| Personnel Management Manual |
U.S. Department of Transportation Federal Highway Administration |
Personnel Management Manual Date: June 8, 2004 Part 1: Personnel Systems & Procedures |
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Appendix 1
FERS Annuity Computation for Part-time Employees
FERS Annuity Computation–Part-time Employee |
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Computation Formula |
Computation Criteria |
Tentative FERS Annuity |
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Sample Computation |
Sample Information |
| Example 1:
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Example 1: Age: 63 FERS Service: 20 years total. All 20 yrs. is PT service at 32 hrs per week High-3 Salary (Equivalent Full-time salary): $70,000 Pro-ration Factor: 32/40 = 0.8 or (0.8 x 2087x20)/(1.0x2087x20) = 0.8 |
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Example 2:
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Example 2: Age: 60 FERS Service: 20 years; first 17 years full-time; last 3 years PT at 32 hours per week High-3 Salary: $70,000 Pro-ration Factor: ((0.8 x 2087 x 3) + (1.0 x 2087 x 17)) / (1.0 x 2087 x 20) = 0.97 |
CSRS Annuity Computation for Part-time Employees
CSRS Annuity Computation – Part-time Employee |
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SUM OF THE FOLLOWING 2 COMPUTATIONS |
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1. Pre-April 7, 1986, Computation |
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Computation Formula |
Computation Criteria |
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Sum of the following 3 calculations, if all apply: 1a. (High-3 Average Salary) X 2a. (First 5 Years of pre-4/7/86 CSRS Service, as many as applicable) X 3a. (Percentage Factor for First 5 Years of Service) (1.0% or 0.01) PLUS1b. (High-3 Average Salary) X 2b. (Second 5 Years of pre-4/7/86 CSRS Service, as many as applicable) X 3b. (Percentage Factor for Years 6 – 10) (1.5% or 0.015) PLUS1c. (High-3 Average Salary) X 2c. (Years of pre-4/7/86 Service Greater than 10, as many as applicable) X 3c. (Percentage Factor for Years Greater than 10) (2% or 0.02) = Tentative Pre-4/7/86 CSRS Annuity |
High-3 salary for pre-4/7/86 computation is actual earned salary, not equivalent full-time salary. High-3 salary for pre-4/7/86 computation may, and usually will occur after April 7, 1986. It may or may not be the last 3 years of service, depending upon changes in tour of duty and their effect on actual earned salary. High-3 salary for pre-4/7/86 computation does not have to be the same amount or the same period of time as for the post-4/6/86 computation (the highest 3 years of the equivalent full-time salary may not be the same as the highest 3 years of actual earned salary received). Percentage Factor for First 5 Years of Service = 1.0% per year. Percentage Factor for Years 6 – 10 = 1.5% per year. Percentage Factor for Years Greater than 10 = 2.0% per year. |
| PLUS (+) |
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| 2. Post-April 6, 1986, Computation |
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Computation Formula |
Computation Criteria |
| Sum of the following 3 calculations, if all apply, will be multiplied by the pro-ration factor in step 4: 1a. (High-3 Average Salary) X 2a. (First 5 Years of CSRS service, if not used for pre-4/7/86 calculation, as many as applicable) X 3a. (Percentage Factor for First 5 Years of Service) (1.0% or 0.01) PLUS1b. (High-3 Average Salary) X 2b. (Second 5 Years of CSRS Service, if not used for pre-4/7/86 calculation, as many as applicable) X 3b. (Percentage Factor for Years 6–10) (1.5% or 0.015) PLUS1c. (High-3 Average Salary) X 2c. (Years of CSRS Service Greater than 10 (less any used for pre-4/7/86 calculation, as many as applicable) X 3c. (Percentage Factor for Years Greater than 10) (2.0% or 0.02) = SUM of steps 1–3 X 4. (Pro-ration factor) = Tentative Post-4/6/86 CSRS Annuity THEN ADD: Tentative Pre-4/7/86 CSRS Annuity+ Tentative Post-4/6/86 CSRS Annuity= TENTATIVE TOTAL CSRS ANNUITY*
