This website is intended to provide you with basic information regarding the Civil Service Retirement System (CSRS). The methods discussed in this website for calculating a retirement annuity are intended to give you a rough estimate. The Benefits Specialist has a computer program that can give you a more accurate calculation; however, again, it is an estimate. Actual retirement annuities are determined by the Office of Personnel Management (OPM).
Employees who would like to read more about the Civil Service Retirement System may check out a more detailed handbook from the OPM website.
For additional information, please contact the Benefits Specialist.
Retirement Eligibility Under CSRS
There are four kinds of retirement provided under the Civil Service Retirement System:
- Discontinued Service--Involuntary
In order to be eligible for retirement, you must have completed at least five full years of civilian service in the System.
You are eligible for optional retirement upon meeting one of the following minimum combinations of age and length of service:
|Minimum Age||Minimum Years of Service||Special Requirements|
Both age and service requirements must be met at the time of separation.
|Minimum Age||Minimum Years of Service||Special Requirements|
|Any Age||5||You must be totally disabled for useful and efficient service.|
You may be eligible for disability retirement if you become totally disabled for useful and efficient service and have completed at least five years of civilian service. Total disability means your inability, because of disease or injury, to perform satisfactorily and efficiently the duties of your position or the duties of a similar position. Considerable medical documentation is required, and decisions for disability retirement are made by the Office of Personnel Management. Disability retirement may also be supplemented by the University's long-term disability insurance.
Discontinued Service Retirement-Involuntary
|Minimum Age||Minimum Years of Service||Special Requirements|
|Any Age||25||You must separate from service due to the elimination of your position or because of a reduction in force and you are not given another reasonable job offer, or you separate because you are unable to fulfill the requirements of high standards of performance (does not include gross misconduct).|
|50||20||Same as Above|
If you involuntarily separate from service at Gallaudet due to the elimination of your position or a reduction in force and you are not given another reasonable job offer, you may be eligible for discontinued service retirement. To be eligible you must have reached the age of 50 and have completed 20 or more years of service, or you may be eligible if you have 25 years of service regardless of your age. The annuity is reduced if you are under the age of 55. Discontinued service retirement may also apply if you are unable to fulfill the requirements of high standards of performance, perhaps due to a deterioration of capabilities or a significant change in the job.
If you have completed five or more years of service, are under age 62 and separate from the University, and leave your funds on deposit with CSRS, you may be eligible for deferred retirement beginning at age 62. The annuity is based on your high three average salary and years of service at the time of separation.
Crediting Civilian and Military Service
When determining your total length of service, all work performed as an employee of the Federal Government and Gallaudet University is considered. If you have been a continuous regular status employee, all years worked will be counted, unless there has been a significant period of leave without pay.
As a general rule, military service in the armed forces of the United States is creditable for retirement purposes if it was active service, terminated under honorable conditions and was performed before separation from a civilian position under the retirement system. An exception to the general rule is that no credit for any military service is given to an employee who is receiving military retired pay unless the retired pay was awarded due to a service-connected disability. An employee who is receiving military retired pay may elect to waive the retired pay and have the military service added to civilian service in computing the annuity.
Any employee first employed under CSRS on or after October 1, 1982 will receive CSRS credit for post-1956 military service at the time of retirement only if a deposit for the military service is made. Individuals who were first employed under CSRS before October 1, 1982 have the option of either (1) making a deposit for post-1956 military service and avoiding a reduction in annuity at age 62; or (2) receiving credit but the annuity will be reduced at age 62.
Employees who performed creditable service before October 1982 for which CSRS deductions were not made (e.g., during a temporary appointment at Gallaudet) may receive credit for this service in computing an annuity without making a deposit to cover this period of service. If a deposit is not made, the annuity is reduced by an amount equal to 10 percent of the amount unpaid plus accrued interest.
Employees are required to make a deposit, with interest, for entire periods of nondeduction service performed on or after October 1, 1982 before the service can be used in the CSRS annuity computation. If a deposit is not made, the service will still be counted toward eligibility (e.g., age 55 and 30 years of service); however, no credit will be given in determining the amount of the annuity.
