If you’re a person living on a civil service pension, and you’re facing a divorce case, you might be surprised to discover that your FERS or CSRS plan is brought into the proceedings as a potential divisible asset.
It’s important to understand how these things work, so you can be prepared to deal properly with the case and understand the strategies you develop with your divorce attorney. Learn about the similarities and differences between FERS and CSRS issues in divorce, why both still exist, and which one applies to your divorce case.
FERS vs. CSRS
The United States government has two different retirement systems for their employees. These are FERS and CSRS, or the Federal Employees Retirement System and the Civil Service Retirement System, respectively. Every level of government offers some sort of retirement plan in which employees contribute money while retirees are able to draw a monthly income, or pension, from the system. CSRS is the older of the systems and is being slowly phased out as employees under that system retire.
There are core differences between FERS vs. CSRS which you need to be aware.
Determining Eligibility
While both still exist, FERS is the successor to CSRS, which will be eventually phased out when no remaining beneficiaries draw from it. At the time FERS was created, all current workers at the time were given the option to convert their CSRS plan to a FERS plan. All new federal employees are automatically enrolled in FERS. Thus, if you were in the plan pre-1987 and chose not to convert, you may still have CSRS. Otherwise, you have a FERS plan.
Number of Components
The original CSRS program is a standard, classic pension plan in which employees contribute a percentage of their pay to a pool and they get an annuity to maintain their standard of living upon retirement. FERS, on the other hand, is a slightly smaller pension which is augmented by a thrift savings plan, and Social Security.
Social Security and Thrift Savings Plan
Each employee under FERS has a thrift savings account, which is matched up to a certain amount by the federal government, who will contribute at least one percent regardless of whether the employee makes any contributions. CSRS employees can contribute to the TSP, but do not receive matching funds from the government. In addition, CSRS employees don’t get Social Security upon retirement, while FERS employees do.
Contributions and Retirement Age
Each system sees employees contribute a total of between seven percent and eight percent of their salary. For CSRS employees, the whole contribution is to the program. For FERS employees, Social Security is considered part of this contribution. Finally, CSRS employees can retire as young as 55 years of age, while FERS employees can retire at the age of 57, possibly earlier, depending on when they started their career and the particular job they held within the government.
Divorce and Retirement Benefits
In some cases, the courts will assign federal retirement benefits to the ex-spouse. The rights to these benefits aren’t guaranteed, however, and the final divorce agreement must include an order from the court for them to be divided. This is why it’s so important to have a solid divorce lawyer familiar with these types of benefits in your corner.
If you’re facing divorce in Nevada and need help regarding your retirement benefits, contact the Willick Law Group for help today.
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