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TABLE OF CONTENTS
Welcome to the FERS Transfer Model. The objective of this program is NOT to calculate retirement benefits, but to provide you, the user, with an overall indication of which plan, the Federal Employees Retirement System (FERS) or the Civil Service Retirement System (CSRS, including CSRS Offset), may provide better monetary benefits. Please note that if you are planning on retiring within the next five years you should contact your benefits counselor.
Before using this program you will need to have the information shown on the check list below available to you. Detailed explanations of these items, as well as where to obtain them, will be explained in the sections that follow. If more information on any of the specific items covered is needed, please consult the FERS Transfer Handbook, and/or your servicing personnel office.
CHECK LIST
The following sections will walk you through the FERS Transfer Model. After reviewing this Users Guide you will be able to complete the calculation program to compare your projected FERS and CSRS benefits.
MAIN MENU - USING THE CSRS TO FERS CALCULATION PROGRAM
When using the FERS Transfer Model, you must complete each of the seven steps in the order shown on the screen in the Main Menu. All areas shown in white on the following screens must be filled in for your benefits to calculate properly. To move from one field to another on the screens, use either the Tab key or mouse to click on the fields. When entering dates, use the MM/DD/YYYY format.
Note the menu beginning with "Open" underneath the "CSRS to FERS" title bar in the Main Menu. These features will be useful to you if you plan to create more than one scenario for comparison purposes, or if you wish to edit a previously completed scenario.
"Open" - This feature allows you to open a previously saved scenario. Your computer will prompt you to locate the directory into which the file was saved and then you may select it. All scenarios are saved with a ".opm" extension.
"Save" - The "Save" feature allows you to save your current scenario. If you save a scenario you will then be able to retrieve it at a later date and edit or further complete the information. When you press the "Save" button for the first time during your current scenario, your computer will prompt you to choose a directory in which to save this file. After you save your current scenario for the first time any subsequent saves will save the file to the same directory. All of the scenarios you save will be given a ".opm" extension.
"Save As" - The "Save As" feature allows you to save an existing scenario under a new name. See information in the above paragraph on saving your scenarios.
"New" - The "New" feature allows you to start a new scenario.
To begin, click on the "Not Entered" button located next to "Step 1, Personal Information."
Main Menu screen
The screen in Step 1 is used to enter your Personal Information. To begin, fill out your complete name and date of birth.
Step 1 screen
In the "Service Computation Date (SCD)" field, enter your SCD for retirement purposes. Your Service Computation Date (SCD) may be found on your most current SF 50, Notification of Personnel Action, in Box #31. If you are retired military or have an exceptional work history, please consult with your agencys personnel office to verify your SCD. For the purpose of this FERS Transfer Model, assume that all periods of deposit and redeposit service, including any post-1956 military service, have been paid for, in full, and are creditable for retirement purposes.
Enter the date that you wish to transfer to FERS in the "Transfer Date" field. In the "Unused Sick Leave Balance" field, please enter both your unused sick leave balance as of the date of your transfer to FERS and enter what you project your unused sick leave balance to be at the time of your retirement. The lesser of these two balances will be used in the CSRS component of your annuity computation should you elect to transfer to FERS. Most employees will be able to locate their current unused sick leave balance on their earnings and leave statement (pay stub). Employees with unusual hours, such as firefighters, should convert their sick leave to hours.
In the box located on the right of the screen, you will need to indicate your "Employee Type". Please check the appropriate box to indicate what type of annuity you expect to be eligible for at retirement. For the purpose of this FERS Transfer Model, if any "Employee Type" other than "Regular Employee" is checked, all of your service, including military service, will be deemed to be that specific type (Law Enforcement, Congressional, etc.) of service. If you have less than 20 years of special formula service, you may want to ask your agency to do a regular retirement estimate of your CSRS/FERS service.
After verifying that all information is correct, click on the "OK" box at the bottom of your screen. You will then be returned to the Main Menu screen. You will notice that a red check has been placed in the box next to Step 1, Personal Information. You may now advance to Step 2, Salary Information.
