The Civil Service Retirement System
Below is a MRR and PLR article in category Finance -> subcategory Wealth Building.
The Civil Service Retirement System (CSRS)
Overview
The Civil Service Retirement System (CSRS), established in 1920, provided disability, survivor, and retirement benefits for most civilian federal employees until 1987. It was then replaced by the Federal Employees Retirement System (FERS). Despite this change, over two million individuals continue to receive CSRS retirement and survivor benefits monthly.
Financing and Eligibility
CSRS retirement benefits are funded by contributions from both the government and employees. These benefits are determined based on the length of service and the average salary during an employee’s three highest-paid years.
Eligibility Criteria
To qualify for CSRS benefits, employees must meet specific criteria:
- At least five years of credible civilian service.
- Separation from a position covered by CSRS.
- At least one year of service under CSRS within the two years preceding separation.
- Age and service requirements: age 55 with 30 years of service, age 60 with 20 years, or age 62 with five years.
Those who leave service but meet service criteria, except for age, may qualify for a deferred annuity at age 62, provided they don’t withdraw their retirement contributions.
Service and Computation
Eligible service is not limited to positions with retirement deductions. It can include time in roles without deductions, like temporary appointments. Honorable military service can also qualify under certain conditions:
- It must occur before the separation date used for annuity entitlement.
- It can’t be part of military retired pay except for certain disabilities.
- Post-1956 military service requires a deposit to retain credit after age 62.
Special Considerations
Not all service counts equally towards retirement calculation:
- CSRS service for which contributions were refunded is not credited unless redeposited. If the refund occurred before October 1, 1990, the service counts without redeposit, but the annuity will be reduced.
- Non-education service post-October 1, 1982, requires deposits for credit.
- Service before October 1, 1982, is creditable, but annuities reduce by 10% of the owed amount unless deposits are made.
- Military service after December 31, 1956, isn’t credited for hires after September 30, 1982, without a deposit.
- Unused sick leave can increase service time for benefit computation, but not for eligibility.
Sick leave is converted to service days using the OPM Sick Leave Chart, enhancing retirement calculations.
You can find the original non-AI version of this article here: The Civil Service Retirement System.
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