Postal Worker Retirement Benefits

One of the many perks of working for the United States Postal Service is the retirement benefits. There are two retirement systems currently being used for postal workers. Those hired before January 1, 1987 will retire with benefits from the Civil Service Retirement System, whereas those hired after that date retire under the Federal Employees Retirement System. The United States Office of Personnel Management governs both systems.

Civil Service Retirement System (CSRS)

This retirement system was established in 1920 and is effective for all retiring postal workers who were hired before 1987. This is a contributory system, which means that employees contribute the annuities that they will someday become entitled for. Those working under the CSRS system will contribute seven to eight percent of their salary to the retirement plan. When they become eligible for retirement, those contributions will be returned.

CSRS Eligibility

Postal workers are eligible for CSRS retirement benefits if they commit at least five years to service. To collect retirement after five years, the worker must be at least 62 years old. After working for the postal service for 20 years, a postal worker can retire at age 60. Those who have dedicated 30 years of service can retire as young as 55. An additional option is retirement with disability, which is available at any age, provided the employee has worked at least five years with the postal service.

Federal Employees Retirement System (FERS)

This is the newest retirement system for postal workers and is effective for all employees who were hired in 1987 or later. This system provides retirement benefits from three sources: the Basic Benefit Plan, Social Security and the Thrifty Savings Plan. An eligible employee who retires under the FERS will receive annuity checks for life.

Annuities for the Basic Benefit Plan and Social Security are deducted from each paycheck and held for retirement. Should the employee leave the post office before retirement, withheld annuities from these two sources can roll over into the next job. The third source of retirement income, the Thrifty Savings Plan, is similar to a 401k plan. Any money contributed to this fund by an employee will be matched by the postal service.

FERS Eligibility

A postal worker must dedicate at least five years of service in order to receive retirement benefits under the FERS system. The minimum retirement age is 55 to 57, depending on the year the employee was born. Those seeking immediate retirement before the age of 60 will receive a reduced amount of retirement benefits. However, an early retirement with full benefits can be sought if the employee was encouraged to retire due to a reduction in taskforce.

Applying for Retirement

In order to be considered for retirement benefits from the CSRS or FERS system, an employee must submit a formal application. For a standard retirement application, the employee should complete Standard Form 281. For immediate retirement, in which the employee will start receive benefits within 30 days, Standard Form 3107 should be completed. These forms are available from any United States Postal Service personnel department.

Resources

• Federal Retirement Benefits Calculator