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.
The civil service retirement calculator is used to calculate the retirement benefits under the civil service retirement system. The system for calculating civil service retirement benefits can be complicated. Civil service retirement calculator allows easy calculation of retirement benefits by entering the required information.
The government follows a formula called the CSRS to calculate civil service retirement benefits. This formula is complex and is not easy to apply. Civil service retirement calculator provides an easy, fast and effective way to calculate retirement benefits.
The civil service retirement calculator uses information such as age at retirement, years of service, high 3 salary and unused sick days to calculate the estimated Basic Annual Annuity, Annuity with benefits and the survivor benefits when they apply.
Age at retirement refers to the age at which a civil servant wishes to retire. The number of years of service refers to the number of years employed under the civil service retirement system.
The high 3 salary refers to the average of the highest three years of salary earned in three consecutive years. This is calculated by adding the salaries of the highest three years of pay and then averaging it. This is normally the average of the last three years’ salary. This calculator uses a 261 day work year in order to calculate the unused sick leaves. These are then turned to credit that adds up to the years of service.
The civil service retirement calculator uses the years of service credited, total years of credited service, annuity percentage from years, total annuity percentage and annuity reduction for age in order to calculate the basic annual annuity, cost of survivor benefits and annual annuity with survivor benefits.
Years of credited service are calculated using the number of unused sick leaves that are entered earlier. Annuity percentage from years is the multiplier effective for the years of service. For example under the CSRS annuity percentage for the first five years of service is 1.5%, next five years 1.75% and any number of years after that 2%. Total annuity percentage is the sum of annuity percentages calculated earlier.
When a civil servant retires before the retirement age, a certain percentage of the annuity is reduced for each year before the age of retirement. Civil service retirement calculator calculates annuity reduction for age in the case of early retirement.
A civil service retirement calculator can be found online. The figures calculated by the civil service calculator are only estimated figures. However, the calculations are accurate given that the information entered are accurate. Since the accuracy of the calculations depend on the accuracy of the information entered, it is important to enter the correct years of service, unused leave and average salary and the age at which the retirement is expected.
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