The screen in Step 2 is used for your salary information. If you are a General Schedule employee and do not receive locality pay enter your current grade and step using the pull-down arrows in the "Current Salary" field. If you are not a General Schedule employee (or are, but receive an adjusted rate) enter your annual pay.
Step 2 screen
In the "Work Schedule" field, the program will automatically default to "Full Time"; however, if you are working on a part time basis, please check the "Part Time" box. In addition to checking the "Part Time" box, enter in the number of hours per week you work. For the purpose of this FERS Transfer Model, if a part time tour of duty is indicated, all of your service will be deemed to be part time, including all service prior to April 7, 1986. The results from the Model allow you to make general comparisons of which retirement plan may provide overall better benefits. However, if your actual work schedule has fluctuated significantly, you may want to ask your agency to do regular estimates of benefits under CSRS and FERS.
The "Expected Salary" field is optional, but if you would like to have your benefits computed at a salary rate that you expect to be receiving at retirement, enter the amount of the expected salary rate. Enter the current salary rate for the grade and step you expect to be when you retire. This salary will be used as your High Three.
In the "Pay Schedule" field please indicate if you are paid on a "Bi-weekly", "Bi-monthly", or "Monthly" basis. The program automatically defaults to "Bi-weekly", so you only need to make a change if you are paid on a bi-monthly or monthly basis.
After verifying that all information is correct, click on the "OK" box at the bottom of your screen. You will then be returned to the Main Menu screen. You will notice that a red check has been placed in the box next to Step 2, Salary Information. You may now advance to Step 3, Thrift Savings Plan.
The screen in Step 3 is used to enter information regarding your Thrift Savings Plan. If you are currently participating in the Thrift Savings Plan (TSP), please indicate by checking the box at the top of this screen and enter in your current TSP account balance and date of this balance. Enter only numbers. Commas will be entered automatically. Your account balance may be obtained from your last biannual TSP statement that you received in the mail. You may also obtain your account balance from the TSP web site (http://www.tsp.gov/) or by calling the ThriftLine at (504) 255-8777. You must have your Personal Identification Number (PIN) to obtain your account balance from either the web site or the ThriftLine. If you do not know your PIN, you may request one by calling the ThriftLine.
Step 3 screen
In the "CSRS Contributions Per Pay Period" field, enter either the percentage of pay you are contributing (cannot exceed 5%), or a fixed dollar amount of your contribution. Under the "If I Transfer" column, again, enter either the percentage of pay you will be contributing (cannot exceed 10%), or a fixed dollar amount of your contribution. Note: highly compensated employees may not be able to contribute a full 10% of pay because of the Internal Revenue Service annual limit on tax-deferred contributions. In 1998, this limit is $10,000.00.
After verifying that all information is correct, click on the "OK" box at the bottom of your screen. You will then be returned to the Main Menu screen. You will notice that a red check has been placed in the box next to Step 3, Thrift Savings Plan. You may now advance to Step 4, Social Security.
Step 4 - SOCIAL SECURITY INFORMATION
The screen in Step 4 is used to enter your Social Security Information. Check the appropriate box to indicate if you are covered under the CSRS Offset provisions. Your latest SF 50, Notification of Personnel Action, will have your retirement plan posted in Box #30. If you are covered under CSRS Offset, Box #30 on the SF 50 will show it as "FICA and CSRS (Partial)".
Step 4 screen
The "CSRS Offset" box will only be displayed if you have answered "yes" to being covered under CSRS Offset. Enter the effective date of your coverage under CSRS Offset. You may need to check your personnel records to obtain this date. If you have had a break in service since acquiring Offset coverage, adjust the date to compensate for the break.
To project a future Social Security benefit you will need your year-by-year earnings that were subject to Social Security.
You may have this information in your own records or you may need to obtain a Personal Earnings and Benefit Estimate Statement (PEBES), form SSA-7004, from the Social Security Administration (SSA). This statement will list your earnings, by year, in employment covered by Social Security. You will need to enter the earnings into the Social Security Information screen for the corresponding year of what the PEBES shows -- enter every year that shows earnings.
