Federal Employees Retirement System
The Federal Employees Retirement System (FERS) was created in 1987, but most employees who were first hired after December 31, 1983 are covered automatically under FERS and Social Security. FERS employees are also eligible to participate fully in the Thrift Savings Plan (TSP) including receipt of limited matching funds. FERS is a comprehensive system of entitlements that provides a full range of pension benefits and wage insurance protections.
FERS is a retirement plan that provides benefits from three different sources: a Basic Benefit Plan, Social Security, and the Thrift Savings Plan (TSP). Two of the three parts of FERS (Social Security and the TSP) can go with you to your next job if you leave the Federal Government before retirement. The Basic Benefit and Social Security parts of FERS require you to pay your share each pay period. Your agency withholds the cost of the Basic Benefit and Social Security from your pay as payroll deductions. Your agency pays its part too. Then, after you retire, you receive annuity payments each month for the rest of your life.
The TSP part of FERS is an account that your agency automatically sets up for you. Each pay period your agency deposits into your account amount equal to 1% of the basic pay you earn for the pay period. You can also make your own contributions to your TSP account and your agency will also make a matching contribution. These contributions are tax-deferred.
Because of FERS heavy reliance on the Thrift Savings Plan to provide the lion’s share of your retirement funds; as a FERS employee you must take more responsibility for your own retirement. A commitment to planning and diligent money management while you are an active employee will be required to achieve the retirement you dream of having.
VEBS will produce a Personalized Federal Employee Benefits report that will provide you with your current benefits and future retirement income. This report is tailored to you and will help you to make your retirement planning much easier.