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This report describes recent trends in the number of civil service annuitants and the financial
status of the Civil Service Retirement and Disability Fund. Among the results presented:
• In FY2004, 70% of civilian federal employees were enrolled in the Federal
Employees Retirement System (FERS), which covers employees hired since 1984.
Thirty percent were enrolled in the Civil Service Retirement System (CSRS),
which covers only employees hired before 1984.
• In FY2006, 2.4 million people received civil service annuity payments. Eighty-
nine percent of these annuitants were covered by CSRS.
• More than one-third of all federal employee annuitants and survivor annuitants
reside in five states: California, Florida, Texas, Maryland, and Virginia.
• The average civilian federal employee who retired in 2006 was 59 years old and
had completed 27.8 years of federal service.
• The average monthly annuity payment to workers who retired under CSRS in
2006 was $2,452. Workers who retired under FERS received an average monthly
annuity of $896. (The FERS retirees had shorter average length of service than
CSRS retirees. They also earned Social Security benefits and received an
employer match on their contributions to the Thrift Savings Plan.)
• At the end of FY2006, the balance of the Civil Service Retirement and Disability
Fund was $690 billion, an amount equal to 12 times the amount of outlays from
the fund during 2006. The trust fund balance is expected to reach $702 billion by
the end of FY2007.
• From 1970 to 1985, the number of people receiving civil service annuities rose
by one million, an increase of 105%. Between 1985 and 2006 the number of civil
service annuitants rose by 482,000, an increase of 24%.
• As of September 2006, civilian federal employment, including the Postal Service,
totaled 2.7 million workers, the same as in 2000, and a decline of 429,000 (14%)
since 1990.
• Employees of the federal government are older on average than workers in the
private sector. Sixty percent of all federal employees were age 45 or older in
2004, and 42% were age 50 or older. In contrast, only 37% of wage and salary
workers in the private sector were 45 or older in 2004, and just 25% were 50 or
older.

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Fundamentals of the Civil Service Retirement Programs ............................................................... 1
Retirement Coverage of Current Federal Employees...................................................................... 3
Coverage of Current Civil Service Annuitants ................................................................................ 3
State of Residence of Civil Service Annuitants............................................................................... 4
Average Age and Years of Service at Retirement ............................................................................ 6
Average Annuity Amounts under CSRS and FERS .................................................................. 6
Average Age at Retirement of New Federal Retirees, 1990 to 2006............................................... 8
Total and Average Annuity Payments to Retirees and Survivors in 2006 ....................................... 8
Cost-of Living Adjustments under CSRS and FERS ...................................................................... 9
Income and Expenditures of the Civil Service Retirement and Disability Fund, 2006................. 10
Recent Trends in the Balance of the Civil Service Retirement and Disability Fund..................... 12
Number of Civil Service Annuitants and Total Annuity Payments, 1970 to 2006 ........................ 13
Civilian Federal Employment, 1940 to 2006................................................................................. 15
Age Distribution of Executive Branch Employees........................................................................ 17

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Table 1. Retirement Systems Coverage of Federal Employees, by Fiscal Year .............................. 3
Table 2. Retirement Plan Coverage of Civil Service Annuitants, FY2006...................................... 4
Table 3. State of Residence of Civil Service Annuitants, 2006 ....................................................... 4
Table 4. Number, Average Age and Years of Service, and Average Annuity of Civil
Service Annuitants Who Retired in 2006 ..................................................................................... 7
Table 5. Average Age at Retirement for New Federal Retirees, 1990 to 2006 ................................ 8
Table 6. Total and Average Annuity Payments to Retirees and Survivors in 2006.......................... 9
Table 7. Cost-of-Living Adjustments under CSRS and FERS ...................................................... 10
Table 8. Income and Expenditures of the Civil Service Retirement and Disability Fund,
2006-2008....................................................................................................................................11
Table 9. Income and Expenditures of the Civil Service Retirement and Disability Fund,
1990 to 2008............................................................................................................................... 13
Table 10. Annuitants and Annuity Payments, 1970 to 2006.......................................................... 14
Table 11. Civilian Federal Employment, 1940 to 2006................................................................. 16
Table 12. Age Distribution of Full-time, Permanent Employees................................................... 17

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Author Contact Information .......................................................................................................... 18

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The Civil Service Retirement System (CSRS) was established by P.L. 66-215 in 1920, 15 years
before Congress created the Social Security system for workers in the private sector. Because
CSRS was designed to provide both retirement and disability benefits, federal employees were
excluded from participating in Social Security. State and local governments were permitted to
bring their employees into the Social Security program in the early 1950s, and today about three-
fourths of state and local government employees are covered by Social Security.