In addition, enter the total number of Social Security credits you have now. If your PEBES indicates that you have "enough credits", then enter "40" as the total number of Social Security credits. However, if you expect to have over 20 years of substantial earnings at the time of your retirement, enter the exact number of credits you have (number of years of earnings under Social Security multiplied by 4) in order to lessen the effects of the Windfall Elimination Provision.
If you plan on retiring from the Federal Government after you are age 62, the Model will continue to give you SSA credit for those years. Please keep in mind that you do not need to enter any Federal earnings after your transfer date to FERS - only enter expected earnings for work you plan on performing after retirement in the private sector (up to age 62). If you plan on leaving the Federal Government before you are age 62 and plan to continue working in the private sector, you should enter expected earnings for the years you plan to work up to age 62. If you plan to work after age 62, you may use the Social Security Administration's computation model to project your Social Security benefit. It is available on SSA's web site at http://www.ssa.gov/.
You can obtain the PEBES request form (SSA-7004) online from Social Securitys web site (http://www.ssa.gov/pebes/), or from your personnel office.
After verifying that all information is correct, click on the "OK" box at the bottom of your screen. You will then be returned to the Main Menu screen. You will notice that a red check has been placed in the box next to Step 4, Social Security. You may now advance to Step 5, Options.
The screen in Step 5 is used to enter the age you would like to retire, type of TSP Annuity Program you would choose, and the rate of interest you might expect from your TSP account.
Step 5 screen
Enter the age in years and months that you would like to retire. Please note that the earliest age that you may enter here is the earliest date at which you are eligible to receive an annuity based on a voluntary retirement. The oldest age you are allowed to enter in this Transfer Model for retirement is age 70. If you plan on retiring past the age of 70, please contact your benefits counselor.
Select which TSP Annuity Option you want to have. The program will automatically default to the "Single Life" TSP annuity option. If you select "Joint Life with Spouse", then you must also enter your spouses date of birth.
The "TSP Options" field is the estimated annual rate of return you expect to receive from your TSP account. The program defaults to the rate of 7.0%, which when coupled with the inflation rate, is quite conservative based on current results of the TSP. The program uses the 7.0% rate here because this program makes a projection over a period that will represent much of an employees career. You may change this rate by entering a different number. 1
To project TSP account balances, the Model uses your current salary and holds it constant. It does not assume pay increases or promotions. To calculate TSP contributions, your current annual salary is divided into 12 equal monthly increments. Earnings are compounded monthly using 1/12th of the annual real rate of return, i.e., the difference between the assumed annual investment return and the assumed rate of inflation which you have provided. The amount compounded each month includes the full amount of the monthly contribution as if it were all deposited on the first day of the month. The result is rounded to the nearest $100. Currently, however, when the TSP values your account, only 1/2 of your TSP deposits made during a month earn earnings for that month.
To determine the payout of your TSP account, the calculator uses the annuity factors which were published by the TSP in its January 1996 booklet TSP Annuities. The interest rate index is 7%. However, an actual TSP annuity will be based on the interest rate index at the time the annuity is purchased, and, thus, the interest rate index may be lower than 7%. For additional information about annuities, see the TSP Annuities booklet. It is available from your agency or the Thrift Board's web site at http://www.tsp.gov/.
The "Minimum Full Benefit Retirement Ages" information is automatically provided to the user. The ages shown under the "CSRS and FERS Retire Age" represent the earliest age that the user may retire and receive an unreduced annuity, in other words, the annuity would be computed without a reduction for age. These figures are based on a voluntary retirement. The "FERS MRA+10" age represents the earliest age that the user may retire under the FERS MRA+10 provision. Retiring under this provision usually will result in an annuity that is reduced for age.
For the purpose of this FERS Transfer Model, the user will be given only two choices for a survivor annuity under the "Survivor Benefits" section of this screen -- either no survivor annuity or a full survivor annuity.
The "Inflation Rate" is an estimated rate of inflation that will be used to project the estimated benefits over a period that represents the remainder of an employees career and his or her retirement years. The program defaults to the rate of 4.0%; however, you may change this rate by entering a different number. 1
After verifying that all information is correct, click on the "OK" box at the bottom of your screen. You will then be returned to the Main Menu screen. You will notice that a red check has been placed in the box next to Step 5, Options. You may now advance to Step 6, Review Your Information.
