Civil Service Retirement System (CSRS)

1. Civil Service Retirement System (CSRS) Eligibility Requirements: AgeYears Optional 55 30 60 20 62 5 Early Optional/Discontinued Service 50 20 Any Age 25 Disability Any Age 5 Deferred 62 5

2. Civil Service Retirement System (CSRS) Elements of the CSRS Annuity: • High 3-Average Salary • Normally the last 3 years of employment • Service Computation Date • Includes all ‘creditable’ service • Unused Sick Leave will be added to compute the annuity

3. Civil Service Retirement System (CSRS) – Non-deduction Service Questions to ask prior to retirement: Non-Deduction Service: Did you have unpaid service before 10/1/82? Did you have unpaid service after 10/1/82? Did you have Post-1956 military service? Refunded Service Do you have refunded service before 10/1/90? Do you have refunded service after 10/1/90?

4. Civil Service Retirement System (CSRS) – Non-deduction Service Unpaid service prior to 10/1/82: • Service counts toward eligibility for retirement; and, • Service is used to compute the annual annuity; but, • The annuity is reduced (this is usually a negligible amount) Unpaid service after 10/1/82: - Credit is given for eligibility only - Service is not counted in the computation of the annuity

5. Civil Service Retirement System (CSRS) – Non-deduction Service Post 1956 Military Service and you were hired prior to 10/1/82: - Service counts toward eligibility for retirement; and - Service is used to compute the annuity; however, - If at age 62, you become eligible for social security, and you have not made a deposit for your military service into the retirement fund, your civil service annuity will be re-computed and the military service will be dropped from the computation

6. Civil Service Retirement System (CSRS) – Non-deduction Service Post 1956 Military Service and you were hired after 10/1/82: - You must make a military service deposit before you may use your military service time for retirement purposes (for CSRS, deposit is 7% of your total military earnings plus interest

7. Civil Service Retirement System (CSRS) – Refunded Service Refunded service that ended before October 1, 1990: • The period of refunded service is creditable for retirement eligibility; and • For the retirement benefit computation; however, • The benefit will be actuarially reduced by an amount equal to the amount of the redeposit, including interest compounded annually to the date of retirement • For refunded service prior to 10/1/82, the interest is 3% per year compounded annually • For refunded service after 10/1/82, the interest is 3% per year through 12/31/84 and at a variable rate beginning 1/1/85

8. Civil Service Retirement System (CSRS) – Refunded Service For refunded service after September 30, 1990: • Employee must make the redeposit prior to retirement in order to receive credit for the refunded service

9. Civil Service Retirement System (CSRS) - Sick Leave • Unused sick leave is NOT included in service for determining eligibility for retirement • Credit for unused sick leave is added to length of service in computing the annuity • Credit for time is computed on the basis of 2087 hours per work year and based upon whole month units • Days are converted to months and years (30 days = 1 month); on our current retirement program, any days that do not total 30 are converted to hours and any hours that are not used would be dropped

10. Civil Service Retirement System (CSRS) - Annual Leave • You will receive a lump sum payment for annual leave normally the 2nd pay period after you retire • Hourly rate multiplied by the number of hours of annual leave • The annual leave lump sum will be taxed (28%) when received

11. Civil Service Retirement System (CSRS) • The commencing date of most annuities is the first day of the month after pay ceases • On a voluntary separation and you are in a pay status for three days or less in the month of retirement, your annuity will commence no later than the day after pay ceases, i.e., if you retire on the 1st, 2nd, or 3rd day of the next month, you annuity will begin to accrue the 2nd, 3rd, or 4th respectively

12. Civil Service Retirement System (CSRS) –Annuity Computations The amount of the annuity depends on: • High-3 Average Salary; and • Length of creditable service Example of a 30-year career computation: 1.50% x first 5 years = 7.5 1.75% x next 5 years = 8.75 2% x remaining years (20) = 40 56.25% of your High-3 Salary

13. Civil Service Retirement System (CSRS) Survivor Benefits: • Maximum benefit is 55% of the survivor’s annuity • Can elect any percentage or dollar amount less than full • Anything less than full requires the notarized consent of the spouse • Can elect no survivor benefits at all • If spouse will need health insurance, you need to elect some form of a survivor annuity

14. Civil Service Retirement System (CSRS) Taxation of Benefits: Federal Tax: • Automatically will withhold at married plus 3 rate unless you make a different election at the time of retirement State Tax: • Illinois excludes the full amount of the CSRS pension from State Income Tax

15. Civil Service Retirement System (CSRS) Federal Employees Health Benefits (FEHB) Insurance: • Must have had for the preceding 5 years leading up to retirement or at the first opportunity to enroll Federal Employees Group Life Insurance (FEGLI): • Must have had Basic for the preceding 5 years leading up to retirement or at the first opportunity to enroll • Same for the optional insurance