Most Federal employees at SAO are covered by the Federal Employees Retirement System (FERS), the Civil Service Retirement System (CSRS), or the CSRS Offset System (CSRS Offset).

You are covered by FERS if you:

• Were first hired in a Federal position providing civil service retirement on or after January 1, 1984
• Are hired under a temporary, term, taper appointment
• Were hired after a break-in-service of more than one year and had less than five years of previous creditable civilian service as of Decemer 31, 1986 (or date rehired, whichever is later)
• Are rehired after separation from a covered FERS position, or
• Transfer from CSRS or CSRS Offset to FERS within six months from the date of rehire.

You are entitled to CSRS coverage if you were:

• First hired on or before December 31, 1983, and were continuously covered by CSRS
• Previously covered by CSRS and were rehired after a break-in-service of less than one year.

If you are reemployed after a break-in-service of 365 days or more (post 1983), you have six months from the date of rehire in which to elect a transfer to FERS in lieu of being covered by the CSRS Offset system. (If you elect FERS coverage, you also have 30 days in which to elect to participate in the Thrift Savings Plan.) Your annuity will be computed under the CSRS formula for the time worked under the CSRS system, and under the FERS formula for the remainder of your covered service should you elect FERS coverage. Retirement eligibility and death benefits are based on FERS rules if you transfer to FERS.

General retirement information can be accessed on the OPM Webpages.

FEDERAL EMPLOYEES RETIREMENT SYSTEM (FERS)

FERS is a three-tiered retirement plan comprised of three components: Social Security, a Basic Benefit Plan and the Thrift Savings Plan.

Federal employees first hired after 1983 are automatically covered under Social Security. Social Security taxes are levied against that portion of all wages that does not exceed an amount called the contribution and benefits base (wage base). The annual wage base is adjusted each year to reflect increases in average wages throughout the national economy. All wages up to the wage base are subject to Social Security taxes, which total 7.65 percent. Wages that exceed the wage base are subject to HITS only.

• Old Age Survivor Disability Insurance (OASDI) equals 6.2 percent
• Medicare Hospital Insurance Tax (HITS) equals 1.45 percent

OASDI, which provides your Social Security retirement benefits, is paid to you only if you are at least age 62 and have paid Social Security taxes for the required period of time (40 credits if born after 1928, and year of birth plus 11 if born in 1928 or before). To qualify for disability retirement under Social Security, you must meet the Social Security eligibility requirements before becoming disabled. HITS covers a portion of hospital expenses incurred at age 65 or older.

The Basic Benefit Plan provides retirement, disability and survivor benefits in addition to those benefits provided by Social Security. Survivor and disability benefits are available after 18 months of creditable civilian service. Employees contribute 0.80% of base salary every pay period to the FERS Basic Benefit Plan. To receive all other benefits from this portion of FERS, you must have at least 5 years of creditable civilian service. (See eligibility table below.)

The Thrift Savings Plan (TSP) is a retirement savings plan for Federal employees. It offers before-tax savings and tax-deferred investment earnings. Eligible FERS employees receive automatic agency contributions in addition to matching contributions. (See the separate section of this benefit plan description for details.)

Enrollment in the FERS Basic Benefit Plan and Social Security is automatic, and begins as of your appointment or eligibility date. Biweekly deductions will automatically be taken from your pay. It is important to designate a beneficiary for your FERS contributions using SF-3102. Please refer to the section, "THRIFT SAVINGS PLAN (TSP)" for enrollment and plan details.

There are three categories of retirement benefits in the Basic Benefits Plan: Immediate, Early and Deferred. Eligibility is determined by your age and number of years of creditable service. In some cases, you must have reached the Minimum Retirement Age (MRA) to receive retirement benefits. If you leave Federal service before you meet the age and service requirements for an immediate retirement benefit, you may be eligible for deferred retirement benefits. To be eligible, you must have completed at least five years of creditable civilian service. The early retirement benefit is available in certain involuntary separation cases and in cases of voluntary separations during a major reorganization or reduction in force.

The following table summarizes retirement eligibility criteria for FERS participants.

* Reduction is 5% for each year under age 62.

Reduced benefits means if you retire at the minimum retirement age (MRA) with at least 10, but less than 30 years of service, your benefit will be reduced at the rate of 5% for each year you are under age 62, unless you have 20 years of service and your annuity begins at age 60 or later.

If you retire under FERS, your annuity begins the first of the following month.

Supplemental Annuity - An annuity supplement is provided to retirees under certain circumstances to take the place of the Social Security tier of FERS that is not payable until age 62. You must have at least one year of FERS service to qualify for this supplement. The supplement is payable by the government as follows:

• Voluntary Retirement: MRA 55-57 and 30 years

• Early Out Retirement: MRA 55-57

• Discontinued Service: MRA 55-57

You are not eligible for the supplement if you voluntarily retire under the age of 62 with a reduced annuity, or if you retire on disability or deferred retirement.

