The Federal Employees Retirement System (FERS) pays retired federal civilian workers from three sources at once: a basic pension, Social Security, and the Thrift Savings Plan (TSP). The size of the pension comes down to one formula: your highest three years of salary, times your years of service, times 1% (or 1.1% if you retire at 62 with at least 20 years of service).

FERS was created in 1986 and took effect January 1, 1987, replacing the older Civil Service Retirement System for new hires. Here is how each piece works and when you can retire.

The three parts of FERS

1. Basic benefit plan

The basic benefit is a traditional pension: a set monthly payment for life, based on your years of service and your "high-3" salary, the average of your three highest consecutive years of earnings.

Formula: High-3 salary x years of service x multiplier (1% or 1.1%)

If you work 30 years with a high-3 salary of $70,000, your annual pension is $70,000 x 30 x 1% = $21,000 a year. Retire at 62 or later with at least 20 years of service and the multiplier rises to 1.1%, which would make the same example $23,100 a year.

2. Social Security

Federal employees under FERS pay into Social Security like private-sector workers, 6.2% of earnings up to the annual wage base, matched by the agency. Your eventual benefit depends on your earnings history and the age you claim, between 62 and 70. Because FERS employees pay into Social Security on all their federal earnings, that service counts toward the benefit the same way private-sector work does.

3. Thrift Savings Plan (TSP)

The TSP is the federal version of a 401(k). Your agency automatically contributes 1% of your basic pay whether or not you contribute anything. On top of that, it matches your own contributions: dollar-for-dollar on the first 3% of pay and 50 cents on the dollar for the next 2%. Contribute at least 5% and the total agency contribution is 5% (the automatic 1% plus a 4% match). Contributions can be traditional (pre-tax) or Roth (after-tax), and you choose among a small set of index and government-securities funds.

When you can retire under FERS

FERS has several retirement paths based on your age and years of service.

Voluntary retirement

For an unreduced pension, you need one of these combinations: your minimum retirement age (MRA) with 30 years of service, age 60 with 20 years, or age 62 with 5 years. The MRA is 55 for anyone born before 1948, rises gradually for those born from 1948 to 1969, and is 57 for anyone born in 1970 or later.

Early retirement

Early retirement is available on involuntary separation, such as a workforce reduction. You can also retire at your MRA with at least 10 years of service, but the pension is reduced by 5% for each year you are under 62 (this reduction can be avoided if you have enough service to defer the start).

Disability retirement

An employee with at least 18 months of federal civilian service who develops a disability that prevents them from doing their job may qualify for disability retirement, with income coming from all three FERS components.

Deferred retirement

If you leave federal service before you are eligible to retire but have at least 5 years of service, you can claim a deferred pension later, once you reach the age requirement.

Applying for benefits

The Office of Personnel Management (OPM) runs the retirement process. Start preparing about five years out:

• Plan ahead. Use OPM's tools to confirm eligibility and gather documentation.
• Apply on time. Submit the forms about two months before your retirement date.
• Work with your agency's HR team to finalize everything.

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Why FERS is a strong package

Even as pensions have disappeared from most of the private sector, FERS keeps one, and pairs it with Social Security and an employer-matched retirement account. The main risks are political: future changes to contain costs could affect benefits for those not yet retired.

To get the most from it, contribute at least 5% to the TSP so you capture the full match, and know how your high-3 and service years drive the pension. A Certified Financial Planner can help you time your retirement date and decide between traditional and Roth TSP contributions.

Frequently asked questions

What is the Federal Employees Retirement System (FERS)?

FERS is the retirement system for most U.S. federal civilian employees, covering the executive, legislative, and judicial branches. It provides a three-part benefit: a basic pension, Social Security, and the Thrift Savings Plan.

Who is eligible for FERS benefits?

FERS covers most civilian federal employees hired since 1984. It does not cover military personnel or state and local government workers. Eligibility for retirement depends on your age and years of service, with voluntary, early, deferred, and disability paths.

How does the Thrift Savings Plan (TSP) work?

The TSP works like a 401(k). Your agency automatically adds 1% of your basic pay, then matches your contributions up to another 4% (dollar-for-dollar on the first 3%, 50 cents on the next 2%), for a maximum agency contribution of 5%. You choose how the money is invested and whether contributions are pre-tax or Roth.

When can I retire under FERS?

For a full pension, you need your minimum retirement age (57 if born in 1970 or later) with 30 years of service, age 60 with 20 years, or age 62 with 5 years. Early retirement is possible on involuntary separation, or at your MRA with 10 years of service at a reduced pension. Disability retirement requires 18 months of service.

Can I collect both Social Security and FERS benefits?

Yes. FERS employees pay into Social Security throughout their careers and receive it in addition to the FERS pension and any TSP savings. That is the point of the three-part design.

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