In the Social Security Amendments of 1983 (P.L. 98-21), Congress mandated participation in
Social Security by all civilian federal employees initially hired on or after January 1, 1984.
Because Social Security provides both retirement and disability benefits, and because enrolling
federal workers in both CSRS and Social Security would have required each employee to
contribute more than 13% of pay, Congress directed the development of a new federal employee
retirement system with Social Security as the cornerstone. The result of these efforts was the
Federal Employees Retirement System (FERS), created by P.L. 99-335 and enacted on June 6,
1986. The new system, patterned after the retirement programs typical of large employers in the
private sector, is composed of three elements: (1) Social Security, (2) the FERS basic annuity (a
defined benefit plan), and (3) the Thrift Savings Plan (a defined contribution plan).1
All permanent federal employees whose initial federal employment began after December 31,
1983, are covered by FERS, as are employees who voluntarily switched from CSRS to FERS
during “open seasons” in 1987 and 1998.2 Former federal employees who have completed at least
five years of service under CSRS and are rehired after a break in service of less than one year can
either join FERS or participate in both CSRS and Social Security through the “CSRS offset plan.”
Under this plan, 6.2% of the employee payroll contribution and an equal share of the employer
contribution are paid into Social Security. In retirement, these employees’ CSRS annuities are
reduced (“offset”) by the amount of the Social Security benefit.
Under FERS, workers who have completed at least 30 years of service can retire at the minimum
retirement age. The minimum retirement was 55 for workers born before 1948, and it is
scheduled to rise to 57 for those born in 1970 or later. Employees with 20 or more years of
service can retire at age 60, and those with at least 5 years of service can retire at age 62. Federal
employees and former employees who have completed at least ten (but fewer than 30) years of
service can receive a reduced FERS pension benefit at the minimum retirement age. For those
who choose this option, the FERS pension benefit is permanently reduced by 5% multiplied by
the number of years between the worker’s age at retirement and age 62. For example, the pension
of a federal employee who retires at age 56 with fewer than 30 years of service would be
permanently reduced by 5% multiplied by six, or 30%.

1 In a defined benefit plan, the amount of the retirement benefit is based on an employee’s salary and number of years
of service. With each year of service, a worker accrues a benefit equal to a fixed dollar amount or a percentage of pay.
A defined contribution plan is like a savings account maintained on behalf of each participating employee. The amount
of retirement benefits that a worker receives will depend on the balance in the account, which is the sum of
contributions, plus interest, dividends, and capital gains (or losses).
2 P.L. 105-61 (Oct. 10, 1997) authorized an open season to be held from July through Dec. 1998, during which
employees still enrolled in CSRS could transfer to FERS.
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Under CSRS, the minimum retirement age is 55 for employees with 30 years of federal service,
age 60 for those with 20 years of service, and 62 for employees with at least 5 years of service.
CSRS has no provision for early retirement with a reduced benefit, except for special
circumstances such as a reduction in force. Agencies undergoing a reduction in force can, with
the approval of the Office of Personnel Management, offer retirement to employees age 50 or
older with 20 or more years of service or at any age with 25 or more years of service. An
employee under CSRS who is offered and accepts an offer of voluntary early retirement has his or
her retirement annuity permanently reduced by 2% multiplied by the number of years between the
worker’s age at retirement and age 55.
Under both CSRS and FERS, the amount of an employee’s retirement annuity is based on the
average of the individual’s highest three consecutive years of basic pay multiplied by their years
of service and the rate at which benefits accrue for each year of service.3 Under FERS, this
accrual rate is one percent of base pay per year. Workers with 20 years or more of service under
FERS who work until at least age 62 are credited with an accrual rate of 1.1% for each year of
service.4 For example, a worker covered by FERS who retires at 61 with 29 years of service will
receive a FERS annuity equal to 29% of his high-3 average pay. Delaying retirement by one year
would increase the annuity to 33% of high-3 average pay (30 X 1.1 = 33.0).
