FERS Retirement

For military members transitioning to federal civilian employment, the Federal Employees Retirement System (FERS) offers retirement benefits, including a pension, Social Security, and the Thrift Savings Plan (TSP), and allows for the “buy-back” of military service for retirement credit. 

FERS is a retirement plan for federal employees, including those in the executive, legislative, and judicial branches, and it’s separate from military retirement. 

FERS and Active Military:
If you are receiving active military retirement pay you can only receive credit for military service (Military Service Buy-Back) in your FERS retirement computation if it was awarded due to a service-connected disability. Otherwise FERS does not allow veterans who are receiving active-duty retirement pay to participate in the Military Service Buy-Back program. However, active military personnel who retire from active duty can still be hired as a GS employee under the FERS system and obtain a FERS retirement at age 62 with 5 years of service or at age 60 with 20 years of service. You need a minimum of 5 years in FERS.

FERS and Reserve Military:
If you are serving in the Reserves, you can participate in the Military Service Buy-Back program as a FERS employee. This will allow you to keep your Reserve Retirement pay and also obtain a FERS retirement pay.

How does the Military Service Buy-Back Program Work:

Military Service Buy-Back: Veterans make a deposit into a civilian annuity covering their military service. 

Buy-Back Cost: Typically, the cost of military service buyback for federal retirement plans is 3% of the base pay earned during military service. 

Buy-Back Benefits: Increasing the years used to calculate your retirement annuity under FERS results in a higher monthly payout. 

Minimum Service Requirement: To qualify for retirement under FERS, a minimum of five years of service must be creditable civilian federal employment. 

FERS and Social Security:
Employees covered under FERS pay into Social Security just as people working in the private sector do. 

Thrift Savings Plan (TSP):
The TSP is a retirement savings plan similar to a 401(k) with tax benefits and savings opportunities.