This booklet describes your benefits as an active participant under the Civil Service Retirement System (CSRS).
If you have been previously employed with the Federal Government and are now returning, you may be eligible to elect coverage under the Civil Service Retirement System (CSRS) if: you were covered by CSRS or another Federal civilian retirement system on December 31, 1983, and if separated on or after December 31, 1983, the break in service has been less than 366 days, and you have not received a refund of your contributions to the CSRS or another Federal civilian retirement system since June 14, 1984, and you have not ceased to be covered by CSRS after December 31, 1983, while performing service in the Legislative branch. The withholding will be 7.5% of gross salary.
If you do not meet the above requirement, you will be covered by Social Security (FICA), but you may also be eligible to participate in the Civil Service Retirement Offset System if: you have five (5) or more year3 of creditable Federal civilian service and were previously covered by the CSRS or the Foreign Service Retirement System during some portion of that service. The current withholding is 1.3% of gross salary up to the Maximum Taxable Wage Base under Social Security, then 7.5% of gross salary for the remain of the calendar year. If you have been rehired after a break in service of four (4) calendar days or more and meet the above eligibility requirements for coverage under the Civil Service Retirement System or Offset System, and elect such coverage, you may within six (6) months of being rehired elect to transfer to the Federal Employees Retirement System (FERS).
WINDFALL ELIMINATION PROVISION
CIVIL SERVICE RETIREMENT OFFSET SYSTEM
To be entitled to an immediate annuity at the time of separation, an employee must have:
An employee who does not meet any of the above conditions, but has completed 5 or more years of civilian service at the time of separation, will be entitled to a deferred annuity beginning at age 62 provided he/she does not withdraw his/her contributions from the retirement fund.
An employee who, after completing 5 years of civilian service becomes totally disabled for useful and efficient service in his/her current position may apply for a disability annuity regardless of age.
In addition to the above age and service requirements, to be eligible for an annuity, other than by death or disability, an employee must have had retirement deductions withheld from his/her salary for at least 1 year during the 2 year period immediately preceding the separation.
The percentages of basic pay withheld for the Civil Service Retirement System are as follows:
| 08-01-20 | to 06-30-26 | 2.5% |
| 07-01-26 | to 06-30-42 | 3.5% |
| 07-01-42 | to 06-30-48 | 5.0% |
| 07-01-48 | to 10-31-56 | 6.0% |
| 11-01-56 | to 12-31-69 | 6.5% |
| 01-01-70 | to Present | 7.5% (7.0% Nonlegislative) |
The rate of contribution for post-1956 military service is 7% of the basic pay in effect at the time the service was performed.
Credit is given without any deposit to the retirement fund for active duty military service performed before January 1, 1957. Retirement credit is granted for active duty military service performed after December 31, 1956, and prior to the date of separation on which the annuity is based on the condition that credit is granted for such service until the annuitant becomes eligible for Social Security benefits at age 62. However, an employee first employed in a position under the Civil Service Retirement System before October 1, 1982, will have the option of making a deposit with interest for the post-1956 active duty military service. This would eliminate the reduction made in the civil service annuity at age 62. If the deposit is not made for such service, the annuity would be recomputed at age 62 to eliminate the military service.
If first employed in a position under the Civil Service Retirement System on or after October 1, 1982, the post-1956 military service cannot be used either for determining eligibility to retire or for annuity computation purposes unless a deposit with interest is made to the retirement fund for such military service. Deposits for post-1956 military service must be made before separation from civilian service.
Employees who are receiving military retired pay, with some exceptions, would still be required to waive military retired pay in order to receive credit for such military service towards civil service retirement.
The deposit for active duty military service is 7% of the basic pay earned during such post-1956 service plus interest. Any deposit for military service made after October 1, 1986, or 3 years from the date the employee was first covered by the Civil Service Retirement System, whichever is later, shall include interest compounded annually until the deposit has been paid in full. For interest rates since 1986, see the “Interest Rates” section of this booklet.
