CSRS vs. FERS: Understanding Federal Retirement Systems

In short: which retirement system you have depends on when you were hired by the Federal government. 

If you were hired on or after January 1, 1987, you’re almost certainly covered by the Federal Employees Retirement System (FERS). If you began Federal service before then, you’re likely covered by the Civil Service Retirement System (CSRS) unless you’ve since transitioned to FERS. 

Today, the overwhelming majority of Federal employees are covered by FERS. Since CSRS closed to most new hires nearly four decades ago, many employees will never have to choose between the two systems. Even so, understanding the differences can help you better understand your benefits and make more informed retirement planning decisions. 

Explore WAEPA’s free comprehensive, highly-detailed Federal retirement guide >

What are CSRS and FERS? 

Both CSRS (Civil Service Retirement System) and FERS (Federal Employees Retirement Systems) are retirement systems for Federal employees. They share the same goal of providing income to Federal employees through retirement. 

As you likely know, retirement benefits are a primary focus of Federal service, as the government historically has prioritized competitive benefits in order to attract and retain talent. 

About the Civil Service Retirement System (CSRS) 

Established in 1920, the Civil Service Retirement System served as the primary retirement program for Federal employees until the late 1980s. 

CSRS is primarily a defined benefit pension to replace income in retirement. Employees contribute throughout their careers in exchange for a lifetime annuity after retirement.  

Most CSRS employees did not pay Social Security retirement taxes during their Federal careers, meaning Social Security generally isn’t a major part of their retirement income.  

CSRS can increase their earned annuity by contributing to a Thrift Savings Plan, although there is no government contribution. 

About the Federal Employees Retirement System (FERS) 

Congress created the Federal Employees Retirement System in 1986, and it became effective on January 1, 1987. Nearly all Civilian Federal Employees hired after that date are covered by FERS.  

Unlike CSRS, FERS is built around three sources of retirement income: 

• A Basic Benefit Plan 
• Social Security  
• The Thrift Savings Plan (TSP) 

Together, these three components are designed to provide retirement income while giving employees greater flexibility throughout their careers.  

How Do I Know if I Have CSRS or FERS? 

For most Federal employees, determining your retirement system is easier than you’d think. 

• If you were hired before January 1, 1987, you’re probably covered by CSRS (or CSRS offset) 

If you’re unsure, you can check your SF-50 (Notification of Personnel Action). Block 30 lists your retirement coverage code.  

CSRS vs. FERS: Key Differences 

Feature	FERS	CSRS
Covers most current Federal employees	Yes	No
Includes Social Security	Yes	Generally no
Includes government TSP contribution	Yes, automatically 1%	No
Includes government TSP match	Up to 5% match	No
Primary retirement income	Annuity + Social Security + TSP	Annuity
Portability if you leave Federal service	Yes	Limited

Is CSRS Better than FERS? 

You’ll often hear longtime Federal employees describe CSRS as the “better” retirement system. 

That’s because the pension, or basic benefit annuity, is calculated with a more generous formula. 

However, FERS was designed to offer greater flexibility to fit changing employee needs and offers its own advantages, including portability and TSP contribution matching. 

CSRS and FERS Pension Formulas 

Both CSRS and FERS calculate retirement using your high-three average salary and years of service. Where they differ is the multiplying factor, with CSRS offering a higher factor. 

The CSRS pension formula provides: 

• 1.5% of your high-three average salary for each of your first five years of service  
• 1.75% for each of your next five years  
• 2% for each year after that  

Over a full Federal career, this produces a comparatively generous lifetime annuity or pension. 

FERS also uses your high-three average salary but applies a smaller multiplier. 

For most employees, the formula is: 

1% × High-three average salary × Years of creditable service 

Employees who retire at age 62 or older with at least 20 years of service receive a slightly higher 1.1% multiplier.  

You can use this FERS calculator to estimate your Federal retirement pension.  

This means the pension portion alone is generally smaller than a comparable CSRS pension. 

However, FERS was designed so that a retiree was not relying solely on annuity payments. Instead, retirement income is expected to come from three sources: 

• Basic pension  
• Social Security  
• Thrift Savings Plan savings  

What Advantages Does FERS Offer? 

As mentioned, while the basic benefit or pension itself is smaller with FERS than CSRS, FERS offers advantages that reflect how many people build careers today. 

Portability 

One of FERS’ biggest strengths is flexibility. 

If you leave Federal service before retirement, your TSP remains yours. Depending on your situation, you may roll those savings into another qualified retirement account—such as a 401(k) or IRA—or leave them invested in the TSP. Employees with sufficient creditable service may also qualify for a deferred FERS annuity later in life.  

As the Federal landscape changes, employees considering a transition to the private sector can benefit greatly from this portability. 

Related Resource: Leaving Federal Service? Protect Your Benefits, Coverage, and Financial Future During the Transition > 

Government Matching Contributions 

Unlike CSRS, FERS includes government contributions to the Thrift Savings Plan, which is a key component of Federal retirement planning 

Agencies automatically contribute 1% of basic pay and match employee contributions up to 5%, helping employees grow retirement savings throughout their careers.

• The first 3% is matched dollar-for-dollar 
• The next 2% is matched at 50% on the dollar 

Combined, the automatic 1% contribution and matching contributions can result in up to 5% in total Government contributions, provided you contribute enough to receive the full match. 

Social Security Coverage 

FERS employees also pay into Social Security throughout their Federal careers. 

Instead of relying almost entirely on a pension, retirement income comes from multiple sources. This diversification can provide greater flexibility, particularly for employees whose career paths include both Federal and private-sector employment. 

Retirement Planning Beyond CSRS or FERS

Whether you’re covered by CSRS or FERS, planning for your finances in retirement can feel overwhelming. You may not know how you’ll replace your pre-retirement income, and whether your savings will support the lifestyle you want. 

The good news is that retirement planning isn’t just about growing your nest egg. It’s also about preparing for how you’ll use it. 

Some of that preparation happens years before retirement through consistent saving and making the most of benefits like the Thrift Savings Plan. Some of it comes later, as you adjust your spending habits, account for changing healthcare costs, and prepare for the unexpected expenses that can arise during retirement. 

WAEPA’s free Saving for Retirement Guide offers several strategies and actionable steps for saving for retirement, regardless of where you might be in your saving journey.  

For more resources, wherever you are in your retirement planning journey, explore our free library of Federal retirement planning resources.  

Frequently Asked Questions

When did FERS replace CSRS? 

FERS became effective on January 1, 1987. Nearly all Civilian Federal Employees hired after that date are automatically covered under FERS.  

Is CSRS better than FERS? 

Neither system is universally better. 

CSRS generally provides a larger annuity payment or pension, while FERS combines a pension with Social Security and the Thrift Savings Plan, which can grant more flexibility. 

Can I choose between CSRS and FERS? 

Most current Federal employees cannot. 

Retirement coverage is generally determined by when you entered Federal service. 

Why is the FERS pension smaller? 

Because FERS was designed as a three-part retirement system. 

Rather than relying solely on a pension, FERS combines a Basic Benefit annuity payment with Social Security and the Thrift Savings Plan to create retirement income.  

Is FERS portable if I leave Federal service? 

In many ways, yes. 

Your Thrift Savings Plan remains yours if you leave Federal service, and depending on your circumstances, you may be able to roll those funds into another qualified retirement account or leave them invested in the TSP.  

Employees with sufficient service may also qualify for a deferred FERS annuity later in life.