Federal and Public Sector Retirement
Civil Service Retirement System (CSRS)
For federal employees in the Civil Service Retirement System (CSRS), there are generally three different versions of CSRS programs. Our law firm represents and advises federal employees and their spouses nationwide on these retirement programs and issues associated with their retirement plan, both before individual agencies, the Office of Personnel Management (OPM) and the Merit Systems Protection Board (MSPB). In many cases, our law firm represents individuals in the application process as well.
CSRS is a defined benefit, contributory retirement system for federal employees who entered covered federal employment as full- or part-time employees prior to January 1, 1984. The law that established CSRS was originally enacted in 1920 and has been in effect since that time. CSRS continues to provide retirement, disability, and survivor benefits to eligible civilian federal government employees, although more recent federal employees are covered by the Federal Employees Retirement System (FERS).
Under CSRS, employees are generally able to contribute up to 10 percent of their salary to CSRS. Federal employees who are enrolled in CSRS are excluded from Social Security coverage and generally do not pay Social Security payroll or Old-Age, Survivors and Disability Insurance (OASDI) taxes; however, they are required to pay CSRS employee deductions and Medicare tax. The employing federal agency matches the employee’s CSRS contributions. Further, federal employees may generally contribute up to five percent of their salary to a Thrift Savings Plan (TSP) that are tax deferred, but they do not receive any government contribution. Based on these general provisions as well as others governing CSRS coverage, there are a number of issues that can arise with respect to placement under CSRS coverage.
The next form of CSRS is referred to as CSRS Interim coverage. CSRS Interim is a version of Civil Service Retirement System (CSRS). CSRS Interim was developed pending the creation of a new retirement system for new federal employees who were hired or employees who were rehired (after a break in federal service of more than 365 days) between the years of 1984 and 1987. Federal employees covered under the temporary CSRS Interim coverage paid OASDI taxes and a reduced CSRS contribution. Once the new retirement system became effective, employees under the temporary CSRS Interim coverage thereafter acquired either FERS or CSRS Offset coverage.
If a CSRS Interim employee had at least five years of creditable civilian service as of December 31, 1986, the federal employee would have generally been converted to CSRS Offset or would have had the opportunity to elect FERS. However, if a CSRS Interim employee had less than five years of creditable civilian service as of December 31, 1986, the employee would likely have automatically been converted to FERS on January 1, 1987. All CSRS Interim or CSRS Offset service will generally be considered service under FERS if the employee has elected or has been automatically converted to FERS. Based on these general provisions, a number of legal issues can arise with respect to placement in CSRS Interim coverage.
Another version of CSRS is CSRS Offset. CSRS Offset is a version of CSRS that applies to federal employees who had a break in service that exceeded a year ending after December 31, 1983, and who had at least five years of creditable CSRS service as of January 1, 1987. As an example, a federal employee who entered federal service on September 1, 1975, and who worked for 20 years, decided to leave federal service on August 1, 1995. The individual then re-entered the federal service on September 1, 1996. Upon re-entering federal service, the federal employee would likely be classified as a CSRS Offset employee. Employees covered under CSRS Offset generally pay disability (OASDI) taxes and a reduced CSRS contribution. Based on these general guidelines, issues can also arise with respect to placement under CSRS Offset coverage.
Please contact Berry & Berry, PLLC to schedule a consultation with an attorney should you have any questions regarding your CSRS, CSRS Interim, or CSRS Offset coverage issues. Our law firm represents and advises employees with respect to retirement issues under all three of these CSRS programs.