If an employee is receiving military retired pay and has paid or made a partial payment for his/ her post-1956 military service and does not waive the military retired pay at the time of retirement, he/she will receive a refund of the military deposit. Otherwise, an employee is only eligible for a refund of the military deposit if they separate and are eligible for a refund of their civil service retirement contributions, or they retire before paying the deposit in full.
If any employee leaves employment before completing 5 years of civilian service, the total amount of deductions will, upon application, be returned with 3% interest to the date of separation. Interest is not paid on deductions that are refunded if civilian service is less than one or more than 5 years. The separation must occur and application be filed at least 31 days prior to the commencing date of any annuity. To apply for a refund of retirement contributions, request form SF-2802 from the Office of Personnel and Benefits.
If an employee is currently married or has been divorced since May 7, 1985, the current spouse and/or former spouse must acknowledge that he/she is aware the employee has applied for the refund.
If the employee has at least 5 years of civilian service the payment of the refund will waive the employee's entitlement to a deferred annuity beginning at age 62. Also, if the employee returns to service in the legislative branch they will automatically be covered by Social Security even if the break in service has been less than 366 days.
Deposits are periods of service when an employee did not contribute to the retirement fund.
If the deposit is for service prior to October 1, 1982 (Pre-10/01/82 Deposit), the period of service is still used for annuity computation purposes even if the deposit is not paid. However, if the pre10/01/82 deposit is not paid at the time of retirement, the annual annuity is reduced by an amount equal to 10% of the deposit due.
The pre-10/01/82 deposit due would be the amount an employee would have contributed during that period of service, based on their salary and withholding percentage at that time, plus interest. Interest is compounded annually at 3% from the mid-point of the deposit period to the date of retirement or if earlier, the date of deposit.
If the deposit is for service after September 30, 1982 (Post-09/30/82 Deposit), the period of service is used to determine retirement eligiblity, but the period of service is used for annuity computation purposes only if the deposit is paid.
The amount of the post-09/30/82 deposit is computed in the same manner as a pre-10/01/82 deposit with the exception of the interest computation. Interest on a post-09/30/82 deposit is compounded annually at 3% from the mid-point of the deposit period to December 31, 1984. Thereafter, interest is compounded annually to the date of retirement or if earlier, to the date of deposit at a market based variable rate determined annually by the U.S. Treasury. The variable rate is applied to the unpaid balance on December 31st each year. For the variable interest rate since 1985, see the “Interest Rates” section of this booklet.
Employees interested in making a deposit should request form SF-2803 from the Office of Personnel and Benefits.
Redeposits are for periods of service when an employee did contribute to the retirement fund and later withdrew those contributions.
If the employee applied for the refund prior to October 1, 1982 (Pre-10/01/82 Redeposit), the redeposit due would be the amount refunded to the employee, plus interest. Interest is compounded annually at 3% from the date of refund to the date of retirement or if earlier, the date of redeposits
If the employee applied for the refund after September 30, 1982 (Post-09/30/82 Redeposit), interest is compounded annually at 3% from the date of refund to December 31, 1984. Thereafter, interest is compounded annually to the date of retirement or if earlier, the date of redeposits at a market based variable rate determined annually by the U.S. Treasury. The variable rate is applied to the unpaid balance on December 31st of each year. For the variable interest rate since 1985, see the “Interest Rate” section of this booklet.
If the employee received a refund for a period of service that ended prior to October 1, 1990, and retires on a nondisability retirement after December 1, 1990, the period of service covered by the refund is still creditable for annuity computation purposes even if the redeposit is not paid. However, the employee will receive an actuarially reduced annuity based on the amount of the redeposit due at the time of retirement and the employees age at that time.
If the employee received a refund for service on or after October 1, 1990, or retires on a disability, then the redeposit would have to be paid or the period of service would not be used in computing the amount of the annuity. Employees interested in making a redeposit should request from SF-2803 from the Office of Personnel and Benefits.