Accrual rates are lower under FERS than under CSRS because employees covered by FERS also
pay Social Security payroll taxes and earn Social Security retirement benefits. Under CSRS the
benefit accrual rate increases with length of service. Workers accrue benefits equal to 1.5% of
high-3 average pay for each of their first 5 years of service; 1.75% of high-3 pay for years 6
through 10; and 2.0% of high-3 pay for each year of service after the 10th year. This yields a
pension equal to 56.25% of high-3 average pay after 30 years of federal service under CSRS.
For all federal workers covered by FERS, the agency where they are employed contributes an
amount equal to 1% of the employee’s base pay to the Thrift Savings Plan (TSP), even if the
employee makes no voluntary contributions to the TSP. In 2007, workers covered by FERS or
CSRS can contribute up to $15,500 to the TSP.5
Workers age 50 and older can contribute an additional $5,000 to the TSP. All contributions to the
Thrift Savings Plan are made on a pre-tax basis, and neither the employee’s contribution nor any
investment earnings are taxed until the money is withdrawn from the account. In addition, the
first 5% of employee pay contributed to the TSP generates agency matching contributions for
workers covered by FERS.6 Workers covered by CSRS may contribute to the TSP, but t they
receive no matching contributions from their employing agency.

3 The calculation of “high-three” average pay is based on nominal or “current dollars” rather than indexed or “constant
dollars.”
4 Because FERS coverage began in 1984, no federal workers will have 30 years of service exclusively under FERS
until 2014.
5 Employee contributions to the TSP are subject to the annual limit on salary deferrals established under Internal
Revenue Code § 402(g).
6 All employees covered by FERS receive “agency automatic contributions” of 1% of pay. Employee contributions are
matched dollar-for-dollar on the first 3% of pay and at $.50 on the dollar on the next 2% of pay. Thus, the maximum
agency contribution is 5% of pay.
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Because enrollment in CSRS has been closed to new entrants since 1984, the proportion of
federal workers covered by FERS has been rising and coverage under CSRS has been declining.
(See Table 1.) FY1995 was the first year in which a majority of civilian federal employees (51%)
were covered by FERS. During FY2004, 70% of federal employees were covered by FERS.
Table 1. Retirement Systems Coverage of Federal Employees, by Fiscal Year
Covered Active Employeesa CSRS
FERS
Total
FY2004 795,000
1,875,000
2,670,000
Percentage distribution
29.8%
70.2
100
FY2003 862,000
1,808,000
2,670,000
Percentage distribution
32.3
67.7
100
FY2002 897,000
1,717,000
2,614,000
Percentage distribution
34.0
66.0
100
FY2001 987,000
1,689,000
2,676,000
Percentage distribution
36.9
63.1
100
FY2000 961,000
1,629,000
2,590,000
Percentage distribution
37.1
62.9
100
FY1999 1,009,000
1,536,000
2,545,000
Percentage distribution
39.6
60.4
100
FY1998 1,108,000
1,550,000
2,658,000
Percentage distribution
41.7
58.3
100
FY1997 1,194,000
1,487,000
2,681,000
Percentage distribution
44.5
55.5
100
FY1996 1,235,000
1,385,000
2,620,000
Percentage distribution
47.1
52.9
100
FY1995 1,311,000
1,371,000
2,682,000
Percentage distribution
48.9
51.1
100
FY1994 1,402,000
1,296,000
2,698,000
Percentage distribution
52.0
48.0
100
Source: Office of Personnel Management.
a. Includes U.S. Postal Service. Does not include employees on leave without pay.
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Although the majority of current federal employees are covered by FERS, most retired federal
workers and their surviving spouses and dependents receive benefits from employment that was
covered by CSRS. In FY2006, 89% of current annuitants were receiving pension benefits that
were accrued under CSRS, while just 11% had retired under FERS. (See Table 2.) Under both
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CSRS and FERS, employee and agency contributions are paid into—and pension annuities are
paid from—the Civil Service Retirement and Disability Fund. The number of FERS annuitants is
comparatively small because the FERS is still a relatively new program when compared to the
average length of a worker’s career. The program was established in 1987 and was made
retroactive for all employees initially hired on or after January 1, 1984.
Table 2. Retirement Plan Coverage of Civil Service Annuitants, FY2006
CSRS
FERS
Total
Employee annuitants
1,578,713
249,803
1,828,516
Percentage 86.3
13.7
100
Survivor
annuitants
596,887 23,867 620,754
Percentage 96.2
3.8
100
Total annuitants
2,175,600
273,670
2,449,270
Percentage 88.8
11.2
100
Source: U.S. Office of Personnel Management.
