FERS Glossary

Your base salary as authorized by the GS pay schedule, including locality pay. Basic pay is the foundation for FERS pension calculations (your High-3), TSP contributions, and retirement eligibility. It does not include overtime, bonuses, awards, or allowances. Find your basic pay on your most recent SF-50 in block 20, or on your pay stub labeled "basic pay."

Federal civilian and military service that counts toward FERS retirement eligibility and the pension formula. Most federal civilian service is creditable. Military service is creditable only if you make a military deposit (buyback) before retirement. Part-time service is prorated. Your Service Computation Date (SCD) reflects total creditable service adjusted for any breaks.

If you leave federal service before your retirement age but after vesting (5+ years of creditable service), you keep your FERS pension — but you must wait to receive it. Payment begins at your MRA (or later). The deferred pension is calculated using your High-3 salary and YOS at departure, not at the time you start collecting. It does not grow with inflation between departure and first payment, which significantly reduces its purchasing power over a long deferral period.

FERS retirees receive a reduced COLA compared to CSRS retirees:

• CPI < 2%: full CPI adjustment
• CPI between 2–3%: flat 2% adjustment
• CPI > 3%: CPI minus 1 percentage point

CSRS retirees receive the full CPI regardless. In periods of higher inflation, this diet formula meaningfully reduces the real purchasing power of a FERS pension over time.

The rate used to convert future pension payments to today's dollars (present value). Think of it as the return you could earn on a safe investment. A higher discount rate makes future income worth less today; a lower rate makes it worth more. The estimator defaults to 2% (a conservative long-run real rate), meaning it treats the pension as highly valuable. Using 4% is more conservative — it implies you believe you can earn 4% on safe investments and reduces the pension's present value accordingly.

Not sure which to use? 2% = standard, 3% = moderate, 4% = conservative.

The federal health insurance program. The government pays approximately 70–75% of premiums for active employees. If you retire with at least 5 consecutive years of FEHB coverage immediately before retirement, the government continues paying that subsidy in retirement — worth $8,000–$15,000/year depending on your plan. If you break FEHB coverage (e.g., drop to a spouse's plan for a year), you may lose retiree eligibility permanently. Check your plan's premium details at opm.gov/healthcare-insurance.

The retirement system covering most federal civilian employees hired after December 31, 1983. FERS has three components: (1) the FERS Basic Benefit (a defined-benefit pension), (2) the Thrift Savings Plan (a defined-contribution 401k-style account), and (3) Social Security. FERS employees hired before 2013 contribute 0.8% of pay; those hired in 2013–2014 (FERS-RAE) contribute 3.1%; those hired in 2014 or later (FERS-FRAE) contribute 4.4%.

Applies to employees first hired January 1, 2013 through December 31, 2013. Contribution rate: 3.1% of basic pay (vs. 0.8% for classic FERS). Benefits are otherwise identical to classic FERS. The estimator auto-detects your tier based on your SCD and accounts for this in its FERS savings offset calculation.

Applies to employees first hired January 1, 2014 or later. Contribution rate: 4.4% of basic pay. Benefits are otherwise identical to classic FERS. This is now the tier for all new federal hires. The higher contribution rate means a larger FERS savings credit on the break-even calculator.

A monthly payment for FERS employees who retire before age 62 after a full career. Approximates the Social Security benefit earned during federal service, bridging the gap until SS becomes available at 62. Eligibility: retire at MRA with 30+ YOS, or age 60 with 20+ YOS. Amount: approximately (YOS ÷ 40) × estimated SS benefit at 62. Ends at age 62 and is subject to a Social Security earnings test (benefit reduced if you earn more than ~$22,320/year post-retirement). Not modeled by this tool.

The age at which you receive 100% of your earned Social Security benefit. For those born in 1960 or later, FRA is 67. Claiming SS before FRA permanently reduces your benefit; delaying past FRA increases it by 8% per year up to age 70.

The average of your three highest consecutive years of basic pay (including locality). This is the salary base multiplied by your years of service and multiplier to determine your FERS pension. For most employees, High-3 is their final three years since pay increases over time. A late-career promotion or locality change can meaningfully raise your High-3. It does not include overtime, bonuses, or allowances. If you work part-time, the High-3 is calculated on your part-time pay rate.

The annual IRS limit on elective deferral contributions to 401(k)-type accounts, including the TSP. For 2025: $23,500. For employees age 50 or older, an additional catch-up contribution of $7,500 is allowed, bringing the total to $31,000. This limit increases periodically with inflation. Agency match contributions do not count toward this limit.