A basic annuity unreduced for age, debts to the fund, or survivor's benefits, is the product of the average salary for the high-three year period and a percentage factor which is based on the length of Federal service. The average salary used is the average salary received during the highest 36 consecutive month period. The period does not have to be continuous nor does it have to be the last 36 months of service.
An employee who has completed at least 5 years of congressional employee or Member service or combination thereof and has deposited or had withheld from his/her salary retirement contributions for the last 5 years of Federal civilian service, is eligible to have the annuity computed under the Congressional Formula.
Effective October 15, 1994, the annuity of a member of the U.S. Capitol Police will be 2½% of the high three average salary for each year of service that does not exceed 20 years, plus 2% of the high three average salary for each year of service in excess of 20 years. This provision will not reduce the percentage earned up to that point.
The Congressional Formula allows 2½% of the high-three average salary for each year of congressional employee or Member service and up to 5 years of active military service. Military service beyond 5 years is treated the same as other non-congressional service.
The general formula allows 1½% of the high-three average salary per year for the first 5 years of service, 1¾% of the high-three average salary per year for the second 5 years service, and 2% of the high-three average salary per year for each additional year of creditable service. An employee who qualifies under the Congressional Formula, but has a combination of congressional employee or Member service and other Federal civilian service, will receive a computation percentage reflecting 2½% of the high-three average salary for each year of congressional and qualifying military service, but less for additional military and other Federal civilian service.
If the employee has 10 years or more of congressional and qualifying military service, additional military and other Federal civilian service is computed at 2% of the high-three average salary per year. If the employee has less than 10 years of congressional and qualifying military service, 1¾% of the high-three average salary per year for each year fewer than 10 years and 2% for all service beyond 10 years. Generally, the basic annuity may not exceed 80% of the high-three average salary. However, when an employee has completed sufficient service to provide 80% of the high-three average salary, deductions withheld after that date (excess contributions) shall, at retirement, be credited first toward debts to the fund created by refunds of contributions and second toward debts created by service not covered by deductions. After all debts have been satisfied, the balance of the excess contributions, if any, will be refunded to the annuitant.
A retiring employee may elect to receive a single life annuity payable only during the annuitant's life, or elect a reduced annuity with a survivor benefit for the surviving spouse, or a reduced annuity with a benefit payable to a person with an insurable interest.
All of the annuity is used as the basis for computation of the survivor's annuity, unless at the time of retirement the employee designates a lesser amount. The full annuity or lesser portion which has been designated is reduced by 2½% of the first $3,600.00 and 10% of the amount exceeding $3,600.00. The survivor's annuity would be 55% of the amount designated as the base and would commence upon the death of the annuitant and terminate upon the survivor's death or remarriage prior to the age of 55. If the annuitant is predeceased by the spouse, the full annuity is restored. If a married employee elects less than a full survivor annuity or no survivor annuity for his/her spouse, then that election requires the spouse's consent.
An employee who is retiring in good health may elect to receive a reduced annuity with a benefit payable to a person with an insurable interest.
The survivor's annuity will be 55% of the reduced rate payable to the annuitant, and the reduction in the annuitant's benefit would be 10% of the annuity, plus 5% of the annuity for each full 5 years the designated person is younger than the employee, but such reduction shall not exceed 40%. If the annuitant is predeceased by the person named, the full annuity is restored.
Annuitants receive an annual cost of living increase (COLA) effective December 1st of each year. The amount of the COLA is based on the percentage increase in the average Consumer Price Index (CPI) during the third quarter of the year in which the COLA is effective over the third quarter of the preceding year.
The first COLA an annuitant receives after retiring is prorated according to the number of months he/she retired prior to December Ist of that year. Example: If an employee retired July 31st, he/she would have been retired 4 months prior to December 1st. Therefore, he/she would receive four-twelfths or one-third of the COLA. Thereafter, he/she would receive the full COLA on December lst of each year.
For examples of annuity computations, refer to the “Appendix” section of this booklet.
