Federal Employee's CSRS & FERS Federal Civil Service Retirement
& Financial Planning Resources
CSRS Offset Menu
If you have CSRS Offset coverage, the regular CSRS rules described in the
CSRS Eligibility Section about when you
can receive retirement benefits, how the benefit is computed, and
cost-of-living adjustments apply to you. Also, the rules for participating
in the Thrift Savings Plan are the same for both CSRS and CSRS Offset
employees.
What is different for CSRS Offset employees is the fact that you are
paying Social Security taxes and earning a Social Security benefit at the
same time that you are paying CSRS deductions and earning a CSRS annuity.
However, instead of paying 6.2% of pay for Social Security plus 7.0% for
CSRS, the Social Security tax is subtracted from, or offset, from the 7.0%
for CSRS. The amount you pay for CSRS in 1998 is .80% of your basic pay. If
your total pay in a year exceeds the maximum amount that is subject to
Social Security taxes ($110,100 in 2012), the Social Security deduction
stops and your CSRS deduction increases to 7.0% of your basic pay. Thus, you
pay the same 7.0% cost for retirement as a CSRS employee, but the amount is
divided between CSRS and Social Security.
When you retire, your annuity is computed under the same rules that apply
to all CSRS employees. However, when you become eligible for Social Security
benefits (normally at age 62), your CSRS benefit is reduced, or offset, by
the value of your CSRS Offset service in your Social Security benefit.
If you want to estimate the amount of the offset from your future annuity,
see these instructions.
Note: If you do not become eligible for any Social Security
benefit, there is no offset.
You receive the value of the CSRS benefit formula and cost-of-living
adjustments, but pay a smaller amount for this benefit. You also enjoy the
flexibility of having Social Security coverage that continues to build if
you leave the Federal Government to work elsewhere.
If you leave the Federal Government before retirement, the same drawbacks
that apply to CSRS employees who leave early also apply to you. However, you
have paid far less for your benefit and your Social Security benefit is
portable.
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