What You Need to Know: Retirement Benefits

Almost all newly hired federal employees are put in a program called the Federal Employees Retirement System--people who worked for the government before 1984 and who are returning after a break in service may be put in an older program called the Civil Service Retirement System. The FERS program consists of Social Security, a civil service pension and the Thrift Savings Plan.

Employees under FERS participate in Social Security under the same terms as other American workers. They pay 6.2 percent of their salary into the Social Security trust fund. An additional 1.45 percent goes toward Medicare, which sometimes is lumped in with the Social Security deduction. The government kicks in an equal amount, just as other employers do. Employees accumulate Social Security benefits just like other workers and are eligible to draw benefits under the same terms¿full benefits beginning at age 66, reduced benefits available as early as age 62. The Social Security Administration sends out an annual estimate of benefits, and individuals may request one from that agency, www.ssa.gov, as well.

An additional contribution of 0.8 percent of salary goes into the civil service retirement trust fund, which along with government contributions pays for the civil service benefit portion. Its basic payout formula is simple: for each year of service, it pays 1 percent of your "high three" salary, the salary you earn in your highest-paid three consecutive years of employment, in most cases the last 36 months. If you work past age 62 and have at least 20 years of service, the multiplier rises to 1.1 percent.