How is Your Retirement Annuity Calculated When Switching From CSRS to FERS?

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By on June 11, 2018 in Q&A, Retirement with 0 Comments

Pink piggy bank surrounded by a small scattering of gold coins on a wooden tabletop

Q.  How is a retirement annuity calculated for someone who switched from CSRS to FERS?

A.  Individuals can transfer from CSRS to FERS in an open season (there have only been two of them and the most recent one was almost 20 years ago), or if they leave federal employment and return after a break in service of three days or more.

Transferees (also called TransFERS employees) get both a CSRS annuity (covering the years they worked under CSRS) and a FERS annuity (covering the years they worked under FERS).

Let’s say that an employee left federal service after spending 15 years under CSRS and, upon their return to federal service, elected to be covered under FERS. They retired after having worked 18 years under FERS. This employee has a high-three salary of $75,000.

Years of service Percentage factor Amount
15 years of CSRS 26.25% $19,687.50
18 years of FERS

18% at the 1% factor

19.8% at the 1.1% factor

$13,500

$14,850

Total pension

If FERS time = 1%

If FERS time = 1.1%

$33,187.50

$34,537.50

The CSRS part of the pension would receive CSRS cost-of-living adjustments, while the FERS part would receive FERS cost-of-living adjustments. Survivor benefits would be based strictly on FERS rules. Rules for deposit service, redeposit service and military deposits would be based on when the service took place.

Agencies can request to have John Grobe, or another of Federal Career Experts' qualified instructors, deliver a retirement or transition seminar to their employees. FCE instructors are not financial advisers and will not sell or recommend financial products to class participants. Agency Benefits Officers can contact John Grobe at [email protected] to discuss schedules and costs.

© 2018 John Grobe. All rights reserved. This article may not be reproduced without express written consent from John Grobe.

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About the Author

John Grobe is President of Federal Career Experts, a consulting firm that specializes in federal retirement and career transition issues. He is also affiliated with TSP Safety Net. John retired from federal service after 25 years of progressively more responsible human resources positions. He is the author of Understanding the Federal Retirement Systems and Career Transition: A Guide for Federal Employees, both published by the Federal Management Institute. Federal Career Experts provides pre-retirement seminars for a wide variety of federal agencies.

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