Federal Employee Retirement System - FERS

Posted in Finance, Accounting and Economics Terms, Total Reads: 338
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Definition: Federal Employee Retirement System - FERS

FERS is a retirement plan for civil servant in United States. It replaced Civil service retirement plan (CSRP). It was implemented on 6th June 1986. 

 

The three main components of FERS are :

 

-The FERS annuity

-Mandatory participation in Social security

- The Thrift Savings Plan (TSP)

 

This system first came effective in 1986.

 

Just like any other retirement plan FRES is just another retirement plan for civilian employees. The pension is paid in annuities. The eligibility is decided in terms of age, years of service and contribution to the plan. The federal employees hired after 1983 are automatically covered under FERS. This plan is less generous than that of CSRP but still better than most retirement plans.

 

It is calculated as follows:

For employees retiring at or after age 62 with at least 20 years of service, the annuity is 1.1 percent of the high-3 average times the number of years worked.

For employees retiring before age 62, or at or after age 62 with less than 20 years of service, the annuity is 1.0 percent of the high-3 average times the number of years worked.


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