If you previously worked for Gallaudet or the Federal government and received a refund of your CSRS contributions, you may redeposit the funds, with interest, to obtain credit for the years of service. If the refund was for service ending before October 1, 1990, you may choose not to redeposit the funds and take an annuity calculated with a reduction.
If you need to make a deposit or redeposit, you should contact the Benefits Specialist at least one year before your retirement date or earlier to arrange repayment. It is recommended, however, that you start making payments or pay the amount in full as early as possible before your retirement since interest accrues on the unpaid amount.
Types of Annuities
There are three types of annuities:
- Annuity without a survivor benefit
- Annuity with a survivor benefit to a spouse or former spouse
- Annuity with a survivor benefit to a named person having an insurable interest
You can choose which type of annuity you want; however, if you are married, you are automatically granted the annuity with a full survivor benefit unless your spouse agrees in writing (notarized) to an annuity without a survivor benefit or to a reduced benefit. A survivor annuity is important if you intend for your spouse to have health insurance coverage following your death.
An annuity without a survivor benefit enables you to receive your full retirement benefit for the duration of your lifetime only.
An annuity with a survivor benefit to a spouse or former spouse consists of a reduced annuity to you as the retiring employee and a survivor annuity to your spouse. The survivor benefit is paid beginning the day after your death and continues until your spouse remarries (before age 55) or dies. You may choose all or any portion of your annuity as a base for figuring the amount of the survivor benefit. Your surviving spouse will normally receive 55 percent of the amount you choose as a base. Your annuity is reduced by 2.5 percent of the first $3,600 and 10 percent of the remainder of the amount you elect as the base.
An annuity with a survivor benefit to a named person having an insurable interest means that an unmarried retiring employee can name an individual to receive a survivor benefit. The named person is, however, required to have a reasonable expectation to receive some kind of financial benefit from the continuance of your life. Generally, only a close relative might have this kind of insurable interest. If a person other than a near relative is named, proof of insurable interest may be required. Your annuity is reduced by a percentage amount based on the difference between your age and the age of the person you name. Other conditions are similar to those described above.
The amount of your basic retirement annuity depends primarily on your length of service and your "high three" average base salary. The amount of your basic retirement annuity is reduced if you fail to make a redeposit of retirement funds that have been withdrawn or if you have not made a deposit for nondeduction service. It is reduced if your retirement is based on discontinued service and you are under the age of 55. The basic annuity is also reduced if you elect a survivor benefit and/or for Federal health and life insurance premiums.
All periods of creditable service are totaled into years and months. Unused sick leave accrued under a formal accrual system is also counted as creditable service. Unused sick leave may not be used on the "front end" in order to leave service earlier than the eligibility date.
Your "high three" average salary is obtained by averaging the highest rates of base pay in effect during any three consecutive years of service. For example, if you worked at Gallaudet for 30 years, and your highest base rates of pay during three consecutive years were $30,000, $32,000, and $34,000, your average "high three" would be $32,000. (The actual computation is much more complex.)
To arrive at a rough estimate of your basic, unreduced annual annuity for optional, discontinued service, and deferred retirement, you may use the following worksheet:
Again this is a rough calculation; the actual computation is more complex and takes months worked into consideration. Generally, an annuity cannot exceed 80 percent of the high-three average pay.
Unless your basic annuity would be higher, a disability annuity is, in general, the lesser of the following (which is the guaranteed minimum):
40 percent of your "high three" average pay
The amount obtained using the formula above after increasing actual creditable service by the time remaining between the date of separation and the date you become age 60.
For example, assuming an employee has 15 years of service, is age 45, has a high three average of $35,000, and becomes totally disabled:
40% of high three: $14,000
Actual Service: 15 years
Years to Age 60: 15 years (60 minus 45)
Total: 30 years
Approximate annuity at age 60 using the formula: $19,688
The employee would receive the lesser of the two, or $14,000 per year.
Again, remember that a disability retirement annuity may be supplemented by the University's long-term disability insurance in order to provide you with income of approximately 60 percent of your base salary until age 65.
