This video serves as a comprehensive guide to retirement deductions for both CSRS and FERS employees, elucidating the distinctions in contributions and eligibility based on the period of government service. The narrator introduces different employee categories, namely CSRS, regular FS, FSRA, and FSF, providing specific examples for each to offer a thorough understanding of their respective retirement deductions.
For CSRS employees, exemplified by Ken, who started in 1982, approximately 7% of after-tax wages are deducted for retirement contributions. CSRS employees generally do not pay social security tax but contribute to the Medicare tax. The maximum benefit from CSRS is 80% of the high three average salary plus credit for sick leave.
Regular FS employees, represented by Megan, pay 7% of base pay for retirement contributions, with 0.8% going to FRS and 6.2% to Social Security. This also applies to FS transferees who were CSRS employees for at least 5 years.
Naomi, an FSRA employee, started in 2013, with deductions of 9.3% of base pay, allocating 3.1% to FS and 6.2% to Social Security. The main difference lies in retirement contributions between FS and FSRA employees.
Frank, an FSF employee who joined in 2014, contributes 10.6% of base pay, with 4.4% to FS and 6.2% to Social Security. Exceptions apply to rehired employees after a break in service with at least 5 years of prior service.
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