. The website also features aspects such as Military service credit, early retirement options, disability, information regarding refunds, voluntary contributions under the retirement plans, re-employment opportunities etc, under both civil service retirement covers and are available for download. Most states have a regional retirement plan and a department of civil service in the relevant state in line with the Federal plan, since states differ in their tax assessments it would be wise to get in touch with the respective state’s department of civil service to ensure the best possible annuity.