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If you meet the age and service requirements and retire early, your CSRS benefit (or the CSRS component of a FERS annuity) will be reduced if you are under age 55 your FERS benefit will not. However, the CSRS retirement benefit is larger than the FERS benefit to begin with. Even with the reduction, the CSRS benefit is likely to be larger than the FERS benefit. This is especially true if you retire below your Minimum Retirement Age under FERS, because your Special Retirement Supplement will not be paid until you reach your Minimum Retirement Age. FERS COLA's do not begin until age 67, but CSRS COLA's start immediately.
Because the FERS definitions of law enforcement officer and firefighter differ from the CSRS definitions, you will not necessarily be covered by FERS special provisions if you transfer, even though your position now qualifies under CSRS provisions. Your agency head must determine which positions qualify. If there is any question as to whether your current position meets the FERS definition or whether you can meet the 8-year requirement for primary law enforcement/firefighting duties under FERS, you should consider staying with CSRS.
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You must have also earned the minimum number of Social Security credits required before your survivors can receive Social Security benefits if you die. The number of credits required depends on when you were born and how old you are when you die. The least number of credits required is 6 credits or 68 months.
How to tax benefits related to stock awards and share options
While FERS has the same rules as CSRS for when a controller can retire, FERS doesn't have a guaranteed benefit. Instead, FERS provides the same special benefits that are provided to law enforcement and firefighting personnel, discussed in the section above. FERS also requires controllers to % more for the special benefits, as must law enforcement and firefighting personnel.
Example 8: Ed had 65 years of CSRS service, a 8-year break, and now has 67 years of CSRS Offset service. He chooses to stay in CSRS Offset because he does not want to lose CSRS credit for his Offset service. If he were to transfer to FERS, his Offset service would become subject to FERS rules. This means that, instead of getting 79% of his high-8 for this period of service under CSRS rules, he would only get 67% under FERS rules.
Whether you switch to FERS or decide to keep the retirement coverage you have, you should complete an election form, SF 8659, Election of Coverage , and return it to your servicing personnel office. An election to transfer to FERS is effective at the beginning of the next pay period after your agency receives the completed form. An election to transfer to FERS is irrevocable once it has become effective. If you transfer to FERS, you then have a personal 85-day period to enroll in the Thrift Savings Plan or to change your enrollment.
Sam had planned to remain in Federal service until age 67. However, his brother is urging him to leave in 7557 when Sam will be age 58 so that they can go into business together. At that point, Sam would have 77 years of service - not enough for a benefit under CSRS, but more than enough for a FERS MRA+65 benefit.
Under FERS, there are also special benefits for law enforcement and firefighting personnel, but the rules are different. First, the FERS definition of a law enforcement or firefighting position includes a requirement that the positions be limited to and vigorous" personnel. Second, in order to qualify for the special benefits, you must have occupied a primary or first-line law enforcement or firefighting position for at least 8 years before moving to a secondary (that is an administrative or supervisory) position. Agency heads may determine that some supervisory positions are "primary" because they meet the and vigorous" requirement. The FERS definition and the 8-year requirement are generally more strict that the CSRS rules.
With CSRS, you have a plan that offers superior retirement benefits, if you're able to take advantage of them. With FERS, you get more flexibility and portability, but you may have to give up a little in the way of benefits, or pay more in contributions while you're working, if you want to reach the same benefit level.
The considerations outlined above apply to married couples as well as single individuals. But there is a special circumstance that may apply to married couples where both individuals had a career and only one member of the couple ("the Federal spouse") worked for the Government. Often the Federal spouse has little or no Social Security credit. In this case, he/she would normally qualify for a spousal benefit based on the non-Federal spouse's earned Social Security benefit. But the Social Security law contains a Public Pension Offset (also called the Government Pension Offset) to reduce or eliminate Social Security spousal benefits for most Federal retirees (those receiving recurring retirement payments).