1
The figures used by the Civil Service Retirement and Disability Fund for long-range projections are the 7% interest rate, 4% rate of inflation, and 4.25% salary growth. These figures are used as default assumptions in the Model.
Step 6 - REVIEW YOUR INFORMATION
The screen in Step 6 is a read-only screen that displays the information that the user has put into the prior screens. At this point, the user should review all of the displayed information. If an item needs to be changed or corrected, depress the "OK" button at the bottom of the screen to return to the main menu where the specific screen that needs editing can be accessed. If all of the information is correct, depress the "OK" button and go on to Step 7, Run the Calculation.
Step 6 screen
Step 7 - RUN THE CALCULATION (COMPARISON)
The screen in Step 7 shows a comparison of projected annual retirement benefits the user might expect to receive by remaining under CSRS or by joining FERS. In reviewing the comparison chart, note that the benefits projections are based on the salary rate, investment return, and other factors, such as desired age at retirement that you provided which directly affect your final level of benefits.
Step 7 screen
When interpreting the chart, keep in mind that all dollar figures are shown in current 1998 dollars and have been rounded to the nearest hundred dollars. The totals shown may not be exact due to the rounding. The term "current dollars" simply means that values are stated in terms of today's purchasing power. For example, if someone were to tell you that your CSRS benefit in the year 2020 would be $100,000.00 per year, you have no way of determining whether this is enough to live on or an amount that would allow you to maintain your current standard of living.
Stating the information in today's dollars allows you to relate the purchasing power to what you know -- what your money buys today.
Because the comparison chart consists of benefits projected into the future, the benefit amounts shown should not be taken as estimated benefits. Instead, as the main objective of the Model, the amounts should be taken as indicators of which plan may provide the better total monetary benefits.
As shown in the Step 7 screen, the decrease in FERS and TSP benefits at ages 62 and 75 reflects the fact that FERS benefits do not receive the full cost-of-living adjustments and that the TSP annuity option as shown in this FERS Transfer Model provides a level payment that does not receive a cost-of-living adjustment. (However, it should be noted that the Thrift Plan does offer payment options that include a cost-of-living adjustment, but these options are not included in this comparison Model.)
Thrift Savings Plan Balance (as of expected date of retirement) - The TSP Balance, as shown in the very first column of the comparison chart, under both "Staying in CSRS" and "Joining FERS", is the projected amount you will have in your account. This figure is based on what you are currently contributing under CSRS and what you expect to contribute under FERS. It has been adjusted to reflect the specified rate of return and inflation rate that you entered into the FERS Transfer Model (in Step 5, Options).
Future Employee Contributions - The figures in this column are the projected total amounts of money that will be withheld from your basic salary towards your pension, Social Security, and Thrift Plan from the date you enter in the program for your transfer to FERS through the expected date of retirement. The projections are shown for both "Staying in CSRS" and "Joining FERS."
Annual Retirement Benefits - This column represents your benefits at the desired age of your retirement. If the amounts under "Staying in CSRS" show as zeros, that is because the desired retirement age that you entered does not qualify you for a CSRS annuity at that specific age and number of years of service. Remember that these benefits are all assumed to be under a voluntary retirement, which, for most employees, is entitlement at age 55 with 30 years of service, age 60 with 20 years of service or age 62 with 5 years of service. (Different ages and service combinations apply to people who retire under one of the special categories, such as law enforcement.) Note: In this example, in the FERS benefits portion of the display, the 3rd row under "Joining FERS" represents the FERS Supplement if it is payable. The FERS Supplement is an approximation of the portion of a Social Security benefit earned while under FERS. For those retirees who are eligible to receive this benefit, it substitutes for the Social Security part of your total FERS benefit until age 62, when most people become eligible for Social Security. To be eligible for this Special Retirement Supplement, you must have at least 1 full calendar year (January 1 - December 31) of FERS coverage and retire after 30 years of service at your MRA, after 20 years of service at age 60, or under certain special retirement provisions. The Special Retirement Supplement is included in your monthly annuity payment as administered by OPM.
