Federal Employee Retirement

• The Federal Employees Retirement System went into effect on January 1, 1987. This retirement program replaced the previous Civil Service Retirement System, which was previously in place since 1920. The FERS consists of three components: a basic benefit plan, Social Security retirement and a thrift savings plan. The Social Security retirement benefit and thrift savings plan may follow a government employee who leaves federal employment before reaching the appropriate retirement age. The thrift savings plan is a retirement fund created by a worker's employing government agency. The worker's government agency contributes one percent of the employee's basic pay per period to the savings plan and will match any contributions the employee chooses to make.
  
  

Basic Benefit Plan

• A federal employee receives a basic annuity as part of his retirement package. The value of this annuity of calculated based on the average of the employee's highest three years of basic salary. This average is referred to as the "High-3." For example, an employee retiring at the full retirement age of 62, with 20 years of service and a High-3 average of $75,000 can expect to have a total retirement annuity of $15,000. This annuity is in addition to the retiree's Social Security retirement and thrift savings plan.
  
  

Insurance Benefits

• A federal retiree may choose to participate in the Federal Employees Health Benefits Program. This health care provider covers medical expenses relating to prescription drugs, doctor's visits, lab work, and emergency medical care. The retiree is free to choose a plan that best meets his needs moving forward from separation of service with the government. The retiree may also purchase a health plan for dental and vision care separately while still enjoying a group rate discount. A life insurance policy is available through the Federal Employees' Group Life Insurance Program.
  
  

Early Retirement

• If a government employee has 10 or more years of service she may retire at her minimum retirement age. The employee's minimum retirement age is based on the year of her birth. For example, if the employee was born after 1969 her minimum retirement age is 57. The value of the employee's basic annuity is reduced by 5 percent for every year under the full retirement age of 62 the employee is at her early retirement. An employee's retirement is not reduced if she completes at least 30 years of service or at least 20 years of service and retires at age 60.