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High-3 salary for post-4/6/86 computation is the equivalent full-time salary, regardless of the part-time tour of duty worked. High-3 salary for the post-4/6/86 computation will usually, but not always, be the last 3 years. High-3 salary for the post-4/6/86 computation does not have to be the same amount or the same period of time as for the pre-4/7/86 computation (the highest 3 years of the equivalent full-time salary may not be the same as the highest 3 years of actual earned salary received). The Percentage Factors for First 5 Years of CSRS Service and Second 5 Years of CSRS Service are applied only once. If the first 10 years occur under pre-4/7/86 service, the post-4/6/86 computation uses only the Percentage Factor for Years Greater than 10. If part of the first 10 years is used in the pre-4/7/86 computation, then the post-4/6/86 computation picks up the remainder. Percentage Factor for First 5 Years of Service = 1.0% per year . Percentage Factor for Years 6–#10 = 1.5% per year. Percentage Factor for Years Greater than 10 = 2.0% per year. Pro-ration factor = Hours worked/Possible Full-time Hours over entire period of post-4/6/86 service. Possible FT Hours per year = 2087 |
SAMPLE COMPUTATONS FOR CSRS SERVICE |
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Sample Computation |
Sample Information |
| Example 1: Pre-4/7/86 Tentative Annuity: $56,000 X 5 X 0.01 = $2,800 + $56,000 X 5 X 0.015 = $4,200 + $56,000 X 1 X 0.02 = $1,120 = $8,120 + Post-4/6/86 Tentative Annuity: $70,000 X 20 X0.02 = $28,000 X Pro-ration factor = 0.8 = $22,400 = Total Tentative CSRS Annuity = $30, 520* *Still to be adjusted for additional credit for final sick leave balance. |
Example 1: Age: Retirement-eligible CSRS Service: 31 years; all 31 yrs. is PT service at 32 hrs per week. 11 years is pre-4/7/86 service; 20 years is post-4/6/86 service. High-3 Salary: Last 3 years for both computations; Pre-4/7/86 High-3 (Actual Earned Salary): $56,000 ($70,000 x 0.8); Post-4/6/86 High-3 (Equivalent Full-time salary): $70,000 Pro-ration Factor for Post-4/6/86 Computation: 32/40 = 0.8 or (0.8 x 2087x20)/(1.0x2087x20) = 0.8 |
| Example 2: Pre-4/7/86 Tentative Annuity: $70,000 X 5 X 0.01 = $3,500 + $70,000 X 5 X 0.015 = $5,250 + $70,000 X 1 X 0.02 = $1,400 = $10,150 + Post-4/6/86 Tentative Annuity: $70,000 X 20 X0.02 = $28,000 X Pro-ration factor = 0.83 = $23,240 = Total Tentative CSRS Annuity = $33, 390* *Still to be adjusted for additional credit for final sick leave balance. |
Example 2: Age: Retirement-eligible CSRS Service: 31 years; first 28 years is part-time service at 32 hours per week; last 3 years is full-time at 40 hours per week. 11 years is pre-4/7/86 service; 20 years is post-4/6/86 service. High-3 Salary: Last 3 years for both computations; Pre-4/7/86 High-3 (Actual Earned Salary): $70,000 ($70,000 x 1.0); Post-4/6/86 High-3 (Equivalent Full-time salary): $70,000 Pro-ration Factor for Post-4/6/86 Computation: ((0.8 x 2087x17) + (1.0 x 2087x3)) / (1.0 x 2087x20) = 0.83 |
| Example 3: Pre-4/7/86 Tentative Annuity: $60,000 X 5 X 0.01 = $3,000 + $60,000 X 1 X 0.015 = $ 900 = $ 3,900 + Post-4/6/86 Tentative Annuity: $70,000 X 4 X 0.015 = $ 4,200 + $70,000 X 21 X 0.02 = $29,400 = $33,600 X Pro-ration factor = 0.968 = $32,525 = Total Tentative CSRS Annuity = $36, 425* *Still to be adjusted for additional credit for final sick leave balance. |
Example 3: Age: Retirement-eligible CSRS Service: 31 years; first 7 years is part-time service at 32 hours per week; next 21 years is full-time service at 40 hours per week; last 3 years is part-time at 32 hours per week. 6 years is pre-4/7/86 service; 25 years is post-4/6/86 service. High-3 Salary: Last 3 years for post-4/6/86 computation; the 3 years before the last 3 years (the last 3 years of full-time service) for the pre-4/7/86 computation. Assume the average salary for the last 3 years of full-time service (years 26–28) is $60,000 per year. Pre-4/7/86 High-3 (Actual Earned Salary): $60,000 ($60,000 x 1.0 for the last 3 years of full-time service, compared to actual earned salary of $56,000 for last 3 years of part-time service); Post-4/6/86 High-3 (Equivalent Full-time salary): $70,000 Pro-ration Factor for Post-4/6/86 Computation: ((0.8 x 2087x4) + (1.0 x 2087x21)) / (1.0 x 2087x25) = 0.968 |