The retirement plan for federal employees is known as the Federal Employees Retirement System (FERS). FERS is a three-tiered retirement plan that includes a basic pension, Social Security benefits, and the Thrift Savings Plan (TSP). Here are the key features of each tier:
1. Basic Pension: The basic pension is a defined benefit plan that provides a monthly annuity based on the employee's years of service and highest average salary. The formula for calculating the pension amount is based on a percentage of the employee's average salary and years of service.
2. Social Security Benefits: Federal employees also participate in the Social Security system and are eligible to receive Social Security benefits in addition to their basic pension. The amount of Social Security benefits received depends on the employee's earnings history and the age at which they choose to start receiving benefits.
3. Thrift Savings Plan (TSP): The TSP is a defined contribution plan that allows federal employees to save for retirement through payroll deductions. Employees can contribute a portion of their salary to the TSP, and the government may also provide matching contributions. The TSP offers a variety of investment options, including index funds and lifecycle funds, to help employees grow their retirement savings.
It's important to note that the FERS retirement plan is only available to federal employees hired after 1983. Prior to 1984, federal employees were covered by the Civil Service Retirement System (CSRS), which had different rules and benefits.
For more detailed information on the Federal Employees Retirement System, you can visit the official website of the Office of Personnel Management (OPM). They provide comprehensive resources and guidance on retirement planning for federal employees.
I hope this helps! Let me know if you have any other questions.