An employee who has at least 5 years of federal civilian service and while employed in a position subject to the Civil Service Retirement System becomes disabled for useful and efficient service in his/her current position is eligible to apply fbr disability retirement. The determination of the level of that benefit is the same as for retirements based on age and service except that, (1) the age reduction for employees under age 55 is waived, (2) the requirement that 12 of the last 24 months of service be covered by the retirement system is waived and, (3) a minimum level of benefit is established at the lesser of 40% of the high-three average salary or a percentage resulting from a projection of service to age 60, times the high-three average salary. In order to project service under the Congressional Formula, the employee must be qualified for the Congressional Formula at the time he/she becomes disabled. An employee who is receiving military retired pay does not qualify for the 40% minimum and the disability annuity would be based on actual civilian service. Also, if the employee is age 60 or over the annuity would be based on his/her actual service. An employee would not receive a percentage less than an earned percentage based on actual service.
If an employee dies while employed in a position covered by the Civil Service Retirement System after having completed at least 18 months of Federal civilian service, and is survived by a spouse and/or minor children, immediate survivor annuities are payable to the surviving spouse and/or children. However, the surviving spouse must have been married to the deceased for at least 9 months prior to death or be the parent of a child of the marriage before being eligible for an annuity. Failure to meet this provision has no effect upon the entitlement of any eligible children of the deceased.
The survivor annuity to the spouse would be 55% of what the deceased employee would have been entitled to at the time of death. The current monthly benefit which would be paid to a surviving child is $283.00 per child, however, the benefit could be more if neither parent is living or less if there are more than three eligible children.
The annuity to a surviving spouse would be payable to death or remarriage before age 55. The annuity to a child would terminate upon attainment of age 18 unless incapable of self-support due to physical or mental disability, becoming capable of self-support after age 18, marriage, or death. If the child is a full-time student, the annuity will continue until age 22, death, marriage, or loss of student status, whichever occurs first.
No designation of beneficiary is necessary to provide annuity benefits to surviving spouse or children. Those entitlements are automatic if the employee meets the basic qualifications at the time of death.
If, however, the employee is unmarried or if no entitlement to a survivor annuity exists, a lump sum payment of the employee's contributions to the retirement fund would be paid as follows:
It is not necessary to designate a beneficiary unless an employee wishes to name someone not included above, or in a different order. To designate a beneficiary, request form SF-2808 from the Office of Personnel and Benefits.
An employee may make voluntary contributions to the retirement fund provided any deposit or redeposits they may owe have been paid.
Voluntary contributions are optional payments to the retirement fund and are in addition to an employees normal retirement contribution. Voluntary contributions are paid directly to the Office of Personnel Management, they cannot be payroll deducted, and must be in multiples of $25.00. An employee cannot contribute more than 10% of their gross basic salary received to that date.
Interest on voluntary contributions is a, market based variable rate determinded annually by the U.S. Treasury, and is tax deferred.
An employee may withdraw his/her voluntary contributions at anytime or purchase additional annuity at the time of retirement. If voluntary contributions are withdrawn, the employee may not again make voluntary contributions unless they have had a break in service of four calendar days or more. Employees interested in making voluntary contributions or interested in additional information concerning additional annuity that can be purchased with voluntary contributions, should request form SF-2804 from the Office of Personnel and Benefits.
Payment of post-09/30/82 deposits and post-09/30/82 redeposits have been subject to a market based variable interest rate since January 1, 1985. Also, deposits for post-1956 active duty military service have been subject to this same variable interest rate since October 1, 1986. The interest rates since January 1, 1985, are as follows:
|
Deposits/ReDeposits for Civilian Service |
Post-1956 Military Service |
|
| 1985 |
13.0 |
11.594 |
| 1986 |
11.125 |
9.531 |
| 1987 |
9.0 |
9.531 |
| 1988 |
8.375 |
8.531 |
| 1989 |
9.125 |
8.938 |
| 1990 |
8.75 |
8.844 |
| 1991 |
8.625 |
8.656 |
For the current annual rate contact a Human Resources Specialist in the Office of Personnel and Benefits.
