Retirement
Programs
The Federal Employees Retirement System (FERS) is a
three-tiered plan to provide retirement, disability and survivor
benefits for employees and their dependents. In addition to
Social Security benefits as a base, FERS offers both an annuity
that grows with length of service and a tax-deferred savings
plan, the Thrift Savings Plan (TSP). Employees pay less than one
percent of salary to qualify for the FERS annuity and are fully
vested after five years of service, and for disability benefits,
after just 18 months.
Thrift Savings Plan
The Thrift Savings Plan (TSP) is a retirement savings and
investment plan for Federal employees. Congress established the
TSP in the Federal Employee's Retirement System Act of 1986. The
purpose of the TSP is to provide retirement income. It offers
Federal civilian employees the same type of savings and tax
benefits that many private corporations offer their employees
under "401(k)" plans. The TSP is a defined contribution plan.
The retirement income that an employee receives from the TSP
account will depend on how much the employee has contributed to
the account during the employee's working years and the earnings
on these contributions. The contributions that the employee
makes to the TSP account are voluntary and are separate from
contributions to the FERS Basic Annuity. The Thrift Savings Plan
allows employees to invest up to the IRS limit of salary. The
Government contributes one percent of salary to employees who do
not contribute and will match up to another four percent of
salary for employees who do contribute. Because the savings plan
is tax-deferred, no income tax is due on either the employee's
contributions or the Government matching funds, or the earnings
on those amounts until withdrawal. Employees can choose to
invest in any of six funds, or to spread investments across six
funds - a Government securities fund, a bond fund, a stock fund,
a small capitalization stock fund, lifecycle fund and an
international stock fund.
For more information, check out this site: http://www.opm.gov/retire/
Bonds
Employees may elect to authorize payroll deductions for U.S.
Savings bonds. NOTE: All elected employee contributions for
FEHB, FEGLI, and retirement (including TSP) coverages are
automatically deducted biweekly from the employee's salary.