Upping your retirement ante


Federal employees enrolled in the Civil Service Retirement System (CSRS) can add money to their annuities through the voluntary contributions program.

CSRS enrollees can get the Office of Personnel Management to set up a voluntary contributions account for them. The account can be used either to increase the employee's annuity or as a form of savings account.

Employees can contribute up to 10 percent of their lifetime federal salaries to the accounts. The contributions themselves are taken out of employees' paychecks after taxes are deducted, but they earn tax-deferred interest.

Employees can withdraw the full balance from their accounts, including interest, at any time. The interest can be rolled over into a tax-deferred individual retirement account (IRA) or other qualified retirement plan.

Employees can also opt to use their voluntary contribution accounts toward higher annuities. For each $100 in a voluntary contributions account-including interest earned-retirees get an additional annuity of $7 a year, plus 20 cents for each full year they are over age 55 at the time they retire. Unlike the standard CSRS pension, the additional annuity is not increased by annual cost of living increases.

Interest rates for the accounts are based on the average yield of new investments purchased by the retirement fund during the previous fiscal year. The annual interest rates have decreased gradually since the interest rate formula took effect in 1985. In 1985, the interest rate was 13 percent; in 1987, 9 percent; in 1992, 8.1 percent; in 1995, 7 percent; in 1999, 5.8 percent.

OPM has a fact sheet explaining the voluntary contributions program in more detail at: www.opm.gov/fers_election/facts/ri83-10.htm. To apply for the program, you'll need to complete Standard Form 2804 (Application to Make Voluntary Contributions). You can get the form online from www.opm.gov/forms/html/ff_sf.htm if you have FormFlow software. Or you can ask for the form from your agency's personnel office.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Forecasting Cloud's Future

    Conversations with Federal, State, and Local Technology Leaders on Cloud-Driven Digital Transformation

  • The Big Data Campaign Trail

    With everyone so focused on security following recent breaches at federal, state and local government and education institutions, there has been little emphasis on the need for better operations. This report breaks down some of the biggest operational challenges in IT management and provides insight into how agencies and leaders can successfully solve some of the biggest lingering government IT issues.

  • Communicating Innovation in Federal Government

    Federal Government spending on ‘obsolete technology’ continues to increase. Supporting the twin pillars of improved digital service delivery for citizens on the one hand, and the increasingly optimized and flexible working practices for federal employees on the other, are neither easy nor inexpensive tasks. This whitepaper explores how federal agencies can leverage the value of existing agency technology assets while offering IT leaders the ability to implement the kind of employee productivity, citizen service improvements and security demanded by federal oversight.

  • IT Transformation Trends: Flash Storage as a Strategic IT Asset

    MIT Technology Review: Flash Storage As a Strategic IT Asset For the first time in decades, IT leaders now consider all-flash storage as a strategic IT asset. IT has become a new operating model that enables self-service with high performance, density and resiliency. It also offers the self-service agility of the public cloud combined with the security, performance, and cost-effectiveness of a private cloud. Download this MIT Technology Review paper to learn more about how all-flash storage is transforming the data center.

  • Ongoing Efforts in Veterans Health Care Modernization

    This report discusses the current state of veterans health care


When you download a report, your information may be shared with the underwriters of that document.