Key Takeaways
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The Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS) follow very different benefit structures, and understanding them is essential when planning your retirement in 2025.
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Even though CSRS is closed to new enrollees, its legacy rules still significantly impact those retiring today, especially when comparing benefits, Social Security, and survivor options.
Understanding the Foundations of CSRS and FERS
The Civil Service Retirement System (CSRS) was established in 1920 and served as the primary retirement plan for federal employees
- Also Read: Postal Employees, Big Changes Are Coming to Your Benefits in 2025—Here’s What You Need to Watch Out For
- Also Read: Military Buyback Programs Explained: Here’s How Federal Employees Can Use Them to Boost Their Pensions
- Also Read: Joining Civilian and Military Benefits—Why It’s the Best Move You’ll Make for Retirement
In 2025, only a small fraction of government employees are still under CSRS, but those retiring today still need to understand how its rules differ from FERS. These distinctions affect retirement income, survivor benefits, Social Security eligibility, and how your annuity is calculated.
1. Your Retirement Income Sources Vary
CSRS operates as a standalone pension plan, meaning your retirement income primarily comes from your CSRS annuity. This is in contrast to FERS, which is structured around three sources:
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A basic FERS annuity
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Social Security
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The Thrift Savings Plan (TSP)
Because CSRS employees don’t pay into Social Security (unless they have substantial non-CSRS earnings), they typically won’t receive full Social Security benefits. On the other hand, FERS employees contribute to Social Security throughout their careers.
CSRS
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One defined benefit annuity
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No automatic Social Security coverage
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No government contributions to TSP
FERS
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Three-part retirement: FERS annuity, Social Security, and TSP
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Full Social Security coverage
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Matching TSP contributions up to 5% from the agency
2. Your Contributions During Employment Differ
Under CSRS, you contributed around 7% to 8% of your pay toward your retirement annuity, but you didn’t contribute to Social Security. That means more went directly toward your pension.
FERS employees contribute less to their annuity (around 0.8% to 4.4%, depending on hire date) but also contribute to Social Security and may make voluntary contributions to their TSP accounts.
CSRS Contributions
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Higher annuity contributions
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No Social Security taxes unless covered under CSRS Offset
FERS Contributions
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Lower annuity contributions
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Social Security taxes deducted
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Optional TSP contributions with agency matching
3. Annuity Calculations Aren’t the Same
Your annuity under CSRS is calculated using a formula that provides a more generous benefit than the FERS formula. This is one of the reasons CSRS retirees tend to receive larger pensions.
CSRS Annuity Formula
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1.5% x high-3 average salary x first 5 years of service
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1.75% x high-3 x next 5 years
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2.0% x high-3 x remaining years
FERS Annuity Formula
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1.0% x high-3 x years of service (1.1% if age 62+ with 20+ years)
In 2025, your “high-3” salary is still defined as your highest average basic pay over any three consecutive years. FERS annuities are lower but are meant to be supplemented with Social Security and TSP withdrawals.
4. Social Security Eligibility
This is one of the biggest functional differences. If you’re under CSRS and didn’t pay into Social Security for at least 10 years in other employment, you won’t qualify for benefits. Even if you do qualify, the Windfall Elimination Provision (WEP) used to reduce Social Security benefits for CSRS retirees. However, WEP was repealed in January 2025, allowing CSRS retirees to receive full Social Security benefits if otherwise eligible.
FERS employees are fully integrated with Social Security. You earn credits with each year of work, and your Social Security benefit in retirement reflects your full career earnings.
5. Survivor and Spousal Benefits
Under CSRS, survivor benefits must be elected at retirement and result in a reduction to your annuity. FERS also requires an election, but the structure is more uniform.
CSRS Survivor Options
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Up to 55% of unreduced annuity to spouse
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Election reduces your monthly benefit
FERS Survivor Options
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50% of unreduced annuity (standard option)
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Full and partial elections available
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Spousal consent required for reductions or waivers
In both systems, failure to elect a survivor benefit could leave your spouse without continued income.
6. Cost-of-Living Adjustments (COLAs)
COLAs are handled differently. CSRS retirees receive full COLAs based on the Consumer Price Index (CPI). FERS retirees receive COLAs only after age 62 and with a formula that may reduce the adjustment when inflation is between 2% and 3%.
CSRS COLAs
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Full COLA annually, regardless of age
FERS COLAs
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Start at age 62
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If inflation is between 2% and 3%, COLA is reduced by 1%
This means CSRS annuities tend to maintain purchasing power more effectively over time.
7. Retirement Eligibility Rules
The eligibility rules for retirement differ depending on the system you’re in. In 2025, these thresholds still apply:
CSRS Retirement Eligibility
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Age 55 with 30 years of service
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Age 60 with 20 years
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Age 62 with 5 years
FERS Retirement Eligibility
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Minimum Retirement Age (MRA, between 56 and 57) with 30 years
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Age 60 with 20 years
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Age 62 with 5 years
FERS also offers an MRA+10 option, allowing retirement at MRA with 10 years, though your annuity is reduced unless you delay receipt.
8. Early Retirement Options
FERS provides more structured early retirement options, such as Voluntary Early Retirement Authority (VERA) and MRA+10. CSRS also has early retirement, but with fewer formal pathways and more reliance on agency-specific offers.
FERS employees under certain law enforcement or firefighter positions may also retire earlier due to special provisions.
9. TSP Considerations
TSP plays a key role in FERS but is optional and without matching for CSRS. That means CSRS employees tend to rely almost entirely on their annuity. FERS employees, by contrast, must think carefully about investment risk, withdrawal strategies, and required minimum distributions starting at age 73.
In 2025, TSP catch-up contributions and automatic enrollment features still apply, giving FERS participants additional tools for building retirement income.
10. Disability and Sick Leave Credit
Both systems give credit for unused sick leave toward your annuity calculation. But the rules vary:
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CSRS: Unused sick leave adds directly to service credit.
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FERS: Same benefit, but only applies if you retire with eligibility for an immediate annuity.
Disability retirement is available under both systems, but under different eligibility criteria and benefit formulas.
11. Switching Systems Was Once an Option
From 1987 to 1988, eligible employees were allowed to switch from CSRS to FERS. Some who switched to FERS are known as “TransFERS” employees and have blended benefits. If you’re in this group, you’ll need to carefully examine both components of your retirement.
12. Long-Term Financial Security
CSRS offers a steady, predictable income, while FERS provides more flexibility with growth potential through TSP and Social Security. In 2025, inflation protection, investment planning, and health coverage coordination are all essential parts of the retirement picture.
You need to assess your priorities—whether guaranteed income, flexibility, or survivor protection matters more to you.
Why These Differences Still Matter in 2025
Whether you’re about to retire under CSRS or FERS, or you’re advising a spouse or family member, these distinctions affect more than just your annuity. They impact tax planning, survivor decisions, Social Security expectations, and withdrawal strategies.
With ongoing federal retirement reform proposals, it’s important to stay informed about how legislation might affect your benefits moving forward.
Make Your Retirement Plan Work for You
Understanding the legacy of CSRS and the flexibility of FERS is crucial to building a retirement strategy that supports your goals. In 2025, both systems are still active for retirees, and your planning must reflect the rules and nuances of the system you’re in.
If you’re unsure how these differences impact your retirement income or survivor benefits, speak with a licensed agent listed on this website for professional advice tailored to your situation.
