Page 74 - The Informed Fed--Hearn (edited 10.29.20)

CHAPTER SEVEN

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Retirement Systems Explained

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I will use this chapter to discuss the basics of the three retirement
systems (CSRS, Civil Service Off-Set and FERS). To start, let’s cover the
two most common questions I hear from employees about federal
retirement:
1) Should I buy back my military time?
2) What is the number in the lower right-hand corner of my
paystub? (postal service employee)
Civil Service (CSRS) employees are those hired prior to January 1,
1984, or who had at least 5 years of CSRS service and returned to work
between the years of 1984 and 1987. A Civil Service employee could fully
retire at age 55 with at least 30 years of service. If the employee worked
past the 30-year minimum, he/she could earn a higher annuity (pension)
in retirement. With 40 years of service, CSRS employees could earn as
much as 80% of their average high three consecutive years of base pay
as a pension. The CSRS employee pays 7% of his/her income toward
CSRS retirement. CSRS employees did not pay into Social Security.
Those employees who earned their 40 quarters of Social Security credits
prior to their federal service or by working a second job could earn a
Social Security check on top of their pension checks. However, because
of the Windfall Elimination Provision, their Social Security checks would
be cut in half. The government viewed a CSRS employee as double

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