The alternative annuity lump sum payment, was suspended for five years beginning December 1, 1990. During that period only those employees who are involuntarily separated from their position, or who are critically ill will be eligible for the alternative annuity. In both these instances the employee must be retiring on a non-disability retirement.
Under this option the employee receives a lump sum payment of his/her contributions to the retirement fund and a reduced annuity. Any deoosits and/or redeposits are “deemed” as paid. That is, the Office of Personnel Management considers any debts as having been paid and include those deemed payments in computing the reduction in annuity as well as the taxable amount of the lump sum payment.
The reduction in annuity is based on the amount of the employees contributions at the time of retirement plus any deemed deposits and/or redeposits and the employee's age. The reduction in annuity applies only to the employee's annuity during his/her lifetime and does not reduce the survivor annuity to a spouse.
85% to 95% of the lump sum payment, as well as the amounts of any deemed deposits and/or redeposits, are considered taxable income. There is also an additional tax penalty if the employee is under the age of 55 as this would be considered an early withdrawal.
An annuitant who is eligible for a Social Security benefit based on their own covered employment under Social Security may be subject to a reduction in that benefit because they are receiving a Civil Service annuity.
To be exempt from this provision, the annuitant must have 30 or more years of substantial covered employment under Social Security, or have been eligible to receive the Civil Service annuity prior to January 1, 1986. The reduction in the Social Security benefit is lessened if the annuitant has 21 or more years of substantial covered employment uirder Social Security.
An annuitant eligible for an unearned Social Security benefit based on a spouse's or former spouse's covered employment under Social Security will generally be subject to the “Public Pension Offset”.
Under this provision the unearned Social Security benefit is “offset” by an amount equal to two-thirds of the annuitant's Civil Service annuity.
For additional information concerning the “Windfall Elimination Provision” and the “Public Pension Offset”, contact a Human Resources Specialist in the Office of Personnel and Benefits.
As mentioned in the “Introduction” some employees who have previously worked for the Federal government and are now returning to such employment will be covered by Social Security. Those employees may also elect, in addition to the mandatory Social Security coverage, to be covered by the Civil Service Retirement Offset System.
The withholding for the offset system is the difference between the normal withholding for the Civil Service Retirement System (CSRS), currently 7.50% of gross salary, and the Old Age, Survivor, and Disability Insurance (OASDI) portion of Social Security, currently 6.20% of gross salary. The difference, 1.30% of gross salary, is the current withholding for the Civil Service Retirement Offset System. The OASDI withholding is subject to a Maximum Taxable Wage Base (MTWB) each year. When the MTWB is met in a calendar year, the OASDI withholding is discontinued for the rest of that calendar year and the withholding for the offset system increases to the normal CSRS withholding of 7.50% of gross salary for the rest of that year.
The benefits described earlier, including age and service requirements for retirement and annuity computation, also applies to those employees under the Civil Service Retirement Offset System.
The “offset” Applies at age 62 if the annuitant is eligible for Social Security benefits. At that time, the civil service annuity is offset by the amount of the Social Security benefit attributable to the annuitants Federal civilian service after January 1, 1984, which was covered Social Security.
An employee contemplating retirement within the next six months should contact the Office of Personnel and Benefits and speak to one of the Human Resources Specialists. It is important to verify previous civilian and military service in order to establish entitlement. It also facilitates a smoother flow of paperwork when the decision to retire is finally made.
A Human Resources Specialist will also be able to approximate the level of benefit that would be received monthly after retirement and to provide information concerning survivor annuities, life insurance, and health benefits.
An “Application for Immediate Retirement”, (SF-2801) must be filed with the Office of Personnel and Benefits along with the “Election of Post-Retirement Basic Life Insurance Coverage”, (SF-2818) before a claim can be initiated. It is wise to submit those applications four weeks before the anticipated date of separation.
