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CSRS retirement annuities are computed based on:

  • Years of creditable service for retirement.
  • High-3 average salary.
  • CSRS annuity computation formula.

Creditable service includes all creditable civilian service performed as a Federal employee, honorable active military service, and unused sick leave.


Your high-3 average salary is based on the highest 3 years of basic pay or salary you earned in any consecutive 3-year period. Generally, the final 3 years of service include the highest pay, but pay from an earlier period can be used if it was higher.

Basic pay includes locality pay, night differential pay (for wage grade only), and premium pay for firefighters/law enforcement officers. It does not include night differential pay for general schedule employees or bonuses, allowances, or overtime pay.

Under the Non-foreign Area Retirement Equity Assurance (NAREA) provision of the National Defense Authorization Act for Fiscal Year 2010, beginning January 1, 2010 employees working in non-foreign areas will start receiving locality pay in lieu of Cost of Living Allowance (COLA). The transition from COLAs to locality pay will be phased in over a three-year period beginning in 2010. Employees who separate on immediate retirement between January 3, 2010 and December 31, 2012, are permitted under NAREA to elect a credit for a portion of their COLA in 2010 and 2011 as basic pay for retirement annuity computation purposes. The employees must pay retirement deductions on the portion of the COLA that is being credited as basic pay and the employing agency will pay employer contributions on the basic pay portion of the COLA. Employees who want to make this election must submit their election to the Civilian Benefits Center at the time they separate for retirement. Contact the Benefits Line for additional information.


The basic annuity under the general formula is computed as follows:

  • 1.5 percent of the high-3 average salary multiplied by creditable service up to 5 years; plus
  • 1.75 percent of the high-3 average salary multiplied by the number of years of creditable service between 5 and 10; plus
  • 2 percent of the high-3 average salary multiplied by all creditable service over 10 years.

If you work a part-time work schedule after April 6, 1986 your annuity will be prorated based on the number of hours you work. Your Retirement Specialist can provide additional information.


Your basic annuity may not exceed 80 percent of your high-3 average pay (disregarding the amount produced by the unused sick leave credit as illustrated in the example below). Normally, total service of 41 years 11 months (excluding unused sick leave credit) produces the maximum annuity.

Example: Tom has a total of 43 years of creditable civilian and military service. In addition, he has 2087 hours (1 year) of unused sick leave. His annuity would be limited to 80 percent based on civilian and military service but the 1 year of sick leave would increase the annuity an additional 2 percent. Thus, Tom's basic annuity would be 82 percent of his high-3 average pay.

If your basic annuity computation exceeds 80 percent of your high-3 average pay, it is adjusted to an amount equal to 80 percent of the high-3 average pay. This adjustment is made before applying any of the annuity reductions or additions.


Retirement deductions withheld from the first of the month after you have performed sufficient service to entitle you to the maximum annuity earn 3 percent interest compounded annually to the date of your retirement. These deductions plus interest, are automatically applied toward any deposit due for civilian nondeduction service, and/or redeposit due for civilian refunded service that ended on or after March 1, 1991.

Note: Excess deductions are not automatically applied toward a redeposit due for civilian refunded service that ended before March 1, 1991. The actuarial reduction applies to the maximum annuity. However, if you elect to purchase an additional annuity with the excess deductions, the redeposit has to be paid in full.

You have the option to receive a refund of any remaining balance or to use it to purchase additional retirement annuity. If the balance is less than $200 it is automatically refunded to you. If the balance is greater than $200 OPM will send you a letter that provides information about the amount of additional annuity the excess deductions and interest would purchase. You will make an election whether to receive a refund or purchase additional annuity after you receive the OPM notice.


Your annuity will be reduced if:

  1. You are under age 55 and retire on an early voluntary retirement or a discontinued service retirement. Your annuity will be reduced by on-sixth of 1 percent for each full month (2 percent for each year) you are younger than age 55.
  2. You did not make a deposit for service performed before October 1, 1982, during which no deductions were taken from your pay. Your annuity will be reduced 10 percent of the amount of the deposit that you owe. 
  3. You elect a survivor annuity for your current or former spouse. The reduction is dependent on the base you elect for the survivor annuity. If you elect your entire annuity as the base for the survivor annuity, your annuity will be reduced by 2.5 percent of the first $3,600 of your annuity, plus 10 percent of your annuity over $3,600.
  4. You elect a survivor annuity for a person who has an insurable interest. Your annuity will be reduced by 10–40 percent, depending on the difference between your age and the age of the person you name.
  5. You did not make a redeposit of a refund for a period of service that ended before March 1, 1991. Your annuity will be reduced based on your age at retirement and amount of redeposit due.
  6. You elect an alternative form of annuity because you are eligible for a nondisability annuity but have a life threatening or other critical medical condition.

Your annuity will be increased if you have a Voluntary Contribution account and elect to purchase an additional annuity. Your annual annuity will be increased $7 per year for every $100 in your Voluntary Contribution account.


OPM will automatically withhold the following from your retirement annuity:

  • Federal income tax in the amount that is currently withheld from your salary. Withholdings for State income tax are not automatic. OPM has agreements with some States to allow the withholding of State income tax, but you must specify the dollar amount ($5 or more) you want withheld.
  • Premiums for Federal Employees Health Benefits, if you are eligible to continue coverage.
  • Premiums for Federal Employees’ Group Life Insurance, if you are eligible to continue coverage.
  • Premiums for Federal Dental and Vision Insurance Program, if you are enrolled.

The year following your retirement, you are eligible for cost of living adjustments to your annuity. The first year’s increase is prorated based on how many months you were retired.


If your retirement plan is CSRS Offset, your annuity is computed in the same manner as if you were covered under CSRS, except the annuity payment is reduced (offset) when you become eligible for a Social Security benefit. The offset is applied when the basic requirements for Social Security are met (usually at age 62), even if you do not apply for Social Security. If you are not entitled to Social Security at age 62, there is no offset until or unless you later become entitled to Social Security.

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