The Civil Service Retirement System (CSRS) was established in 1920 to provide the federal government with means to attract and retain professional workers. Its goal was to provide retirement and disability benefits to civilian workers as well as to extend survivor benefits. Originally designed as a tool for replacing older and sick employees, it has evolved into a system which is employee-oriented, providing full pension benefits and wage insurance protection to those who reach eligibility. Managed by the Office of Personnel Management, it is financed through the contributions of the employees and the government for its retirement fund. Its benefits vary according to the length of service as well as average pay. One feature of this system is the possibility of workers who leave federal service before reaching eligibility to withdraw their contribution to the system. Under the CSRS, there are five categories of benefits, namely: optional, special optional, early optional, discontinued service, and disability.

 

Though there are still many civilian federal workers currently covered under the CSRS, the Federal Employees Retirement System (FERS) was created in 1987 to replace it. This was done in answer to the need of modernizing benefits extended toward federal workers in the country. Workers hired after 1983 are automatic contributors of this system. This system still has the provisions covered under CSRS, though FERS benefits are added to Social Security, with the exemption of workers who are totally and permanently disabled. The FERS was designed to provide enhanced retirement benefits to workers who have relatively low salaries throughout their careers, as CSRS was found to be more advantageous to higher grade federal civilian workers. Employees who leave federal service after just five years are still eligible under this system. FERS is a three-tiered system composed of a defined benefit plan, Social Security and a Thrift Savings Plan, which is likened to a 401k.

There are three categories of benefits under the FERS Basic Benefit Plan. Immediate retirement benefits starts within 30 days of employment separation, following fulfillment of certain age and service requirements. A worker can avail of early retirement benefits under certain involuntary separation cases, like in the case of reorganization or reduction of workforce. Those eligible for deferred retirement benefits are those that leave federal employment before reaching the age and service requirements. To do this, one must work in federal civilian service for at least 5 years and must be at least 62 years old.