Federal employee retirement benefits and social security

Learn if you can receive both CSRS and Social Security benefits

The Civil Service Retirement System (CSRS) is a special retirement plan for federal employees and was founded 15 years before Social Security. The CSRS was a stand-alone government pension program whose annuities were never meant to supplement Social Security benefits. Hence, federal employees can receive both CSRS annuity and Social Security benefits.

However, how much you can receive in Social Security benefits depends on the period when you worked for the federal government. This is because federal workers who contributed to the CSRS before 1984 were not charged Social Security taxes on their annuities; thus, their Social Security earnings appear blank.

What is CSRS?

The Civil Service Retirement System was founded in August 1920 as a contributory pension plan whose benefits were pre-defined. Both federal employees and federal agencies shared a responsibility to contribute towards an employee’s entitled annuities.

The federal employees covered by CSRS paid about 7 to 8 percent of their gross pay towards the CSRS, minus Social Security and survivor and disability (OASD) taxes. However, they also paid about 1.45 percent of Medicare tax.

Additionally, federal workers were able to contribute a percentage of their pay to the Thrift Saving Plan (TSP) and increase the annuity they earned by contributing no more than 10 percent of their salary to another voluntary contribution account.

Who is eligible for CSRS benefits?

The CSRS’s eligibility criteria are based on 2 main factors: age and time served as a credible federal employee. Additionally, the last position you served during the previous 2 years before retirement must also be covered by the CSRS.

If you tick off all the boxes on the eligibility criteria, you can start receiving immediate retirement benefits within 30 days after retirement. Other CSRS benefit categories include optional annuities that are applicable if you leave federal service after meeting the age and service requirements.

The other classes that may qualify you for CSRS benefits are early optional, deferred, special optional, disability and discontinued service annuities.

Can federal employees get a pension and Social Security?

CSRS was replaced by the Federal Employees Retirement System (FERS) for federal employees on January 1, 1987. It was developed to avoid duplication of benefits when federal workers wanted to receive both CSRS and Social Security without paying hefty amounts.

Now, with FERS, an employee’s retirement is covered by Social Security. Employees formerly covered by the CSRS may also convert to the new system and pay into the pension plan via payroll taxes. The FERS comprises 3 elements:

1. Social Security
2. TSP (the FERS retirement annuity)
3. Supplement

After 1983, employees who chose to remain in the CSRS could still not receive Social Security, but they have access to Medicare service due to the Medicare taxes charged on their earnings. There are several rules under the FERS program which govern how things are done.

The CSRS and Social Security offset

If you are wondering whether or not you can collect Social Security if you have a government pension, the answer is yes. The conversion of the CSRS to FERS allowed civil servants to receive both, but there is a catch.

If the federal employees retire before they are eligible for their Social Security benefits, they can receive their full pension.

However, on the day you become eligible to receive the Social Security benefits, using a CSRS offset, your pension benefits are reduced by the amount of Social Security you already received.

The CSRS and Social Security windfall elimination provision

The Windfall Elimination Provision (WEP) is a formula that is used to minimize the Social Security benefits for federal retirees who were not covered by Social Security, like the CSRS retirees. It also applies to people with substantial Social Security earnings that are less than 30 years old. The WEP aimed to do away with the unintentional advantage that would be given to government employees who could collect Social Security benefits with a non-covered pension.

The WEP formula can reduce your Social Security benefits by up to half the amount, using a revised formula. However, the revised formula can reduce your benefits by a maximum of $447.50 and can’t be used to calculate survivor benefits.

CSRS and Social Security survivor benefits

Some beneficiaries can receive Social Security and survivor benefits, depending on particular circumstances and age. For instance, a deceased’s unmarried children, whether biological or adopted, can receive monthly CSRS and Social Security benefits until they are 18. For children who are full-time students, they can continue receiving monthly benefits until they turn 22.

The amount of insurance benefits payable determines the survivor benefits. In cases where no annuities are payable, the deceased’s retirement contributions to the CSRS (and the interest) are payable to several parties. These include a designated beneficiary, a widow or widower, parent or parents, child or children or the deceased’s estate administrator.

Talk to our knowledgeable Georgia attorneys today

Navigating CSRS, FERS and Social Security benefits may be a challenging and daunting process that you do not need to go through alone.

Our Georgia attorneys at WPMH Legal can walk the journey with you, offering you valuable advice and ensuring the process is easier on you. We will help you apply for your benefits correctly, on time and won’t stop until you have received your full benefits.

Contact us today for your free consultation.

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