The Federal Employees Retirement System, or FERS, became effective January 1, 1987. Almost all new employees hired after December 31, 1983, are automatically covered by FERS. Certain other Federal employees not covered by FERS have the option to transfer into the plan. FERS is a three-tiered retirement plan including the following components: 1. Social Security Benefits 2. Basic Benefit Plan 3. Thrift Savings Plan   You pay full Social Security taxes and a small contribution to the Basic Benefit Plan. In addition,...

You’ve probably heard the Benjamin Franklin once said “The only certain things in life are death and taxes.” But that doesn’t tell you exactly how much you’ll pay in taxes, so how is your retirement income taxed for federal income tax purposes? Let’s take a look. Most of your CSRS or FERS pension will be taxable. Because your retirement annuity was already taxed, the payments you receive will not be taxable again. Unfortunately, you receive the annuity spread out over your life expectancy. For a federal employee...

Fewer federal employees filed for retirement in December than in any other month in 2012, according to the Office of Personnel Management. The number of claims filed — 5,152 — fell well below OPM's projections of 7,000 claims. Despite fewer claims than expected, the agency failed to meet its goal of processing 11,500 claims, and only managed to complete 10,454. December marked only the second time in 2012 the agency failed to hit its processing target. The agency also fell short of its goal in April. Overall, retirement...

Federal negotiators stuck a deal in mid-February to significantly increase future federal employees' retirement contributions which will help pay for an extension is unemployment benefits. According to the American Federation of Government Employees, newly hired and rehired federal employees would have 3.1% of each paycheck put toward their Federal Employees Retirement System pensions. The current contribution rate is only 0.8%, so that amounts to a 2.3% increase. The increase will affect new hires and rehires beginning...