Using and aall lesser three replacement sources, retirees of income under for FERS those can who secure earned a financially higher wages. comfortable retirement. Using all CSRS, three sources, on the other retirees hand, under is a FERS single can benefit secure plana financially that can replace comfortable up to 80 retirement. percent of an CSRS, employee’s on the high-3, other hand, depending is a single on thebenefit number plan of years that can of service. replace For up to 80 percent example,ofan anemployee employee’s who high-3, is qualified depending to on the retire number underof CSRS yearswith of service. 30 years Forofexample, service an would employee receivewho a benefit is qualified equalto toretire 56.25under percent CSRS of his or with her30high-3. years of CSRS service employees would receive are a vested benefit inequal their to retirement 56.25 percent benefits of his after or her high-3. five years CSRS of federal employees service, are vested but anyinSocial their retirement Security benefits benefits earned after five by ayears CSRSofretiree federal service, are impacted but any bySocial the Windfall SecurityElimination benefits earned Provision by (WEP) a CSRSand retiree the are Government impacted by the Pension Windfall Offset Elimination (GPO) provisions Provision that (WEP) will and reduce the(or Government in the casePension of the GPO, Offsetoften (GPO) provisions eliminate) entitlement that will reduce to Social (or in Security the case of the benefits. GPO, Due oftentoeliminate) its lack ofentitlement Social Security to Social Security coverage,benefits. CSRS has Due been to its called lack of theSocial “golden Security handcuff” coverage, program, CSRS as ithas provides been called incentive the “golden for workers handcuff” to remain program, employed as it in provides the incentive government for for workers the entire to remain span employed of their in the careers. government for the entire span of their careers. FERS was developed at a time when it wasFERS becoming was developed less common at a time to stay when with it one was employer becoming untilless retirement. commonIndividuals to stay withborn one employer in the latter until years retirement. of the baby Individuals boom (1957born in 1964) the held latteran years average of the ofbaby 11.9 jobs boomfrom (1957age 1964) 18 to age held50, anaccording average ofto 11.9 thejobs U.S.from Bureau age 18 of Labor to age Statistics. 50, according FERS to the wasU.S. designed Bureau of Labor to be more Statistics. flexible FERS since was more designed employees to be more today flexible enter federal since more service employees at midcareer todayor enter leave federal before they service areat eligible midcareer for retirement. or leave before The TSP they and are Social eligible Security for retirement. benefits are The TSP and completely Social Security portablebenefits when anare employee completely portable separateswhen froman employment. employee separates The employee from employment. contributionsThe andemployee matchingcontributions agency fundsand matching are vestedagency immediately funds are in the vested TSP,immediately and the in 1 percent the TSP,automatic and the 1 contribution percent automatic from the agency is vested after three years. Social Security benefits can be earned by having 40 credits of coverage, which requires about 10
FERS was designed to be more flexible since more employees today enter federal service at midcareer or leave before they are eligible for retirement.” contribution from thesubject agency to is vested after years of employment the FICA tax. three Social Security benefits retires can be Today,years. the average CSRS employee earned by having 40 credits of coverage, with almost 34 years of government service, which requires about 10 years of employment while the average FERS employee has an subject tax. average averageto ofthe 21.5FICA years of Today, servicethe at retirement. CSRS employee retires with almost 34 years Insurance coverage is also an important of government service, while the average part of retirement planning. Along with FERS employee has federal an average of 21.5 years retirement income, employees valueof service at retirement. the ability to keep their Federal Employees Insurance coverage also an important Health Benefit (FEHB)isprogram, Federal part of retirementGroup planning. with retirement Employees’ Life Along Insurance (FEGLI) income, federal employees value theDental ability to program, and Federal Employees keep their Federal Employees Health Benefit and Vision Insurance Program (FEDVIP). program Separated (FEHB), employees Federal andEmployees’ eligible family Group Life Insurance program to (FEGLI), and Federal members can continue be insured under Employees and Vision the FederalDental Long Term Care Insurance Program Separated employees Program (FEDVIP). (FLTCIP) as long as they pay the and eligible family members can continue required premiums and have not exhausted to be insured the Both Federal Longand Term their lifetimeunder benefits. FEHB FEGLI Care have Insurance a “five-year Program test” to (FLTCIP) continue as coverage long as in they retirement. pay the required premiums and have not exhausted their lifetime benefits. Both FEHB and FEGLI have a “five-year test” to continue coverage in retirement.
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