The Supplement does not receive any cost-of-living adjustments (up through age 62) and can be reduced or terminated if you work after retirement and earn more than the allowable amount. At age 62, the Supplement ends, and if you are eligible and apply for the benefit, you can begin to receive Social Security benefits paid and administered by the Social Security Administration. If you continue to work after age 62, the amount of your Social Security benefit may be affected by your income from work.
If you have chosen a retirement date that is earlier than when you will be eligible for an immediate CSRS annuity, the deferred benefit shown at age 62 is adjusted downward to reflect the impact of inflation in the years between separation and age 62.
The Social Security benefit shown in the last two columns of the example under Annual Retirement Benefits is based on the input you provided in the Social Security Information screen and the number of years of service you may have under CSRS Offset and/or FERS. The comparison chart shows this benefit staying the same over time, unlike the FERS and TSP benefits. Because the Social Security benefit receives full cost-of-living adjustments, it keeps pace with inflation.
In addition, the Social Security benefit shown in the FERS Transfer Model is fully adjusted to account for the Windfall Elimination Provision (WEP) if, based on the information that you provided, this reduction applies. If you have a Personal Earnings and Benefits Estimate Statement (PEBES) from the Social Security Administration, the benefit shown is not adjusted for the WEP even though it may apply to you.
Please refer to the FERS Transfer Handbook for a more detailed explanation of the Social Security benefit and the WEP.
Step 8 - VIEW AND/OR PRINT YOUR COMPARISON REPORT
You can view and/or print a copy of your report by clicking the "Report" button at the bottom of your screen. A copy will be shown on the screen; there are four pages included with every report as shown in the report screens below. To print the report, use your mouse and click on the word "Print" in the upper left-hand corner of the actual report. Your report will then be sent to your printer. If no printer is connected to the computer you will see the message, "There was a problem printing to your default printer, please check your configurations and try again."
Report, page 1 screen
Report, page 2 screen
Report, page 3 screen
Report, page 4 screen
You may also save and/or modify this comparison at any time. Note the menu at the bottom of the comparison chart (Step 7) beginning with "Modify". These features allow you to make changes to this scenario at a later date, as well as allowing you to create and compare new scenarios.
"Modify" - The "Modify" feature will bring up the Main Menu screen (which lists the steps of the program that must be completed). From the Main Menu, you may go back and edit any of the information you have entered. When you choose to run the calculation again, your edited information will be factored into the new comparison.
"Save" - The "Save" feature allows you to save your current scenario. If you save a scenario you will then be able to retrieve it at a later date and edit or further complete the information. When you press the "Save" button for the first time during your current scenario, your computer will prompt you to choose a directory in which to save this file. After you save your current scenario for the first time any subsequent saves will save the file to the same directory. All of the scenarios you save will be given a ".opm" extension. To open this file at a later date, start the FERS Transfer Model program, select "Open" from the menu located on the top of the screen which lists the steps of the program (see Main Menu screen). Your computer will then prompt you to locate the directory in which the file is saved and then you may select it.
"Save As" - The "Save As" feature allows you to save an existing scenario under a new name. See information in the above paragraph on saving your scenarios.
"Exit" - When you press the "Exit" button, the program will prepare to close. If you have not saved the scenario on which you were working, the program will ask you if you want to save it. After you have answered the screen prompts the program will close.
This Model is distributed by the U.S. Office of Personnel Management to assist employees who are eligible to make an election under the provisions of Section 642 of Pub. L. 105-61. The Model produces projected retirement benefits under each of the election scenarios for which an employee is eligible based on statutes, regulations, and retirement plan provisions as of May 1998. The CSRS and FERS benefits estimates were tested against OPM's retirement calculation systems. The Model produces projections, not exact figures. The estimates are based on a number of assumptions which have an important effect on the results, and which could differ from actual future experience. Because benefits cannot be projected with certainty, you should not base your decision to make an election under the law solely on benefit estimates from this Model, but should carefully consider all features of both retirement plans as they pertain to your situation. The U.S. Office of Personnel Management, and the Models developers expressly disclaim any liability from the use of the Model.
Updated 3 September 1998