Those employees wishing to pursue disability retirement must also submit the “Superior Officer's Statement” (SF-2824-B), the “Physician's Statement” (SF-2824-C), and “Applicants Statement of Disability” (SF-2824-A), along with the SF-2801.
An employee who has had health and/or life insurance for the five years of service immediately preceding retirement may continue those benefits in retirement. The cost of the health benefits would be the same as the annuitant would pay if still employed (the government continues to make its contribution). The cost of basic and optional life insurance, if carried into retirement, vary depending on factors such as age and the level of coverage continued. For a better understanding of life insurance costs and coverage after retirement refer to the “Federal Employee's Group Life Insurance Booklet” SF-2817A.
The average salary used in the annuity computation is the largest annual rate resulting from averaging an employee's rates of basic pay in effect during that period, over any period of three consecutive years of creditable service. Each rate is weighted by the time that it was in effect.
Example: What is the average salary of a person having salaries of $18,000 for the first year, $20,000 for the second year and $22,000 for the third year?
Total Gross For 3 Years ÷ 3= Average Salary
$18,000 per year for one year...........$18,000 gross
$20,000 per year for one year...........$20,000 gross
$22,000 per year for one year.......... $22,000 gross
The length and combination of types of Federal service determine a percentage factor for the annuity computation. Service may be mixed between the legislative branch and the executive branch.
Example: If he/she has 10 years of legislative service and 15 years in the executive branch, he/she would be allowed:
........................................10 years at 2½% 25.00%
...........................................15 years at 2% 30.00%
If a person has only 5 years of legislative service and 20 years in the executive branch, he/she would be allowed:
5 years at 2½% ....................................12.50%
5 years at 1¾% .....................................8.75%
15 years at 2% ......................................30.00%
If a person has only 3 years of legislative service and 22 years in the executive branch, he/she would be allowed only the general computation for all his/her service.
5 years at 1½% .......................................7.50%
5 years at 1¾% .......................................8.75%
15 years at 2% ........................................30.00%
Military service may also be used in a computation after a person has accumulated at least 5 years of civilian service. If a person has qualified for the legislative computation, he/she then earns a service factor of 2½% for the first 5 years of military service and 2% for all military service over 5 years.
Example: What is the service factor for a person who has 10 years of legislative service and 10 years of military service.
15 years at 2½%................................ 37.50%
5 years at 2%..................................... 10.00%
The annuity of an employee who retires before age 55 (discontinued service) is reduced by one-sixth of one percent for each full month under age 55. When a person retires on disability, regardless of age, there is no age reduction.
The percentage factor by which the basic annuity rate is multiplied to reflect the reduction for age is developed as follows:
Age Reduction = 1 minus [ 660 minus (age in full months + 1) ÷6 multiplied by .01]
Example: What is the annuity of a person with a basic annuity of $20,000 and age 49 years, 11 months, and 11 days.
Age Reduction = 1 minus [ 660 minus (599 + 1) ÷6 multiplied by .01]
Age Reduction = 1 minus .10 = .9
Age Reduction x Basic Annuity = Final Annuity
.9 x 20,000 = $18,000.00
A survivor's benefit is an annuity paid to a spouse of a deceased retired employee. The survivor's annuity is 55% of the base which the employee elects for computation of the survivor's benefit. The reduction in the employee's annuity for election of the benefit is 2½% of the first $3,600 of elected base, and 10% of the amount exceeding $3,600.
Example: If the reduced life rate is $11,100 and the employee elects to use the entire annuity as a base, the survivor's benefit would be found as follows:
Survivor Benefit............................... .55 x Base
Survivor Benefit............................... .55 x $11,100.00
Survivor Benefit............................... $6,105.00
The cost to the annuitant for the benefit would be:
Base =
$11,100.00 minus $3,600.00 = $7,500.00
Reduction =
$3,600 @ 2½.......$90.00
$7,500 @ 10%.....$750.00
Basic Annuity - Reduction = Final Annuity:
$11,100.00 - $840.00 = $10.260.00