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June 24, 2018

Public Sector Retirement News

Federal Employee Retirement and Benefits News

Federal Employee Annuities



This article discusses how your federal retirement annuity is calculated if you are a federal employee under the Federal Employees Retirement System (FERS) or you are already retired under FERS.  It discusses both non-disability and disability federal annuity calculations.


Your basic FERS annuity is computed based on your length of service and your “high-3” average salary. To determine your length of service for computation of your FERS annuity, add all your periods of creditable service, then eliminate any fractional part of a month from the total.


When you elect to receive your FERS Annuity, your decisions will impact how much income you will receive for the rest of your lifetime.  Each employee has selections that are more advantageous than others and depending on your individual circumstances the wrong FERS Annuity selection could amount to tens of thousands dollars of lost income over your lifetime.  Make sure you consult with a Financial Professional who understands Federal employee retirement benefits before making your selection.


If you were hired under the Civil Service Retirement System (CSRS), or are retired from that system, there is a host of information available to you to understand the CSRS annuity that is due to you. This article discusses and provides references to some of that information.



Your basic CSRS annuity is computed based on your length of service (including your unused sick leave if you retire on an immediate annuity) and “high-3” average pay. The high-3 average pay includes locality pay and annual premiums for standby duty and availability, if applicable. Other pay such as differentials, overtime, allowances and others are not included.


To determine your length of service for computation of your CSRS annuity, add all your periods of creditable service, and the period represented by your unused sick leave, then eliminate from the total any fractional part of a month. Your “high-3” average pay is the highest average basic pay you earned during any three consecutive years of service. Generally, your basic CSRS annuity cannot be more than 80% of your “high-3” average pay, unless the amount over 80% is due to crediting your unused sick leave