The Civil Service Retirement System

The Civil Service Retirement System
By Carl Graeber

The Civil Service Retirement System (CSRS) began in 1920 and
has given disability, survivor and retirement benefits for the
majority of civilian employees in the Federal government until
1987 when the new Federal Employees Retirement System (FERS) was
created. Nevertheless, over two million people carry on
receiving Civil Service Retirement System retirement and
survivor benefits every month.

Retirement benefits are presently financed by both Government
and employee contributions to the retirement fund, and the
benefits are provided based on the duration of service and the
average pay over the highest three years of pay.

What are the eligibility requirements for Civil Service
Retirement System benefits? An employee is qualified to retire
voluntarily if the following provisions are met: at least five
years of creditable civilian service; is separated from a
position subject to Civil Service Retirement System coverage; is
covered by Civil Service Retirement System for at least one year
within the two-year period immediately preceding the separation;
and meets age/service combinations of age 55 with 30 years of
service, or age 60 with 20 years of service, or age 62 with five
years of service.

For employees who separate from service and have met the
criteria except for the age/service combination may be permitted
to a deferred annuity at age sixty-two. To be qualified, the
employee must not take a refund of retirement deductions upon
separation.

In determining the service which may be used for an employee’s
eligibility for retirement under the Civil Service Retirement
System, is not restricted to service in positions subject to
CSRS retirement deductions, it may also comprise service where
the pay of the employee is not subject to retirement deductions,
such as under a temporary appointment.

Honorable active military service may also be qualified,
subject to conditions: it was

executed before the separation
date upon which is the basis for entitlement to annuity; it is
not comprised in computation of military retired pay except for
certain service-connected disability requirements; if the
military service was executed after December 31, 1956, some
employees will have to create a deposit for the service to
receive firstly or for other employees, to retain credit after
the age of sixty-two.

Although the service used in determining an employee’s
eligibility for retirement is typically the same as creditable
service for computation purposes, there are some exceptions:
periods of CSRS service refunded, will not be creditable unless
a redeposit is made; if the refunded service was executed before
October 1, 1990, it will be qualified even if no redeposit is
made but the annuity will be actuarially decreased;
non-education service is made on or October 1, 1982, is not
qualified if a deposit has not been made.

October 1, 1982 prior service is creditable by the annuity will
be decreased by ten percent of amount owed; active military
service executed after December 31, 1956 is not creditable for
employees first employed in a covered position after September
30, 1982 except if a military deposit for the service is made;
and unused sick leave is commendable in computing benefits.

Sick leave is changed into days or months of service using the
Sick Leave Chart in the OPM operating manual, but it can never
be used for eligibility.

About the Author: Do you want to start planning your
retirement? Are you unsure on how to proceed? Then the tips on
the authors website at
http://www.best-retirement-planning-tips.com will be helpful to
you when setting up your retirement plan.

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