CSRS vs. FERS | What is the Difference between CSRS and FERS

The Federal Employees Retirement System and the Civil Service Retirement System are the two retirement systems used by the US government. At all levels of government, retirement plans are common. Employees and their employers contribute money to their retirement funds, and retirees get monthly payments from the system.

The age-old struggle of retirement systems continues. Which is better, the CSRS or the FERS? The answer to that question would be precious if every employee could choose which to be in during an annual open season. However, this is not the case.

There were two open seasons years ago when CSRS employees could move to FERS—but not the other way around—but there hasn’t been one since, and there isn’t likely to be one again.

So the best you can do is sit, cross your legs, and consider some similarities and differences between CSRS and FERS. The qualities that are most important to you will determine which one would be preferable to you.

What is CSRS?

The Civil Service Retirement System (CSRS) was established in 1920 to provide government employees with retirement benefits equivalent to those offered in the private sector. Civil workers who worked for the government for a long time were eligible for a significant lifetime pension based on their age and length of service.

CSRS existed before social security was established as the default retirement benefit for all Americans. Because of the annuity they received under CSRS, government employees were ineligible for benefits when the Social Security Administration was established in 1935.

This changed when President Ronald Reagan established the Federal Employees Retirement System in 1986. This brand-new retirement plan was supposed to cover all government workers employed after 1983.

These employees were also eligible for social security payments and a matching contribution to a federal Thrift Savings Plan, despite the benefits being less than those CSRS (TSP) granted.

Before 1983, all civil servants were offered the option of converting to the FERS system. The only employees still covered by CSRS are those who refused to transition.

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Types of Retirement Under CSRS

For retired employees, the CSRS offers five types of benefits: disability, optional, ceased service, and deferred retirement. Each has its own set of requirements, but employees are only eligible for benefits after five years of full-time employment.

#1. Optional Retirement

Civil servants who achieve specified age or service duration requirements are eligible for optional retirement. There are three distinct combinations to choose from.

An employee can retire at 55 if they have worked in public service for at least thirty years, whereas a 60-year-old can retire after only 20 years. The minimum period of service is five years, and after that, you can retire at the age of 62.

#2. Disability Retirement

Federal employees who become disabled in a way that prevents them from continuing to work are eligible for disability retirement. These employees must also meet stringent medical proof requirements to show incapacity besides the five-year minimum.

According to FedWeek, the number of federal employees is covered by CSRS. The rest is covered under the new FERS plan.

#3. Discontinued Service Retirement-Involuntary

Individuals whose employment is ended because of eliminating redundancy of their positions.

Employees must have served for at least 25 years to be eligible, or only 20 years if they are at least 50. Furthermore, their dismissal is unrelated to misbehavior or criminality.

#4. Early Optional Retirement

Employees whose agency undergoes a large restructuring or decrease in force are eligible for this benefit. After 25 years of service, or 20 years if the person is over 50, this is available. If an employee retires before 50, their annuity is lowered.

#5. Special Provision Retirement

Only select specialized jobs, such as Air Traffic Controllers, Capitol Police, or nuclear materials couriers, are eligible for this form of retirement.

Employees in these fields are eligible for retirement after they reach the age of 50 and have worked for at least twenty years. Air traffic controllers can retire sooner if they have worked for at least 25 years.

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What Is the Federal Employees Retirement System (FERS)?

The Federal Employees Retirement System (FERS) is a retirement plan for federal civilian employees in the United States. FERS is a defined-benefit pension plan that replaced the Civil Service Retirement System in 1987. (CSRS).

Employees are immediately registered in the program and eligible for three retirement benefits types. The age of a worker and the number of years he or she has worked decide whether he or she is eligible for benefits. Benefits are divided into four categories, which are discussed further below.

Federal government employees, like large firms, can save money through retirement savings programs through the Federal Employees Retirement System. The program began in 1987 and applied to all federal employees employed after December 31, 1983.