Approved unpaid absence from work. Up to 6 months of LWOP per year counts as creditable service for retirement purposes. Periods of LWOP beyond 6 months per year generally do not count. LWOP also affects your High-3 calculation since you earn no basic pay during LWOP. This is a common edge case for employees who took extended parental leave or other approved absences.

The earliest age at which a FERS employee can receive an immediate (or reduced) pension. MRA ranges from 55 to 57 depending on birth year:

Born	MRA
Before 1948	55
1948	55 + 2 months
1949	55 + 4 months
1950	55 + 6 months
1951	55 + 8 months
1952	55 + 10 months
1953–1964	56
1965	56 + 2 months
1966	56 + 4 months
1967	56 + 6 months
1968	56 + 8 months
1969	56 + 10 months
1970 and later	57

A FERS retirement option allowing you to retire at your MRA with as few as 10 years of creditable service. The trade-off: your pension is permanently reduced 5% for each year you are under age 62 at retirement. You may also postpone collection until age 62 to eliminate the penalty — but you receive nothing during the postponement. The MRA+10 option is useful for employees who need to leave federal service before completing 30 years but want to preserve some pension benefit.

The current worth of a future stream of payments, discounted at a given rate. A pension paying $50,000/year for 25 years doesn't have a present value of $1.25M — because money received in the future is worth less than money received today (you could invest it in the meantime). The estimator computes the present value of your FERS pension, TSP, and Social Security to allow apples-to-apples comparison with other financial assets.

Your federal service start date as adjusted for creditable service. Usually the same as your initial hire date, but may differ if you had a break in service, bought back military time, or had periods of non-creditable service. Find it on your SF-50 (Notification of Personnel Action) in box 31. The SCD is the single most important date to get right in the estimator — it determines your years of service and retirement eligibility.

The percentage of a retirement portfolio withdrawn annually. The estimator uses the 4% rule (Bengen, 1994; Trinity Study, 1998) — a widely accepted heuristic suggesting that withdrawing 4% of a balanced portfolio annually has historically sustained the portfolio for 30 years. The estimator uses this to convert your TSP balance into annual retirement income for comparison purposes. You can override this rate in the estimator inputs.

An election made at retirement (irrevocable) to provide a continuing annuity to your spouse or other designee after your death. Options: no survivor benefit (full pension, nothing to spouse), 25% survivor (5% pension reduction), or 50% survivor (10% pension reduction). If married, spouse must consent in writing to any election less than the 50% survivor benefit. This election cannot be changed after retirement in most circumstances.

The federal government's 401(k)-equivalent defined-contribution retirement plan. FERS employees receive an automatic 1% agency contribution and up to 4% matching (for a total 5% agency contribution if you contribute at least 5% yourself). The 2025 employee contribution limit is $23,500 ($31,000 for age 50+). TSP offers both Traditional (pre-tax) and Roth (after-tax) options. Major fund options include the C Fund (S&P 500 index), F Fund (bond index), G Fund (government securities), S Fund (small-cap index), I Fund (international), and L Funds (lifecycle target-date blends). Manage your TSP at TSP.gov →.

FERS requires a minimum of 5 years of creditable civilian federal service to qualify for any pension benefit. Leaving before 5 years means you receive no FERS pension — only your own TSP contributions back (plus earnings). After vesting, you are entitled to at least a deferred annuity starting at MRA, regardless of when you leave federal service.

An OPM authority that allows agencies to temporarily lower the age and service requirements for voluntary retirement during a workforce reduction, reorganization, or transfer of function. Under VERA, employees may be eligible to retire at age 50 with 20 years of service, or at any age with 25 years. No pension penalty applies under VERA (unlike MRA+10). VERA windows are agency-specific and time-limited.

Automatic pay step increases within your GS grade, earned by reaching length-of-service requirements with an acceptable level of performance:

• Steps 1 → 4: every 52 weeks (1 year)
• Steps 4 → 7: every 104 weeks (2 years)
• Steps 7 → 10: every 156 weeks (3 years)
• Step 10 is terminal — no further WGI increases within the grade

Each step within a GS grade is approximately 3.33% more than the previous step (steps 1–10 span roughly 30% of pay). WGI increases compound on top of annual pay raises, which is why the estimator applies them as a separate multiplier when you enter your grade and step.

Total creditable service used in the FERS pension formula. Calculated from your Service Computation Date (SCD) to your retirement date. Fractions of a year count — the formula is applied to the exact total (e.g., 30.4 YOS). Each year adds 1.0% or 1.1% of your High-3 to your annual pension, paid for life. At age 62 with 20+ YOS, the 1.1% multiplier applies; otherwise 1.0%.