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More than 2.4 million people received civil service annuities in 2006, either as retired federal
employees, surviving spouses, or surviving dependents. California had the largest number of
annuitants with 216,965 and Vermont had the fewest with 4,126. Five states—California, Florida,
Texas, Maryland, and Virginia—accounted for more than one-third of all civil service annuitants
in 2006.
Table 3. State of Residence of Civil Service Annuitants, 2006
State
Number of Annuitants
Percent of National Total
Alabama 57,774
2.4
Alaska 7,072
0.3
Arizona 50,615
2.1
Arkansas 24,486
1.0
California 216,965
8.8
Colorado 45,152
1.8
Connecticut 14,526
0.6
Delaware 8,002
0.3
District of Columbia
43,494
1.8
Florida 165,944
6.8
Georgia 77,795
3.2
Hawaii 24,540
1.0
Idaho 13,002
0.5
Illinois 65,207
2.7
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State
Number of Annuitants
Percent of National Total
Indiana 34,840
1.4
Iowa 19,780
0.8
Kansas 23,691
1.0
Kentucky 32,072
1.3
Louisiana 25,444
1.0
Maine 13,467
0.5
Maryland 149,090
6.1
Massachusetts 44,171
1.8
Michigan 40,438
1.6
Minnesota 26,399
1.1
Mississippi 24,545
1.0
Missouri 51,879
2.1
Montana 11,503
0.5
Nebraska 13,108
0.5
Nevada 20,671
0.8
New Hampshire
11,783
0.5
New Jersey
55,270
2.3
New Mexico
26,604
1.1
New York
96,697
3.9
North Carolina
65,299
2.7
North Dakota
6,014
0.2
Ohio 73,417
3.0
Oklahoma 48,205
2.0
Oregon 31,535
1.3
Pennsylvania 106,095
4.3
Rhode Island
8,988
0.4
South Carolina
40,933
1.7
South Dakota
9,295
0.4
Tennessee 42,647
1.7
Texas 157,707
6.4
Utah 33,907
1.4
Vermont 4,126
0.2
Virginia 137,789
5.6
Washington 62,817
2.6
West Virginia
16,066
0.7
Wisconsin 25,079
1.0
Wyoming 5,463
0.2
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State
Number of Annuitants
Percent of National Total
U.S. Territories
14,689
0.6
Other countries
29,400
1.2
Total 2,455,497
100
Source: Office of Personnel Management.
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More than 103,000 civilian federal employees (including U.S. Postal Service employees) retired
during FY2006. (See Table 4.) Of this number, 75,551 (73%) were normal retirements7 and
another 9,538 (9%) were voluntary early retirements. Under CSRS, normal retirement can occur
as early as age 55 with 30 years of service. Under FERS, the minimum retirement age is
increasing from 55 for workers born before 1948 to 57 for those born in 1970 or later. Under both
programs, normal retirement can be taken at age 60 with 20 years of service or age 62 with 5
years of service. The average age of workers taking voluntary, normal retirement in 2006 was 60
for employees covered by CSRS and 63 for those covered by FERS. Workers taking normal
retirement under CSRS in 2006 had completed an average of 34 years of service, while those
retiring under FERS had an average of 19 years of service.
More than 8,000 federal employees took voluntary early retirement in 2006. These workers were
younger on average (54.3 years old) than those who took normal retirement, and their average
length of service (27.7years) was slightly less than that of those who took normal retirement.
Approximately 9% of all retirements among federal employees in 2006 were taken for reasons of
disability. Disability retirees were, on average, 51 years old with 17 years of service. Involuntary
retirements (such as those resulting from agency down-sizing) and retirements taken under other
special circumstances accounted for 3% of all retirements by federal employees in 2006.
ȱ¢ȱȱȱȱȱȱ
The average monthly annuity paid to all civilian federal employees who retired under CSRS in
2006 was $3,373, while new FERS annuitants received an average annuity of $1,137 per month.
Employees retiring under CSRS received larger annuities than those covered by FERS both
because of their longer average length of service and because CSRS was designed to provide an
adequate retirement income from a single source. FERS was designed to provide a smaller
annuity than CSRS for any given length of service and level of compensation because federal
employees covered by FERS participate in Social Security and they also can elect to save for
retirement on a pre-tax basis with agency matching contributions through the Thrift Savings
Plan.8 Employees in FERS who retire at the minimum retirement age or older with 30 years of
federal service are eligible to receive a supplement to their FERS annuity between their

7 Normal retirements include all retirements except disability retirements, voluntary early retirements, involuntary
retirements, and special provision retirements.