The FERS is a defined-benefit plan, which implies that an employee’s retirement benefits are based on his or her pay and years of service. The benefits are structured as annuities and are paid out monthly to retired government employees beginning one month after they leave duty. Age, years of service, and payments to the plan determine eligibility and payment amounts.

Social Security benefits, a basic benefit plan for which the employee is charged a nominal amount, and the Thrift Savings Plan (TSP), which comprises automatic government contributions, voluntary employee contributions, and matching government contributions, are used to pay out the program’s benefits.

When benefits are given out, the system divides them into four types. They are:

#1. Immediate

This compensation starts 30 days after you stop working. You can retire immediately if you are 62 years old and have five years of service or 60 years old and have 20 years of service.

If you wait until you reach your minimum retirement age and have between 10 and 30 years of service, your benefit will decrease by 5% each year until you reach the age of 62. Those who have served for 20 years only have to wait until 60 to receive the full benefit.

#2. Early

This option is accessible in some circumstances of involuntary and voluntary separations during a substantial reorganization or workforce reduction.

#3. Deferred

The number of years of service you have under your belt determines your eligibility for this choice. You must have been with the army for at least five years. If you achieve the minimum retirement age but aren’t yet 62, it decreases your benefit by 5%. You can only delay payments if you have 20 years of service.

#4. Disability

This benefit option plan compensates employees who become handicapped while working in a FERS-eligible position due to a disease or injury for their useful and efficient service. The incapacity must endure for at least a year. The hiring agency must certify that it cannot accommodate your situation and that you have been considered for other internal positions.


The Federal Employee Retirement System (FERS) only requires participants to be vested after five years of employment. So, even if they aren’t retired, they can start receiving benefits from the program if they stop working for the government.

To replace CSRS, the Federal Employees Retirement System (FERS) was established in 1987. All federal employees employed after 1983 were automatically enrolled in the new plan, with those hired before 1983 having the opportunity to switch to FERS voluntarily.

Today, CSRS primarily serves the limited number of federal employees hired before 1983 who elected not to participate in the Federal Employees Retirement System (FERS).

The fundamental difference between CSRS and FERS is that CSRS provides a greater benefit but deducts a larger portion of the employee’s compensation. Employees under the Civil Service Retirement System contribute 7% of their earnings to the Civil Service Retirement Fund, whereas FERS employees pay up to 4.4 percent, depending on their employment date.

Although the FERS payout is less generous than the CSRS benefit, these employees receive a 5% matching payment to their pension. The major differences are-

One Component Vs. Three Components

The Civil Service Retirement System (CSRS) is a traditional pension plan comparable to those established at the same time by labor organizations and large corporations. Employees are required to donate a percentage of their pay.

When they retire, they will get an annuity to maintain a similar quality of living as they had throughout their working years.

Even without Social Security or retirement funds, the CSRS payment suffices to afford a decent lifestyle, provided the employee has at least 30 years of federal service. It is inflation-adjusted.

A FERS employee’s pension is modest and isn’t designed to finance his retirement fully. In addition, he receives a retirement savings plan and Social Security.

Cost of living benefits

Cost-of-living adjustments were provided to older employees covered by CSRS from the start. The FERS change is more limited because it is unavailable until the employee turns 62.

The COLA is the same as what military retirees and Social Security beneficiaries receive.

Disability Benefits

It’s widely assumed that the FERS plan has the upper hand here, at least for employees who have served for at least 18 months. Benefits are slightly higher, although CSRS employees are often ineligible for Social Security disability benefits because of a lack of Social Security credits.

Cost of Living Adjustments

Because the thrift savings plan is like a 401(k), a FERS employee who doesn’t properly manage the plan may be short on retirement funds. Because of the TSP, FERS employees have more power and freedom over their retirement planning.

Although CSRS employees have better pension benefits, FERS employees frequently retire with twice as much money.

Survivor Benefits

Survivor benefits of 55 percent of the initial unreduced CSRS payment are available to CSRS employees’ survivors. After a ten percent decline, it lowers to 50 percent for FERS survivors.

