The Federal employees retirement system


Federal Employee Retirement

The Federal Employees Retirement System is a defined benefit plan which provides lifetime monthly payments to eligible employees after they retire. It was established in the Internal Revenue Code of 1954, as amended. The Federal Employees Retirement System is a defined benefit plan which provides lifetime monthly payments to eligible employees after they retire. It was established in the Internal Revenue Code of 1954, as amended.

Who administers FERS?

A group of people standing in a room

The Office of Personnel Management (OPM) administers pensions for all three components of the retirement system: Civil Service Retirement System (CSRS), Federal Employees’ Retirement System (FERS), and Thrift Savings Plan (TSP). OPM also carries out functions under such other federal employee retirement systems as civil service annuities and law enforcement officers benefits.

What are my options when I retire from federal service?

A man wearing a suit and tie

You have two basic options: annuity and lump sum.

Annuity option- you will receive monthly payments from OPM for the rest of your life, with cost-of-living adjustments (COLAs) included in most cases. You will pay income tax on these benefits if your combined income is more than $32,000 per year ($44,000 for married couples).

If you select an immediate annuity, you must be at least 57 years old and have at least 5 years of service credit. If you do not satisfy these age and service requirements when your employment terminates, then you may select a deferred annuity that makes payments to begin later; there is no minimum age required for this selection. For additional information about retirement benefits, see the OPM website.

The lump-sum option-you will receive a one-time payment for your lifetime, based on your age at retirement and years of service credit. If you are at least 50 years old with 20 or more years of government service, then this amount is increased by about 25%. You can choose to have your lump sum paid in a series of instalment payments over periods up to five years.

What are my TSP withdrawal options?

When you leave federal service, there are tax rules that determine whether you withdraw your account balance as a single sum or over multiple instalments. For additional information about TSP withdrawal options, please see the Thrift Savings Plan website.

What is the Thrift Savings Plan?

The TSP is a type of retirement savings plan available to federal employees who want to set aside money for retirement. You can contribute part or all of your pay, with government matching funds if you are contributing at least 5% of your pay.

If I am 55 years old with 20 years of service, what benefits will I receive upon my death? What survivors’ benefits may be payable to my family?

There is no lump-sum payment for this situation. The survivor benefit consists only of an annuity payable to the eligible survivors named on an application submitted by the retired person before his/her death. A one-time survivor annuity option (SOA) provides up to 50% of the primary insurance amount (PIA) for a spouse to begin as early as age 55 or as late as 60. For additional information about survivor and retirement benefits, see the OPM website.

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