8 In 2007, federal employees can contribute up to $15,500 of pay (pre-tax) to the TSP. Employees enrolled in FERS
receive matching contributions up to a maximum of 5% of pay. Employees enrolled in CSRS do not receive matching
contributions. For more information on the TSP, see CRS Report RL30387, Federal Employees' Retirement System:
The Role of the Thrift Savings Plan, by Patrick Purcell.
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retirement and age 62. The supplement is approximately equal to the Social Security payments
they will receive for their years of federal employment. (Employees with 20 years of service
receive this supplement if they are at least age 60 at retirement.)
Table 4. Number, Average Age and Years of Service, and Average Annuity of Civil
Service Annuitants Who Retired in 2006
Civilian Federal Retirements
CSRS
FERSa Average
or
Total
Normal Retirements
Number 53,277
22,274
75,551
Average age at retirement
60.1
63.1
61.0
Average years of service
34.0
18.9
29.5
Average monthly annuity
$3,491
$937
$2,738
Disability Retirements
Number 2,349
7,189
9,538
Average age at retirement
53.0
50.3
51.0
Average years of service
26.2
14.2
17.2
Average monthly annuity
$2,060
$1,376
$1,544
Involuntary retirements
Number 1,992
708
2,700
Average age at retirement
55.9
56.0
55.9
Average years of service
30.0
24.3
28.5
Average monthly annuity
$2,975
$1,364
$2,553
Voluntary early retirements
Number 6,307
1,763
8,070
Average age at retirement
54.0
55.3
54.3
Average years of service
28.8
23.6
27.7
Average monthly annuity
$2,736
$1,295
$2,421
Special provision retirements
Number 3,415
1,154
4,569
Average age at retirement
54.8
54.0
54.6
Average years of service
30.4
25.4
29.1
Average monthly annuity
$4,913
$3,529
$4,563
Total retirements in 2006b
Number 68,844
34,448
103,292
Average age at retirement
59.0
59.4
59.1
Average years of service
32.6
18.3
27.8
Average monthly annuity
$3,373
$1,137
$2,627
Source: CRS analysis of data from the Office of Personnel Management.
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a. Employees covered by FERS also participate in Social Security. In January 2006, the average monthly Social
Security benefit for workers retiring at age 62 was $1,035.
b. Includes other, unclassified retirements.
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ŗşşŖȱȱŘŖŖŜȱ
In 2006, the average age of federal employees taking normal retirement was 61, almost the same
as in 1990. (See Table 5.) Over the period from 1990 to 2006, the average age of normal
retirements was 61.2 The average age for all retirements in 2006 was 59, and the average for the
period from 1990 to 2006 was 58.5. Federal agencies undergoing a major reorganization can
request permission from the Office of Personnel Management to offer their employees voluntary
early retirement or voluntary separation incentive pay (“buyouts”). Under voluntary early
retirement, an employee can retire as early as age 50 with 20 years of service. Voluntary
separation incentives are cash payments of up to $25,000 (before taxes) offered to employees
who retire or otherwise separate from federal employment voluntarily. Because these incentives
are generally offered to retirees who have not yet reached the combined age and years of service
that are required for normal retirement, they tend to reduce the average age of those who retire in
any given year.
Table 5. Average Age at Retirement for New Federal Retirees, 1990 to 2006
Average Age at Retirement
Normal Retirements
Fiscal Year
as a Percentage of All
All retirements
Normal retirements
Retirements
1990 59.4
61.3
79.0
1994 58.1
61.8
56.8
1998 57.6
61.5
57.1
2002 58.1
60.6
67.6
2006 59.1
61.0
73.1
Source: Office of Personnel Management.
Note: Normal retirements include all retirements except disability retirements, voluntary early retirements,
involuntary retirements, and special provision retirements.
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The Civil Service Retirement and Disability Fund paid annuities to 1.83 million retired federal
employees and 621,000 survivor annuitants in FY2006. Of these beneficiaries, 2.175 million
(89%) received benefits earned under CSRS and 274,000 (11%) received benefits under FERS.