Selecting a Date to Retire
The formulas and examples above are based on full years of service; however, you do not have to work a full year in order to receive credit for time worked in that year. For example, if you were hired in August, you do not need to wait until August to retire. If you retire earlier than August, you will receive credit for months instead of the full year. However, keep in mind that 30 days is considered a month; anything less does not count.
For example, an employee hired in August might prefer to retire in May. Assuming his or her average high three salary is $35,000 and the employee would have 25 years of service in August, the annuity difference is as follows:
Unreduced Annuity in September - Unreduced Annuity in May
Which day of the month you retire may also be an important consideration. As a general rule, your retirement becomes effective on the first day of the following month. However, if you work three days or less in the month you retire, your annuity commences on the day after separation. For example, if you retire on August 1, your retirement annuity will become effective on August 2; or if you retire on August 3, your annuity will become effective on August 4. If you wait until August 4 or any day of the month thereafter, your retirement annuity will become effective on September 1.
Applying for a Refund or an Annuity
If you terminate from the University, you may apply for a refund of the funds you have contributed to the retirement system. To apply, you must complete an "Application for Withdrawal of Retirement Funds" which is available here. You may also elect to leave your funds on deposit if you plan to have future service under a Federal retirement system or wish to apply for a deferred retirement at age 62.
If you are retiring from the University under the optional or discontinued service provisions, you should contact the Benefits Specialist approximately 30 days before your scheduled retirement date. The Benefits Specialist will give you the appropriate forms for an annuity application and procedures and forms for converting your health insurance, and life insurance if you are covered under the Federal Employees Group Life Insurance plan (FEGLI). The Benefits Specialist can also give you a relatively close estimate of your retirement annuity.
To apply for retirement, you should contact the Benefits Specialist to set up a meeting and complete the paperwork. As soon as the HR Office receives your "Removal Personnel Action Form" from your department, and your final paycheck has been processed, the HR Office will submit your application along with an "Individual Retirement Record" to OPM for processing.
If you need to apply for disability retirement, you will be required to provide medical documentation and a statement from your supervisor attesting that your condition prevents you from performing useful and efficient service. The University will also have to confirm that no reasonable accommodation or transfer can be made. If disability retirement is approved, you may be asked to provide periodic medical certifications, up until the age of 60, to confirm that the disabling condition continues to exist. The Benefits Specialist can provide you with the appropriate forms.
Thrift Savings Plan
If you participate in the Thrift Savings Plan, you are eligible to make withdrawals at the time of your retirement. Withdrawals may be in the form of a life annuity, a single payment, or a series of monthly payments. You can ask to have your payments begin as soon as possible or you can specify a future date. You cannot, however, choose a future date that is later than March of the year following the year in which you turn 70½.. Your TSP may also be transferred to an Individual Retirement Account (IRA) or other eligible retirement plan. The Thrift Savings Plan Service Office can answer questions about your account and send you withdrawal materials. For more information, please visit www.tsp.gov.
Employees who retire under CSRS may also be eligible for full or reduced Social Security benefits if they have sufficient credits (quarters). You may request an estimated personal earnings and benefits statement from the Social Security Administration. For more information, please visit www.ssa.gov.
Health, Life, and Dental Insurance Benefits
Following retirement, your Federal Employees Health Insurance (FEHB) may be continued under the group plan as long as you were covered for at least the last five consecutive years prior to retirement. Your portion of the health benefits premiums will be deducted from your annuity check on a monthly basis. You must have elected a survivor annuity and be enrolled in self and family coverage in order for your spouse to be eligible for continued health insurance at the time of your death. Federal Employees Group Life Insurance (FEGLI) also continues (with the exception of accidental death/dismemberment) as long as you were enrolled for at least the last five consecutive years prior to your retirement. FEGLI optional life insurance coverage may also continue. Following COBRA provisions, dental insurance may continue for up to 18 months following separation, but you must pay 102 percent of the total monthly premium.
Employees who apply for a deferred annuity are not eligible for FEHB or FEGLI coverage.
Retirees who are receiving an annuity may be reemployed at Gallaudet; however, annuity payments and salaries may not be combined. The salaries of reemployed annuitants who retired voluntarily (i.e., excluding discontinued service and disability) will be offset by the amount of the annuity.
Please check OPM - Retirement Services for additional information.
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