DEFINITION of 'Federal Employee Retirement System - FERS'

A system that became effective in 1987 and replaced the Civil Service Retirement System (CSRS) as the primary retirement plan for U.S. federal civilian employees. Retirement benefits under FERS are accumulated in three ways: a) through Social Security benefits, b) through a basic benefit plan for which the employee is charged a nominal amount and c) through a Thrift Savings Plan (TSP), which comprises automatic government contributions, voluntary employee contributions and matching government contributions.

BREAKING DOWN 'Federal Employee Retirement System - FERS'

Retirement benefits under FERS are structured as annuities. Eligibility and payment amounts are based on age, years of service and contributions to the plan. Although less generous than CSRS was, FERS is more generous than many corporate plans.

Federal employees hired after 1983 are automatically covered by FERS, rather than CSRS.

RELATED TERMS
  1. Thrift Savings Plan - TSP

    A retirement savings plan created by the Federal Employee's Retirement ...
  2. Additional Voluntary Contribution ...

    An extra allocation of funds to a retirement savings account ...
  3. Agency Matching Contributions

    A benefit that federal government employees receive under the ...
  4. Agency Automatic Contributions

    A benefit that federal government employees receive for participating ...
  5. Corporate Pension Plan

    A formal arrangement between a company and its employees - or ...
  6. Unit Benefit Plan

    An employer-sponsored pension plan that provides retirement benefits ...
Related Articles
  1. Retirement

    What Is the Federal Employees Retirement System (FERS) and How Does It Work?

    If you work in the public sector or plan to, FERS ( Federal Employees Retirement System) is an acronym you will soon know well.
  2. Retirement

    Work for the Government? Top Retirement Strategies

    Government employees don't receive Social Security and 401(k)s for their government work. Learn about other tools to plan for a good retirement.
  3. Retirement

    How the Congressional Retirement Plan Compares to the Average

    There are more retirement plan options for a member of United States Congress than for the average average citizen.
  4. Financial Advisor

    What's a Qualified Retirement Plan?

    Employers establish qualified retirement plans to help their employees save money.
  5. Retirement

    5 Lesser-Known Retirement And Benefit Plans

    These plans aren't widely used, but they fill a specific niche for employees in certain situations.
  6. Retirement

    Is a SIMPLE IRA Right for Your Small Business?

    Here's how small businesses can benefit from offering a SIMPLE IRA to their employees.
  7. Retirement

    How We Can Help Close the Retirement Savings Gap

    The majority of Americans are not very confident about having enough for retirement.
  8. Retirement

    This Is Why Your Employer Should Offer a 401(k)

    Understand the unique benefits that come with a small business offering a retirement savings plan such as a 401(k) to current and future employees.
  9. Financial Advisor

    Overhaul Social Security to Fix Retirement Shortfall

    There are several theories and ideas about how we can make up for the $6.6 trillion retirement savings shortfall in America. Adjustments to Social Security and our retirement savings plans are ...
  10. Retirement

    Retire? Me? Smart Strategies For Business Owners

    Retiring successfully if you're a small business owner requires both an exit strategy and a good retirement plan. Here's how to get started.
RELATED FAQS
  1. What are qualified retirement plan types?

    Understand the different types of qualified retirement plans and what they mean in terms of employee and employer contribution ... Read Answer >>
  2. How can an entrepreneur save for retirement?

    Learn about the retirement savings plan options for entrepreneurs and small business owners, including administration and ... Read Answer >>
Hot Definitions
  1. Straddle

    An options strategy in which the investor holds a position in both a call and put with the same strike price and expiration ...
  2. Trickle-Down Theory

    An economic idea which states that decreasing marginal and capital gains tax rates - especially for corporations, investors ...
  3. North American Free Trade Agreement - NAFTA

    A regulation implemented on Jan. 1, 1994, that eventually eliminated tariffs to encourage economic activity between the United ...
  4. Agency Theory

    A supposition that explains the relationship between principals and agents in business. Agency theory is concerned with resolving ...
  5. Treasury Bill - T-Bill

    A short-term debt obligation backed by the U.S. government with a maturity of less than one year. T-bills are sold in denominations ...
  6. Index

    A statistical measure of change in an economy or a securities market. In the case of financial markets, an index is a hypothetical ...
Trading Center