Employee annuitants under CSRS received an average monthly annuity of $2,452. Survivors of
CSRS annuitants received an average monthly CSRS annuity of $1,189. Employee annuitants
under FERS received payments, averaging $896 per month and the average survivor benefit
under FERS was $375. As was noted earlier, FERS benefits are smaller than those under CSRS
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both because employees covered by FERS have fewer years of service than workers who retired
under CSRS, and because FERS benefits are intended to be supplemented by Social Security and
the Thrift Savings Plan.9
Table 6. Total and Average Annuity Payments to Retirees and Survivors in 2006
(in thousands of dollars)

CSRS FERS All Retirees
and Survivors
Employee annuitants
1,578,713 249,803 1,828,516
Percent of Total
86.3%
13.7%
100%
Mean monthly benefit
$2,452
$896
$2,239
Median monthly benefit
$2,152
$617
$1,977
Survivor annuitants
596,887 23,867 620,754
Percent of Total
96.2%
3.8%
100%
Mean monthly benefit
$1,189
$375
$1,158
Median monthly benefit
$1,053
$284
$1,022
Total annuitants
2,175,600 273,670 2,449,270
Percent of Total
88.8%
11.2%
100%
Source: Office of Personnel Management.
Ȭȱȱȱȱȱȱȱ
Cost-of-living adjustments (COLAs) for both CSRS and FERS are based on the rate of inflation
as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-
W). COLAs are determined by the percentage change in the average monthly CPI-W during the
third quarter (July to September) of the current calendar year compared to the third quarter of the
previous year. The “effective date” for COLAs is December, but they first appear in benefit
checks issued in January.
All CSRS retirees and survivors receive yearly COLAs equal to the annual percentage change in
the CPI-W. Under FERS, COLAs are paid only to retired workers who are age 62 and older and
to disabled and survivor beneficiaries of any age. COLAs paid under FERS are less than the rate
of inflation whenever the increase in the CPI-W is greater than 2.0%. If the rate of inflation
during the measurement period is between 2.0% and 3.0%, the FERS COLA is 2.0%. If inflation
is greater than 3.0%, then the COLA for FERS benefits is equal to the CPI-W minus one
percentage point.10 In January 2007, CSRS beneficiaries received a COLA of 3.3%, and FERS
beneficiaries received a COLA of 2.3%. (See Table 7.)

9 In June 2006, the average monthly Social Security benefit among all retired workers was $1,007. The average
monthly benefit for a surviving spouse was $954.
10 Workers who switched from CSRS to FERS receive a COLA that is weighted by the proportion of their federal
service that was spent under each retirement system.
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Table 7. Cost-of-Living Adjustments under CSRS and FERS
(in percent)
Date Paid
CSRS COLA
FERS COLA
Change in CPI from
3rd Qtr to 3rd Qtr
January 1990
4.7%
3.7
4.7
January 1991
5.4
4.4
5.4
January 1992
3.7
2.7
3.7
January 1993
3.0
2.0
3.0
April 1994
2.6
2.0
2.6
April 1995
2.8
2.0
2.8
April 1996
2.6
2.0
2.6
January 1997
2.9
2.0
2.9
January 1998
2.1
2.0
2.1
January 1999
1.3
1.3
1.3
January 2000
2.4
2.0
2.4
January 2001
3.5
2.5
3.5
January 2002
2.6
2.0
2.6
January 2003
1.4
1.4
1.4
January 2004
2.1
2.0
2.1
January 2005
2.7
2.0
2.7
January 2006
4.1
3.1
4.1
January 2007
3.3
2.3
3.3
Source: Office of Personnel Management.
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The Civil Service Retirement and Disability Fund (CSRDF) ended FY2006 with a balance of
$690 billion. By law, these assets are invested in special-issue U.S. Treasury bonds. The balance
of the trust fund represents the amount of budget authority available to pay benefits under both
CSRS and FERS. The fund’s balance at the end of 2006 was more than 12 times the value of the
CSRS and FERS annuities paid from the fund that year.
CSRDF receives income from several sources. Some of the fund’s income results from cash
transactions. Other income comes from intra-governmental transfers. The largest cash
transaction ($3.7 billion in 2006) consists of employee contributions to CSRS and FERS. These
contributions are equal to 7.0% of base pay under CSRS and 0.8% of pay under FERS.11 Smaller

11 Under the Balanced Budget Act of 1997 (P.L. 105-33), employee contribution rates under CSRS and FERS rose by
0.25% in January 1999 and by a further 0.15% in January 2000. They were to increase by another 0.1% in January
2001 before reverting to their previous levels—7.0% under CSRS and 0.8% under FERS—after Dec. 31, 2002, but the
(continued...)
