what is Employee Retirement System (FERS)

The Federal Employees Retirement System (FERS) is a comprehensive retirement plan for federal employees in the executive, judicial, and legislative branches, offering benefits from three sources: the Basic Benefit Plan, Social Security, and the Thrift Savings Plan (TSP). Here's a detailed analysis of FERS: 1. **Coverage and Eligibility**: FERS covers all federal employees hired after January 1, 1984, and provides retirement benefits to eligible employees upon retirement. The system replaced the old Civil Service Retirement System (CSRS) in 1986. 2. **Components of FERS Benefits**: - **Basic Benefit Plan**: This is a defined benefit plan that provides a guaranteed income stream for life. The annuity received upon retirement is an incentive for workers to continue their service until eligible. - **Social Security**: Employees covered by FERS are also covered by Social Security, which provides additional retirement benefits. Social Security contributions are mandatory for all employees, with the agency matching the contribution. - **Thrift Savings Plan (TSP)**: This is a defined contribution plan that allows employees to save for retirement on a pre-tax basis. The TSP offers a variety of investment options to help employees maximize their retirement savings. 3. **Retirement Options**: FERS employees have several retirement options, including immediate retirement upon meeting the age and service requirements, or deferred retirement with reduced benefits after reaching the Minimum Retirement Age (MRA) and accruing at least 10 years of service. 4. **Contributions**: Both the employee and the federal government contribute to the FERS retirement system. The employee contributes a portion of their salary, while the federal government matches a portion of the contribution, depending on the service category. 5. **Redeployment and Transfers**: FERS allows for redeployment of retirement contributions under certain conditions, such as when an employee transfers from one federal agency to another. Additionally, the Federal Employee Retirement System - Revised Annuity Employees (FERS-RAE) and the Federal Employees Retirement System - Further Revised Annuity Employees (FERS-FRAE) were established to increase retirement contributions for new employees hired after specific dates. 6. **Disability, Early, and Involuntary Retirement**: FERS covers disability retirement, early retirement due to a reduction in force or discontinued service because of involuntary separation, and voluntary retirement. Deferred retirement is also an option for former federal employees covered by FERS. In conclusion, the Federal Employees Retirement System (FERS) is a robust retirement plan that provides federal employees with comprehensive benefits from multiple sources. It encourages long-term service and retirement planning, offering flexibility and security to federal employees throughout their careers.