Following are a variety of pay and benefits figures to keep in mind in 2013:
Salary cap. The biweekly pay of General Schedule and some other employees cannot exceed the greater of:
- The biweekly pay for GS-15, step 10, including any applicable locality payment or special rate supplement.
- The pay for Level V of the Executive Schedule, which is $145,700.
This is a two-edged sword for top-paid employees because not only is their pay capped, but their high-three, the average of their three highest paid years of salary used in their retirement calculations, will not grow as it might without the cap.
Social Security maximum wage base. Social Security (FICA) taxes are deducted from your pay if you are covered by either the Federal Employees Retirement System or the Civil Service Retirement System Offset. There is an upper salary limit from which those deductions can be taken. In 2013, that maximum taxable wage is $113,700.
If you are a FERS employee who reaches that point, your take-home pay for the rest of the year will increase.
However, if you are a CSRS Offset employee, your take-home pay won’t change.
Here’s why: Up to the point when you reach the maximum taxable wage, 6.2 percent of your pay goes to Social Security and 0.8 percent to CSRS. But after you reach the maximum taxable wage, all 7 percent will go to CSRS.
Thrift Savings Plan elective deferral limit. For 2013, the maximum you can contribute to your TSP account is $17,500. In addition, if you are 50 or older, you can make tax-deferred “catch-up” contribution of $5,500.
Interest rates. Interest is charged when you make a deposit to the federal retirement fund to get credit in your annuity calculation for such service as active-duty military and periods of federal employment during which deductions weren’t taken from your pay. Interest is also charged if you redeposit to the fund after leaving the government with a refund of your retirement contributions.
From 1948 through 1984, the interest rate was 3 percent. Since 1985, those interest rates have fluctuated, from a high of 11.25 percent in that first year to a low in 2013 of 1.625 percent.
Starting roughly two years after you are employed by the federal government, interest begins to accrue yearly until the day you pay off the deposit.
So, for example, if you were hired in 1986, in 1988 interest would begin to accrue at 8.275 percent; in 1989, it would rise to 9.125 percent; and so on.
Military deposits. The amount an employee must deposit to get credit for military service toward federal retirement has remained stable for most years since 1982, when they were first required to be paid: 7 percent basic military pay, not including allowances or differentials, for CSRS and 3 percent for FERS. However, during a budgetary upheaval in the late 1990s, the interest rates were increased. So, if you were on active-duty service in 1999, the CSRS rate for buying back that time is 7.25 percent and the FERS rate is 3.25 percent. For 2000, rates are 7.40 percent and 3.40 percent. Since 2000, rates have reverted to 7 percent and 3 percent.