Disability Retirement - As a result of disease or injury, you are eligible for disability retirement at any age under the FERS Basic Annuity if you have completed 18 months of creditable civilian service and are unable to perform useful and efficient service in your position or any other vacant position at the same grade or pay level in the same commuting area for which you are qualified. You may also qualify for Social Security disability benefits if you meet the Social Security eligibility and quarters of coverage requirements.

Survivor benefits may be paid under certain conditions to current and/or former spouse(s), children, and a spouse you marry after retirement. Since the rules and computations are complicated, you should contact the SAO Benefits Office for details.

1. If you die while employed in Federal service, and have at least 18 months but less than 10 years of creditable civilian service, your eligible spouse will receive a lump sum payment that is adjusted for inflation, plus a lump sum of either half of your annual salary at time of death or half of your average high three yearly salary, whichever is higher.

2. If you have at least 10 years of Federal service, your eligible spouse will also receive an annuity equal to half of your accrued Basic Annuity. Eligible dependent children will receive an annuity that will be offset by any Social Security benefits payable.

3. If you die as a FERS retiree and had elected full survivor benefits, your eligible spouse will be paid 50% of the amount of your unreduced annuity, plus an annuity supplement if he/she is under age 60 and not eligible for Social Security benefits. (Your annuity will be reduced by 10% annually during your lifetime to provide full survivor benefits.) You may elect a lesser or no survivor benefit with your spouse's consent.

4. Your eligible surviving spouse may receive an annuity if you die after leaving Federal employment with at least 10 years of service, but before receiving an annuity (e.g., deferred retirement). The unreduced benefit, which equals one-half of your accrued Basic benefits, begins at the time when you would have reached age 62. It may begin sooner if your spouse elects a reduced annuity.

5. If you die with no survivors, the balance in your retirement account is paid in a lump sum to any individual(s) you have designated.

Refunds and Redeposits - If you resign from your position, you can request a refund of your FERS deductions. If you receive a refund of FERS deductions, you may not redeposit these funds, and the period covered by the refund will not be counted for eligibility to retire, or in the computation of any future annuity. The amount of refund is the total amount you have paid into the retirement system and does not include any interest payments or the amount that the Smithsonian has paid into the retirement system for you. Periods for which no retirement deductions were made (on or after January 1, 1989) are not creditable for retirement computation or eligibility purposes.

Part-time Employment - To determine the size of your annuity, part-time service will be prorated (part-time hours worked divided by the number of hours you would have worked if full-time) and credit will be given for days or hours actually worked.

CIVIL SERVICE RETIREMENT SYSTEM (CSRS)

CSRS is a defined benefit pension plan funded by contributions received from both the employee and the employer. You and Smithsonian Institution each contribute 7% of your base salary every two weeks. Employee contributions are guaranteed to be paid (to you or your survivors) as a retirement benefit.

It is important to update your beneficiary designation(s) periodically. Click here to complete a new CSRS beneficiary designation in PDF fillable format.

The following table shows when you are eligible to retire and receive benefits from the CSRS retirement fund.

If you retire under any other optional retirement provision on the last day of the month or within the first three days of a month, your annuity is computed beginning the next day. Otherwise, it is computed beginning the first day of the following month. If you retire under a discontinued service retirement, your annuity is computed beginning the day after separation. For example, if you are notified that your position will be abolished on July 1 of a particular year, and you meet the criteria for Optional or Discontinued Service Retirement, you may resign anytime prior to the July 1 date and apply for retirement benefits. If you were to choose to resign from service on June 20, then your annuity commences on June 21. If you resign on June 30, your annuity commences on July 1 of that year.

An employee who separates from Federal service before meeting the requirements of an immediate annuity is entitled to a deferred annuity to start at age 62, if the employee has completed at least five years of civilian service and has not taken a refund of the retirement deductions covering the last period of service.

If you retire on disability, your annuity is computed beginning the first day you enter a continuous non-pay status, or the day after separation, whichever is later.

Disability Retirement - If you retire on disability under age 60, you are guaranteed a minimum basic annuity amounting to the lesser of (a) 40% of your high-three salary, or (b) CSRS annuity figured under the general formula as though service had continued to age 60.

Survivor Benefits - At retirement, you may elect:

1. Full survivor benefits for a current spouse, which will be 55% of your unreduced CSRS annuity

2. Less-than-full or no survivor annuity, provided the current spouse consents

3. To name a person having an insurable interest to receive an annuity.

If you elect a full survivor annuity, you will receive a reduced annuity during your lifetime. If you die after five years of civilian service, and before you retire, your surviving spouse will receive 55% of the amount you would have received if you had retired at the time of your death (referred to as an "earned annuity"), or the lesser of:

• 22% of your highest three years' average salary

• 55% of the amount your annuity would have been if you had continued working until age 60 at the same "high-3."

