Postal workers’ Pension Plan

Postal Workers’ Pension Plan

The U.S Government has special retirement policies or plans that cover all full-time federal workers at retirement. The type of plan and amount to be received depends basically on the position held by the individual while in service, as well as the agency he served. Some federal workers – like members of Congress – have reasonable retirement plans that will pay retirees as though they were still in active civil service. Federal employees like postal workers and others under the basic Federal Employees Retirement System (FERS) annuity plan can receive about 25 percent of their salary before they retire after 25 years of service.

The United States’ postal services offer workers benefits that include an option of American Postal Worker Union (APWU) health insurance plans and flexible spending accounts. Group life insurance, retirement benefits, and employees’ relief funds are offered to federal employees who work in the postal careers. To gain access to APWU health insurance plans, you do not have to be a member of the union.

Civil Service Retirement Plan

For workers who got employed into USPS before 1984, they are registered under the Civil Service Retirement System (CSRS); except they decide to join the Federal Employees System.  The CSRS provides retirees a better and larger yearly pension after retirement and also offers annual cost of living adjustments. However, unlike FERS account holders, you may not be eligible for the matching thrift savings and social security. A postal worker who retired with CSRS after 27 years of employment at age 57 with the average of his maximum pay he earned in three years being $54,000 will receive a yearly retirement payment of $27,135.

Federal Employees Retirement System

In the year 1987, the Federal Employee Retirement System (FERS) was introduced to stand in for CSRS. All USPS workers that started working after 1984 are enlisted in FERS. Workers who started before 1984 have the right to remain on CSRS or cross over to FERS.  With FERS, a postal employee who retired at age 58 following 27 years of work with the highest of her three years of income being $54,000 would get a yearly retirement benefit of $14,580. FERS members, be that as it may, are qualified for Social Security and can contribute up to 5 percent of their earnings to a TSP, which is coordinated by the government in a tax-deferred account. The implication is that FERS account holders can wind up with larger retirement benefits.

Drawing the Line Between CSRS and FERS

Tammy Flanagan, senior welfare executive at the National Institute of Transition Planning Inc., calls attention to the claim that CSRS is superior to FERS is not always true. You want to work out whatever ever you think is best for your particular condition. However, the available options include considering one’s contribution to TSP with FERS and the likelihood of retiring right on time under CSRS and working somewhere else for some years to meet all requirements for Social Security. Flanagan also argued that FERS workers have better control over their retirement. Interestingly, TSP funds may remain invested even after retirement, and Social Security benefits are accessible whenever after age 62.

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