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cash payments are received from the District of Columbia to finance retirement benefits for its
employees, and from additional cash contributions made by federal workers. These usually are
former federal employees who are returning to government service and who had previously
withdrawn their retirement contributions.
The fund’s largest sources of income are (1) interest payments on the U.S. Treasury bonds it
holds, (2) a payment from the general fund of the Treasury to make up for the insufficient funding
of benefits accrued under CSRS, and (3) payments from federal agencies and the Postal Service
on behalf of their employees.12 Agency contributions under CSRS are equal to 7.0% of payroll,
and are supplemented by transfers from the general fund of the Treasury equal to approximately
10% of payroll. Agency contributions to FERS are required by law to be equal to the full actuarial
cost of the program minus employee contributions. Agency contributions to FERS equal 11.2% of
pay in 2006. These three sources of income are not cash transactions, but intra-governmental
transfers which result in an increase in the fund’s budget authority as recorded in the accounts of
the U.S. Treasury. The fund receives Treasury bonds as a record of this budget authority, which it
redeems periodically as annuity payments come due.13
Expenditures from the retirement and disability fund consist mainly of payments to retired federal
employees and their surviving spouses and dependents. Annuity payments totaled $57.5 billion in
2006, while payments to the estates of decedents and payments to separating employees
accounted for another $318 million. Administrative expenses for the fund were $134 million, just
0.23% of expenditures.
Table 8. Income and Expenditures of the Civil Service Retirement and Disability
Fund, 2006-2008
(amounts in millions)

FY2006
FY2007 (est.)
FY2008 (est.)
Beginning balance
$660,773
$689,954
$701,757
Income to the fund
Cash transactions:
Employee contributions
$3,715
$4,010
$3,908
District of Columbia
$50
$38
$33
Other employee deposits
$535
$636
$665
Intragovernmental transfers:
Agency contributions
$13,819
$14,072
$15,714
Postal Service (total)
$4,429
$3,382
$3,596

(...continued)
increased contributions were repealed by P.L. 106-346.
12 At the time CSRS was created in 1920, it was common for private employers to pay some retirement benefits directly
from their sales revenues rather than from reserves held in a pension fund. Because CSRS was not designed to be
funded entirely from employee and agency contributions, some of the benefits accrued by workers covered by CSRS
are financed through transfers from the general revenues of the U.S. Treasury.
13 See CRS Report RL30023, Federal Employee Retirement Programs: Budget and Trust Fund Issues, by Patrick
Purcell.
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FY2006
FY2007 (est.)
FY2008 (est.)
Interest on securities
$36,432
$42,059
$43,725
General fund receipts
$28,151
$32,105
$33,544
Re-employment offset
$33
$39
$40
Total income to the fund
$87,164
$96,341
$101,225
Expenditures from the fund
Employee and survivor annuities
-$57,531
-$61,145
-$63,821
Refunds and payments to estates
-$318
-$302
-$307
Administration -$134
-$91
-$104
Transfer to PSRHBFa
———— -$23,000
————
Total expenditures from the fund
-$57,983
-$84,538
-$64,232
Ending balance
$689,954
$701,757
$738,750
Source: U.S. Office of Management and Budget, Budget of the United States Government, FY2008.
a. This one-time payment to the Postal Service Retiree Health Benefits Fund was authorized by the Postal
Accountability and Enhancement Act (P.L. 109-435).
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Between 1990 and 2006, the balance of the Civil Service Retirement and Disability Fund rose
from $236 billion to $690 billion, an increase of 192%. (See Table 9.) The balance of the fund
has been rising partly because the civil service retirement programs are in a long-term transition
from pay-as-you-go financing under CSRS to advance-funding under FERS.
For most of its history, CSRS benefits were funded on a pay-as-you-go basis with a small reserve
equal to about one year of benefit payments to meet unexpected contingencies. Employee
contributions and agency contributions were less than the actuarial value of the benefits that were
accrued each year by federal employees. In 1969, P.L. 91-93 mandated annual payments to the
fund from the general revenues of the U.S. Treasury to make up most of this shortfall.14 When
Congress passed the legislation that created FERS in 1986, it required that the full actuarial value
of benefits accrued each year by federal employees covered by the program (including the value
of future COLAs) must be funded by the sum of employee and agency contributions. The Office
of Personnel Management estimates that at some time in the 21st century, the trust fund will reach
a steady state in which it holds sufficient budget authority to finance about 20 years of retirement
and disability benefits.