Eligible dependent children under age 18, or any unmarried children between age 18 and 22, who are full-time students may also receive benefits. If you have no survivors eligible for an annuity, the balance of your retirement account is paid in a lump sum in the following order, unless you specify otherwise. If you wish to specify payment in a different order, or payment to a person not included below, contact the SAO Benefits Office.

• To your child or children in equal shares, with the share of any deceased child distributee among the descendants of that child

• Parents

• Estate

• Next of kin.

Deposit or Redeposit - If you have Federal service for which no CSRS retirement contributions were made (i.e., temporary appointments, military service) or if you received a refund of contributions, you may wish to make a deposit or redeposit to cover that service time. Deposits and redeposits can significantly affect the amount of your annuity by providing you with additional years of service credit. Contact the SAO Benefits Office at (617) 495-7371 for further details.

Part-time Employment - If you worked part-time before April 7, 1986, you will be given full credit for all service performed. Part-time service performed on or after April 7, 1986 will be prorated (part-time hours worked divided by the number of hours you would have worked if full-time) and credit will be given for days or hours actually worked.

Deferred Annuity/Refund - If you are separated from Federal service before meeting the age requirements for an immediate annuity, you may receive a deferred annuity payable at age 62, unless you waive the rights to an annuity by applying for a refund of retirement deductions. The amount of refund is the total amount you have paid into the retirement system. The refund does not include any interest payments or the amount that the Smithsonian has paid into the retirement system for you.

CSRS OFFSET SYSTEM

If you have five or more years of CSRS service and are rehired after a break in Federal service of at least 365 days after 1983, you are eligible to participate in the CSRS Offset Retirement System. You will have six months after being rehired under a CSRS Offset appointment to transfer to FERS. If you elect FERS coverage, you also have 30 days in which to elect the Thrift Savings Plan (TSP). Should you elect FERS coverage, your annuity will be computed under the CSRS formula for the time worked under the CSRS system, and under the FERS formula for the remainder of your covered service. Retirement eligibility and death benefits are based on FERS rules if you transfer to FERS.

CSRS offset employees contribute to both Social Security and CSRS. Employees currently contribute 0.80% of basic pay for the Basic benefit. Employees also contribute 7.65% to the Social Security Administration. All rules that apply to full CSRS employees also apply to CSRS Offset employees.

Benefits - Your CSRS annuity is reduced (offset) when you become eligible for Social Security (usually at age 62). The reduction is equal to your Social Security benefit creditable for service after 1983 when you paid into both CSRS and Social Security. In no instance will the reduction result in a benefit less than the total CSRS benefit entitlement.

For more information about FERS, CSRS or the CSRS Offset System, please call the SAO Benefits Office at (617) 495-7371.

THRIFT SAVINGS PLAN (TSP)

The Thrift Savings Plan (TSP) is a retirement savings plan for Federal employees. It offers before-tax savings and tax-deferred investment earnings. Both FERS and CSRS employees are eligible to participate. The TSP is supplemental to the CSRS retirement plan, and an integral part of the FERS retirement plan.

All new employees are immediately eligible to make their own contributions to TSP up to $15,000 (the limit established by the Internal Revenue Service) for 2006. However, all new employees covered by FERS must wait until they have been employed in Federal service for approximately one year, depending upon their EOD date, before they become eligible to receive agency matching contributions and the automatic agency contribution of 1% of their basic pay.

There is a special "catch up" provision for employees who are age 50 and who have contributed the maximum, whereby additional tax-deferred contributions may be made to the TSP. For more information, please refer to the TSP Webpages.

Eligible FERS employees will receive an automatic 1% agency contribution, even if they choose not to make their own contributions. If FERS employees elect to make employee contributions, the Smithsonian will also match their contributions dollar for dollar on the first 3% of their pay, and $.50 on the dollar for the next 4-5% of their pay. CSRS employees do not receive agency matching contributions. Employees may cancel their contributions to TSP at any time.

The Thrift Savings Plan offers a choice of five investment options:

Employees may transfer their existing account balances among the TSP funds on a daily basis by completing an interfund transfer online. Interfund transfers can also be submitted over the telephone or by mailing an interfund transfer form to the TSP service office.

The TSP is a long term retirement savings program. While you are still employed by the Federal Government, you may not withdraw funds from your account (although you may borrow from your account under certain circumstances). The retirement income that you receive from your TSP account will depend on how much you contributed while employed and the earnings (or losses) on your contributions. There are several income options for you to choose from once you decide to leave Federal service. For more information on your withdrawal options, please refer to the booklet, Withdrawing Your TSP Account, which may be downloaded from the TSP webpage, www.tsp.gov, or requested from the SAO Benefits Office.

TSP publications and forms are all available online at the TSP website at www.tsp.gov. For further information, please contact the SAO Benefits Office at (617) 495-7371.