CSRS vs. CSRS Offset


Q. I have worked with the understanding that I would enjoy a CSRS retirement. When I turned in a request for retirement computation, I found out that I was a CSRS Offset employee, and they began removing Social Security payments from my paycheck. I am over 55 and have worked over 30 years with the same federal company. I had a break in service to have a baby (that was back when the Family Medical Leave Act did not exist, and I had to quit and return to work as a temp for a year and then be made permanent again.

I did not know if I am expected to pay 30 years of back Social Security. Some say that CSRS should move my contributions to SS, and some say they will not. I have 17 quarters of SS. I plan on working another five years.  When I plan on retiring, I will have paid in 39.25 quarters and be 60 years old. There will be six years of payments to SS upon retirement.

I have a great fear of retiring at 60 and then, on the magic becoming of 62 years old, and huge wrench will be thrown in the works and I will have a reduced annuity from the CSRS and no annuity from Social Security. What type of proactive actions should I be taking now to resolve my anxiety?

A. According to the Office of Personnel Management, “If you were under CSRS, you would pay 7 percent of your base pay in retirement contributions, while if you were under CSRS Offset, you would pay 6.2 percent of your pay in Social Security deductions and 0.8 percent in retirement deductions, up to the Social Security maximum. For pay in excess of the Social Security maximum, you would pay 7 percent retirement deductions. You would pay the same total amount in retirement and Social Security deductions whether you were under CSRS or CSRS Offset. Consequently, if your CSRS retirement coverage is erroneous, and you are changed to CSRS Offset, the government will move some of the money from the retirement deduction account to the Social Security deduction account. This is done at no additional expense to you, so there is no expense to be reimbursed. This is true whether your CSRS deductions are adjusted for FICA by your payroll office while you are an employee, or by OPM after you separate.”

By the way, if you were to retire and not be eligible for a Social Security benefit, your CSRS annuity wouldn’t be offset. Whether or not there was an offset, the amount you’d receive would be the same, either paid directly by OPM or by OPM and the Social Security Administration.


About Author

Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to fedexperts@federaltimes.com.

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