The Federal Employees Retirement System (FERS) is the retirement plan for those in permanent Federal positions. Its benefits are portable within the Federal Government. The plan consists of three tiers:
- The Basic Benefit Plan establishes an annuity based on an employee’s age, years of Federal service at retirement, and average highest salary over a consecutive three-year period. Disability and survivor benefits are also provided.
- Social Security pays benefits at retirement based on an employee’s age and earnings from Social Security-covered wages. Disability and survivor benefits are also provided.
- The Thrift Savings Plan (TSP) allows employees to save and invest part of their income for retirement, receive matching agency contributions, and reduce their current taxes. The plan is similar to 401(k) plans offered by private employers. Employees participating in the TSP can choose among several investment plans and funds.