How will transferring to FERS affect CSRS Offset employees?

How will transferring to FERS affect CSRS Offset employees?

"CSRS Offset employees won't retain the full benefit that you've earned to date under CSRS. If you elect to transfer to FERS your service that was subject to both CSRS and Social Security withholdings will be credited under FERS rules in the computation of the FERS basic benefit.

"So, for example, if you have 20 years of service under CSRS, the last five years being Offset service, and you transfer to FERS and work 15 more years, you will be entitled to a CSRS part based on 15 years of service, and a FERS part based on 20 years of service. The five years of offset service will be credited under FERS computation rules. As a result, the CSRS part would equal 26.25 percent of the high-3 average salary, and the FERS part would equal 20 percent. The total benefit would equal 46.25 percent of the high-3. Many offset employees wonder if they will be able to make additional TSP contributions to cover the period of offset service, and will they get agency contributions as well. There is no provision in the law to allow for retroactive contributions in this situation.

"Offset employees need to think very carefully about transferring to FERS. The more offset service an employee has, the more he or she could lose by transferring to FERS, although there may be other reasons FERS would make a good choice."

-OPM Retirement Benefits Specialist Ed Chimelowski

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