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Frequently Asked Questions Retirement

FERCCA

  • An actuarial reduction allows you to receive benefit without having to pay an amount due in a lump sum. OPM reduces your annuity in a way that, on average, allows the Retirement Fund to recover the amount of the missing lump sum over your lifetime. The actuarial reduction becomes a permanent reduction in your benefit. The amount of the actuarial reduction depends on your age and the amount of the lump sum you would otherwise have to pay at the time you retire. To compute an actuarial reduction, OPM divides the lump sum amount by the present value factor for your age at retirement.
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  • Unless you choose FERS, there is no additional cost to you. If you choose FERS, you will only incur additional costs if you decide to make additional TSP contributions (known as make-up contributions). These are contributions that you could have made if you had been correctly covered by FERS. Of course, you're the one who chooses how much additional contributions you want to make.

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  • You can go ahead and process any error that lasted for less than 3 years of service after December 31, 1986 with one exception. If the error is one where the employee was erroneously put in FERS during the time that the employee could have voluntarily elected FERS (these are sometimes called "deemed FERS" errors), then you should not correct these types of errors. Do not correct the deemed FERS errors even if the error lasted for less than 3 years of service.

    In the coming months, OPM will issue detailed instructions for correcting each type of error that is affected by FERCCA. Please do not begin correcting coverage errors affected by FERCCA until you receive OPM's instructions.
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  • FERS stands for the Federal Employees Retirement System. FERS became effective in 1987 and most new Federal civilian employees hired after 1983 are automatically covered by FERS. FERS is a three-tiered retirement plan. The three components are the:

    • FERS Basic Benefit
    • Social Security Benefit
    • Thrift Savings Plan Benefit

    Most FERS employees pay 0.8% of basic pay for FERS basic benefits. The agency contributes 10.7% or more to FERS. The FERS basic benefit provides retirement, disability, and survivor benefits and may be reduced for early retirement or to provide survivor protection.

    The FERS basic benefit is computed based on your length of service and the highest average basic pay you earned during any 3 consecutive years of service (know as the "high-3" average pay). Generally, the FERS basic benefit is 1% of your high-3 average pay times your years of creditable service.

     

    FERS employees can currently contribute up to 11% of basic pay to the Thrift Savings Plan. An automatic Government contribution adds 1% of basic pay to every FERS employee's TSP account. The Government adds up to another 4% of basic pay, depending on how much the employee chooses to contribute.

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  • FERCCA is the Federal Erroneous Retirement Coverage Corrections Act. It is a law that addresses the long-term harm to retirement planning created when employees are put in the wrong retirement plan.

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  • Look at any of your Standard Form 50s (Notifications of Personnel Actions). There's a block that shows your retirement plan. It's Block 30 on all current SF-50s. You'll see a code followed by an acronym that represents your retirement plan. Most Federal employees are in one of four possible retirement plans. They are:

    Retirement Plan

    Commonly Called

    SF-50

    Civil Service Retirement System

    CSRS

    Code 1 or 6

    Civil Service Retirement System and Social Security

    CSRS Offset

    Code C or E

    Social Security Only

    FICA

    Code 2

    Federal Employees Retirement System

    FERS

    Code K, L, M, or N


    "FICA" indicates Social Security coverage on your SF-50. For example, your retirement coverage as it appears on the SF-50 may be CSRS and FICA instead of CSRS Offset or FERS and FICA instead of FERS.

    If your agency does not use Standard Form 50s, you can find your retirement plan on the form it uses to notify you of personnel actions.

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  • It depends on what your retirement coverage error was and how long you were in the wrong retirement plan. FERCCA may provide you one or all of the following:

    • You may have an opportunity to choose another retirement plan;
    • You may be reimbursed for certain out-of-pocket expenses you paid as a result of a coverage error;
    • You may benefit from certain changes in the rules about how some of your Government service counts toward retirement; and
    • You may be able to make-up contributions to the Thrift Savings Plan and get lost earnings on those contributions as well.
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  • We believe that the number of employees in the wrong retirement plan is very small. Agencies have discovered and corrected many retirement coverage errors. However, we are certain some employees still are in the wrong retirement plan.

    If you have not worked for the Federal Government continuously since 1983, or you have had changes in appointment types and retirement plans, then you may want to ask your agency to review your retirement coverage to ensure that it is correct.

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  • Social Security-Only means coverage under Social Security without also being covered under either CSRS or FERS. You would have Social Security-Only coverage if you were hired under an appointment that is excluded from CSRS or FERS.

    Usually employees serving under temporary appointments (limited to 1 year or less), intermittent employees, and other appointments that would not be expected to last at least 5 years (such as term and excepted indefinite appointments) are excluded from CSRS.

    Employees serving under temporary (limited to 1 year or less) appointments and intermittent employees are generally excluded from FERS.

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  • Which retirement plan you belong in depends upon the type of appointment you have and your work history. The rules can be complicated. That's why some employees are in the wrong plan. Below are some of the common errors, broken down by retirement plan. Find your retirement plan, and see if you fit any of the situations listed. If you do, you may be in the wrong plan. But, remember there are exceptions to the general rules. You may be in the right retirement plan because you fall under one of the exceptions (like the one shown under CSRS Offset). Contact your Human Resources office. They can help you.

    If your retirement plan is: Then you may be in the wrong plan if you: CSRS

    Worked for the Government before 1984, but not on a permanent basis; or

    Left Federal employment for more than a year at any time after 1983; or

    Have a temporary appointment limited to a year or less, a term appointment, or an emergency indefinite appointment; orHave no Federal civilian employment before 1984; or

    Do not have a career or career conditional appointment and you work on an intermittent basis. (See the work schedule block on your SF-50.)

    CSRS Offset

    Have a temporary appointment limited to a year or less, a term appointment, or an emergency indefinite appointment; orHave no Federal civilian employment before 1984; or

    Do not have a career or career conditional appointment and you work on an intermittent basis. (See the work schedule block on your SF-50.); or

    Did not work for the Government for a total of 5 years before 1987 (don't count your military service).

    Exception: If you worked under CSRS, left the Government, and your agency placed you in CSRS Offset on your return, your CSRS Offset coverage is probably correct if you had 5 years Government service when you left.)

    FERS

    Have a temporary appointment limited to a year or less;

    Do not have a career or career conditional appointment and you work on an intermittent basis; or

    Have worked for the Government for at least 5 years before 1987 (not including military service) unless you elected to transfer to FERS during a FERS Open Seasons or after a break in service.

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