FERS survivors are likely to get Social Security survivor payments and inherit any residual funds in the thrift savings schemes.

The Size of Annuity Payments

FERS has three components, each of which provides less money to retirees. CSRS retirees’ annuity payout is intended to be their sole source of income, whereas FERS retirees receive an annuity, a thrift savings plan, and Social Security payments.

Rules for Thrift Savings Plans

The federal government matches one percent of each FERS employee’s contribution to his thrift savings account. FERS employees can contribute more, and the US government will match up to a specific proportion of their contributions.

Employees on the CSRS can join the thrift savings plan, but they will not get any additional funds from the federal government if they do. This 1% contributes to the government’s goal of providing FERS employees comparable retirement to CSRS employees.

After three years of service, it becomes vested and does not close automatically upon retirement, requiring a money transfer.

Deduction of salaries

The Amount Deducted from Salaries CSRS employees pay between 7% and 9% of their salaries into the system.

It should be noted, however, that when Social Security is incorporated into the total contribution, FERS employees contribute a comparable amount. Employees hired before or during 2012 contribute 8%, while those hired after 2012 contribute 3.1%.

Retirement eligibility

The tax rate on Social Security, commonly known as OASDI (Old Age, Survivors, and Disability Insurance), is 5.3 percent. If FERS employees choose to use the thrift savings plan, they can contribute more to the plan.

Retirement age

Employees on the Civil Service Retirement System (CSRS) can retire as early as 55 years old, whereas those on the Federal Employees Retirement System (FERS) who started their employment in 1970 or later must wait until they are 57 years old. Older FERS employees may retire a little sooner, depending on when they started their professions.

Age requirements

If your agency offers you an early retirement opportunity, both CSRS and FERS contain a provision allowing you to retire sooner than usual. Both have the same eligibility requirements: age 50 with 20 years of service or any age with 25.

However, CSRS employees’ annuities will be decreased by 2% each year they are under 55, although FERS personnel would not be penalized for their age.

Thrift Saving Plan

The Thrift Savings Plan is the government’s equivalent of the 401(k) plan (k). It allows you to accumulate a retirement account by investing in various funds. And it’s here that FERS workers get their just desserts.

They are paid by the government, whereas CSRS personnel are not. This is how it works. Whether or not you contribute, the government automatically contributes 1% of your base income if you are a FERS employee.

If you do, your contributions will be matched dollar for the first 3%, then 50 cents on the dollar for the remaining 2%.

Frequently Asked Questions

What is the Average CSRS Benefit?

According to Fedweek, the average CSRS benefit is around $4,000 per month or $48,000 per year. The average annual benefit is $42,000.

What is the Duty of the Civil Service Retirement System (CSRS)?

The Civil Service Retirement System (CSRS) provides a lifetime annuity, which means payments will continue for as long as the beneficiary lives. The beneficiary’s heirs may be eligible for a lump-sum payment equal to the unpaid portion of their pension after they die.

How many percent of federal employees were registered in CSRS as of 2023

Approximately 4% of federal employees were registered in CSRS as of 2023, equating to about 100,000 workers. Almost the majority of them are over 55 years old. As more government employees retire, this number will continue to fall.

How much of the employee’s unreduced annual payment does the Civil Service Retirement System (CSRS) Pay Surviving Spouse?

The Civil Service Retirement System (CSRS) pays the surviving spouse or child survivor benefits equal to 55 percent of the employee’s unreduced annual payment. If the heirs are not qualified for survivor’s benefits, they may be entitled to a lump-sum payment equal to the employee’s total CSRS retirement plan contributions.

Do Federal Employees Pay gross income into Medicare?

Yes. Whether enrolled in CSRS or FERS, all federal employees pay 1.45% of their gross income into Medicare. As a result, they, like any other retiree, are eligible for Medicare benefits.


It’s no longer essential to weigh all these pros and cons now that you can no longer elect CSRS benefits. It can help you plan your retirement more effectively; however, if you’re passing 30 years of service but not ready to retire quite yet.



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