The Federal Employee Retirement System (FERS)

The Federal Employee Retirement System, or FERS, is a retirement plan offered to employees working in different agencies and departments of the U. S. Federal government. This program was formulated to provide financial support to all beneficiaries and their qualified dependents at the time of their retirement, disability, or death.

Components of FERS

Recipients of the Federal Employee Retirement System receive their benefits from three various components, namely:

  • Basic Benefit Plan - Employees paid their contribution for this plan every payroll schedule during their civil service employment. For individuals to become eligible in this program, they must be employed in any federal government agency for a minimum of 5 years of creditable service. As beneficiary of this plan, the employee can receive retirement benefits, disability benefits, special retirement supplement benefits (for special cases), and survivors benefits for qualified dependents.
  • Social Security Benefits  - The beneficiary gets Social Security benefits from the Social Security taxes he/she paid each year through his employment payroll. The types of benefits received are retirement benefits, disability benefits (if the beneficiary becomes disabled while employed), and survivors benefits for eligible dependents if and when the beneficiary dies.
  • Thrift Savings Plan (TSP) - This plan is the FERS' counterpart of 401(k) retirement plan offered by private companies to their employees. TSP is a tax-deferred savings and investment plan wherein workers are given the right to decide the amount they want to deposit in their thrift account every pay day, as well as choose investment options in how they want their money invested. The employee can only withdraw the funds after he/she leaves the federal job. The employee can collect the account in a single or multiple payments, or buy a life annuity through TSP.

Retirement Eligibility and Categories

The Federal Employee Retirement System determines the eligibility of a worker using the total number of creditable years he/she worked in the Federal government and the age the employee retires. Typically, for a recipient to avail of retirement benefits, the recipient's age should be covered in the Minimum Retirement Age rule set by FERS.

There are four types of retirement benefits a federal employee may apply for.  They are:

Immediate retirement—benefits are received after 30 days he/she left the Federal service. The employee must have at least worked 5 creditable years in the government and his/her age is 62.

Early retirement—is offered to workers who voluntarily or involuntarily separate from work because of certain administrative reasons affecting the federal agency they are working in. To qualify for early retirement, an employee must have worked a minimum of 20 years at the age of 50.

Deferred retirement
—is for people who resigned from their federal civilian job before their retirement age, but had worked at least 5 years of creditable service in the government. The payment of retirement benefits are postponed until the employee turns 62 years old.

Disability retirement—is given to individuals who become mentally or physically incapacitated while working in an environment under FERS. There is no limit for age as long as he/she was employed in the government for a minimum of 18 months.

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