What is the Federal Employee Retirement System (FERS)?

What is the Federal Employee Retirement System (FERS)?

The FERS includes the Thrift Savings Plan (TSP) and other benefits available to employees of the federal government.

The eligible features of FERS may be different for the employees of different branches and agencies of the government. Civilian and military personnel are included in FERS.

FERS is essentially comprised of the Thrift Savings Plan (TSP), which is a 401(k)-type plan for federal employees, and, in most cases, a Federal employee retirement annuity. The Thrift Savings plan has lower fees than most 401(k)s and offers several kinds of index funds to employees.

It has an employer matching contribution of a full 3% and 50% up to 5% (for a total of 4%) as well as an automatic employer contribution of 1% which brings the total possible employer contribution to 5%.

Most federal employees are eligible for the annuity, which is essentially a pension, based on a formula which looks at the highest consecutive 3 years of pay and the number of years of service.

Federal employees are eligible to start receiving benefits at their Minimum Retirement Age, generally, which can be between age 55 and 57. There is also another supplementary payment available to them until they reach age 62, at which point they can start drawing their Social Security benefits.

The annuity automatically adjusts to be a joint-life annuity if the employee is married, unless the spouse signs a form to opt-out.

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