Civil Service Retirement System (CSRS)

Posted in Finance, Accounting and Economics Terms, Total Reads: 235

Definition: Civil Service Retirement System (CSRS)

Civil Service Retirement System (CSRS) or Federal Employee Retirement System (FERS) is defined under Civil Service Retirement Act, 1920. CSRS is basically a benefit and it defines a contributory retirement system. It is for Federal employees. The employees who are covered under CSRS are the ones who pay for the annuities that they receive after retirement. They generally contribute 7% to 8% of their pay to CSRS. However, if they wish to increase the amount of annuity then they can increase the contribution upto 10% of their basic pay to the voluntary contribution account. However employees covered under CSRS are not required to pay disability, survivor or Social Security Survivor tax. The basic annuity that is given to an employee is calculated using service period of the Federal employee and also the high three average salaries. Also, a credit is given to the employee for unused sick leave.

Employees may also invest under Thrift Savings Plan (TSP) depending upon their future requirements. The contribution made by employees is tax deferred but there is no contribution done by Government.

The eligibility of an employee to get covered under CSRS depends upon the age of the employee, period of the service that is creditable and also upon several special environments. Deferred retirement benefits are also available for the Federal employees who leave their service before the required age or before fulfilling service requirements that needs to be satisfied in order to get immediate benefit of retirement.

The various types of retirement such as disability, early retirement, voluntary retirement and deferred retirement are also covered under CSRS scheme. Each has minimal age requirement and length of service period which should be fulfilled.

CSRS also covers deceased employees such as unmarried children who were dependent upon a federal employee who died, and then in that case Government provides them monthly benefits. However, the amount paid depends upon various situations



Looking for Similar Definitions & Concepts, Search Business Concepts

Similar Definitions from same Category: