Federal employees receive a pension, but Social Security works differently for them than for other workers

Most federal employees hired after 1983 pay into Social Security like other workers and will receive Social Security benefits when they retire. However, two things make their situation different from a private-sector worker's: they are covered by the Federal Employees Retirement System (FERS), which includes a pension separate from Social Security, and they may face a reduction in their Social Security benefit if they also receive a government pension.

Federal employees hired before 1984 are covered by the Civil Service Retirement System (CSRS), an older pension program that does not involve Social Security contributions at all. Those employees do not pay into Social Security and do not receive Social Security benefits based on their federal work.

The key point: whether you get both a pension and Social Security depends on which retirement system covers you and when you were hired.

Key Takeaways

  • Federal employees hired after 1983 are covered by FERS, which includes both a pension and Social Security contributions.
  • Federal employees hired before 1984 are covered by CSRS, which is a pension-only system with no Social Security component.
  • FERS employees may see their Social Security benefit reduced if they also receive a non-covered government pension from another employer.
  • A FERS pension is calculated differently than Social Security and is paid by the federal government, not the Social Security Administration.
  • CSRS employees receive no Social Security benefit based on their federal service, even if they worked long enough to meet the requirement.

How FERS combines a pension with Social Security

Under FERS, your retirement income comes from three sources: a basic pension paid by the federal government, your Social Security benefit, and any money you saved in the Thrift Savings Plan (TSP), which is the federal equivalent of a 401(k).

You contribute to Social Security through payroll deductions just as a private-sector worker does. When you retire, you will receive both your FERS pension check and your Social Security check. The two are separate — your FERS pension does not reduce your Social Security benefit, and vice versa. Your FERS pension is based on your years of service and your salary; your Social Security benefit is based on your lifetime earnings record and the age at which you claim.

Most FERS employees must work until age 57 with at least 30 years of service, or until their Minimum Retirement Age (which ranges from 55 to 57 depending on birth year) with at least 20 years of service, to retire without a penalty. The exact rules depend on your hire date and job category.

How CSRS works without Social Security

CSRS is a closed system: no federal employees have been hired into it since 1983. If you are covered by CSRS, you never paid into Social Security during your federal career, and you will not receive a Social Security benefit based on that work.

Instead, your entire retirement income comes from your CSRS pension, which is typically higher than a FERS pension for the same length of service. A CSRS employee with 30 years of service receives 56.25% of their average salary; a FERS employee with 30 years receives 30% of their average salary. The difference reflects the fact that CSRS employees do not have Social Security as a backup.

If a CSRS employee worked in other jobs and paid into Social Security, they may receive a Social Security benefit based on that non-federal work. However, the Government Pension Offset (GPO) may reduce that benefit — a rule that applies to anyone receiving a government pension not covered by Social Security.

The Government Pension Offset and how it affects your Social Security

The Government Pension Offset is a federal rule that reduces your Social Security spousal or survivor benefit if you also receive a pension from work not covered by Social Security. This affects CSRS employees and some FERS employees in specific situations.

For example: a CSRS employee who never paid into Social Security retires and receives a CSRS pension of $2,000 per month. That employee's spouse worked in the private sector and is receiving Social Security. The CSRS employee may be may have access to to a spousal benefit based on the spouse's earnings record, but the GPO will reduce that benefit by two-thirds of the government pension amount. In this case, two-thirds of $2,000 is about $1,333, so the spousal benefit would be reduced by that amount.

FERS employees are usually not affected by the GPO because they paid into Social Security during their federal career. However, if a FERS employee also receives a pension from another government job (such as a state or local job) that was not covered by Social Security, the GPO may explore to that second pension.

The Windfall Elimination Provision and non-covered work

A separate rule called the Windfall Elimination Provision (WEP) may reduce your own Social Security benefit — not a spousal benefit — if you receive a government pension from work not covered by Social Security.

This rule affects CSRS employees who also worked in jobs covered by Social Security, or FERS employees who worked in non-covered government jobs. The WEP reduces your Social Security benefit by up to half of your government pension amount, though the reduction is capped and does not explore if you had 30 or more years of substantial earnings under Social Security.

The WEP is complex and the reduction varies by individual. If you have both a government pension and Social Security earnings, the Social Security Administration can estimate your benefit before you claim.

When federal employees can claim their benefits

FERS and CSRS employees can claim their pensions at different ages depending on their years of service. Social Security has its own rules: you can claim as early as age 62, but your benefit will be permanently reduced. Your benefit increases if you wait until your Full Retirement Age (between 66 and 67 for most people born after 1954) or until age 70.

Many federal employees claim their pension first and delay Social Security to age 70 to maximize that benefit. Others claim both at the same time. The decision depends on your health, your household income needs, and your life expectancy — there is no single right answer.

If you are a FERS employee, you can also withdraw your TSP balance at retirement, though the rules about how much you can withdraw and when are strict. Withdrawing too much too soon can trigger taxes and penalties.

How to find out which system covers you

Your federal pay stub or your most recent statement from the Office of Personnel Management (OPM) will show whether you are covered by FERS or CSRS. You can also log into your account on the OPM website or contact your agency's human resources office.

If you are unsure whether you have earned enough Social Security credits to receive a benefit, you can create a free account on the Social Security Administration website and view your earnings record. This record shows how much you have contributed to Social Security and estimates your benefit at different claiming ages.

For questions about your FERS pension or CSRS pension specifically, contact OPM's retirement services line or your agency's benefits office. They can tell you your earliest retirement date and estimate your pension amount.

Frequently Asked Questions

If I am a CSRS employee, can I get Social Security at all?

Only if you worked in other jobs covered by Social Security and earned enough credits. Your federal CSRS work does not count toward Social Security. If you do receive a Social Security benefit from non-federal work, the Government Pension Offset will reduce any spousal or survivor benefit you would otherwise receive.

Do FERS employees pay less into Social Security than private-sector workers?

No. FERS employees pay the same Social Security tax rate as everyone else. However, they also contribute to the FERS pension and the TSP, so their total retirement contributions are higher than a private-sector worker's.

What happens to my FERS pension if I leave federal service before retirement?

If you leave before you are may be able to access to retire, you can leave your contributions in the FERS system and claim your pension later at your Minimum Retirement Age, or you can withdraw your contributions as a lump sum. You will still receive Social Security based on your earnings record, regardless of when you leave.

Can I receive both my FERS pension and my spouse's Social Security benefit?

Yes. Your FERS pension does not reduce your spousal Social Security benefit. However, if you also receive a non-covered government pension from another employer, the Government Pension Offset may reduce the spousal benefit.

How much will my FERS pension be?

Your FERS pension is calculated as 1% of your high-3 average salary (your highest three years of earnings) multiplied by your years of service. For example, 30 years of service at a high-3 average of $80,000 would give you a pension of $24,000 per year. Your agency or OPM can provide a more precise estimate based on your specific record.