If a CSRS Employee transfers to FERS, what happens to the benefit the employee was earning under CSRS?

If a CSRS Employee transfers to FERS, what happens to the benefit the employee was earning under CSRS?

"Most employees who transfer to FERS will be able to keep the benefit they've earned under CSRS. Under both CSRS and FERS, benefits are based on the amount of the employee's service and high-3 average salary. The basic benefit equals a percentage of the employee's high-3, and that percentage is determined by the amount of the employees service. However, the percentages are different under the two retirement systems: the CSRS formula is more generous.

"If an employee transfers to FERS, his or her FERS benefit will consist of two parts: the part that was earned while covered under CSRS, and the part that was earned after electing FERS.

"For example, if a CSRS employee has 20 years of service and elects to transfer to FERS and works for an additional 15 years until age 60, his benefit at retirement will consist of a CSRS part based on the 20 years of CSRS service, and a FERS part based on the 15 years of service. Under CSRS rules for regular employees, 20 years service provide a benefit equivalent to 36.25 percent of the high-3 average salary. Under FERS rules, 15 years of service provides a benefit of 15 percent of the high-3. So this employee's total basic benefit paid by OPM would equal 51.25 percent of the high-3. If the employee remained under CSRS, the benefit would be 66.25 percent of the high-3."

-OPM Retirement Benefits Specialist Ed Chimelowski

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