14 The Office of Management and Budget has estimated that employee and agency contributions and the transfers from
the general fund are sufficient to meet all of the actuarial costs of CSRS except for the increase in benefits represented
by COLAs.
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Table 9. Income and Expenditures of the Civil Service Retirement and Disability
Fund, 1990 to 2008
(in billions of dollars)
Fiscal Year
CSRDF Income
CSRDF Expenditures
Ending Balance
1990 $52.2
-$31.1
$235.6
1995 65.7
-38.4
366.2
1996 66.6
-39.8
393.0
1997 70.2
-41.7
421.5
1998 72.2
-43.1
450.7
1999 74.5
-43.9
481.3
2000 76.0
-45.2
512.1
2001 77.9
-47.4
542.6
2002 80.1
-49.0
573.7
2003 78.4
-50.4
601.7
2004 82.4
-52.3
631.9
2005 83.7
-54.8
660.8
2006 87.2
-58.0
690.0
2007a 96.3
-84.5
701.8
2008 101.2
-64.2
738.8
Source: Office of Management and Budget, Budget of the United States Government, various years.
a. Expenditures for 2007 include a $23 billion payment to the Postal Service Retiree Health Fund.
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The number of people receiving civil service annuity payments has more than doubled since
1970, but the rate of increase has slowed since 1985. (See Table 10.) The rapid rise in the number
of civil service annuitants from less than one million in 1970 to approximately two million in
1985 resulted from the increase in federal employment that occurred between 1940 and 1955.
(See Table 11.) Throughout the 1930s, civilian federal employment (including postal employees)
was less than one million. 1940 was the first year in which there were more than one million
people in the federal workforce. By 1955, civilian federal employment had reached 2.4 million.
There were brief upward spikes in federal employment during World War II and the Korean War,
but relatively few of these war-time workers remained in service long enough to become vested in
pension benefits.
After 1955, civilian federal employment increased much more slowly. It reached 2.9 million in
1970, due in part to the war in Vietnam and the creation of such large-scale social programs as
Medicare and Medicaid in the 1960s. The slower but still steady increase in the number of federal
employees in the years between 1955 and 1970 had as one of its consequences the slower but
steady increase in the number of civil service annuitants in the years since 1985. Between 1985
and 2005, the number of civil service annuitants rose from around 2 million to about 2.5 million.
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The Office of Management and Budget estimates that by 2012 there will be approximately 2.9
million people receiving federal civil service annuities.
Expenditures for civil service annuities have grown by a greater percentage than the number of
annuitants because they are affected not only by the number of people employed by the federal
government, but also by increases in average life-span, growth in real wages, and inflation. Cost-
of-living adjustments—which have been applied to civil service annuities since 1962—do not
represent an increase in the real value of these annuities. They merely keep purchasing power
from eroding due to the effects of inflation.15
Under current law, the real value of a civil service annuity either remains constant (CSRS) or
declines (FERS) during retirement.16 Therefore, the increase in the real value of annuities has
been the result of increases in the average value of the “high-3” average pay on which these
annuities are based. Rates of increase in the high-3 average pay of retiring federal employees are
in turn affected by adjustments to pay for each grade-and-step level; special pay increases such as
locality pay adjustments; the distribution of federal employees among various grade-and-step
levels over time; and average length of service (since each additional year of service tends to
increase the high-3 average pay). The average real value of civil service annuities per annuitant
can be expected to decline in the future as a growing number of new retirees are covered by
FERS rather than CSRS. FERS annuities are supplemented by Social Security benefits and the
Thrift Savings Plan.
Table 10. Annuitants and Annuity Payments, 1970 to 2006
Year
Total Annuitants (thousands) Payments in Nominal
Payments in Constant
Dollars (millions)
2006 Dollars (millions)
1970 962
$2,746 $14,268
1975 1,391
7,048 26,410
1980 1,675
14,662 35,872
1981 1,779
17,597 39,027
1982 1,829
19,405 40,539
1983 1,869
20,717 41,933
1984 1,910
21,813 42,324
1985 1,971
23,012 43,115
1986 2,008
23,942 44,039
1987 2,055
25,713 45,632
1988 2,095
28,047 47,796
1989 2,122
29,134 47,366
1990 2,143
31,036 47,872

15 Federal tax revenues increase each year partly as a result of inflation. Income tax brackets are indexed in recognition
of increases in personal income that result solely from inflation.
16 Some CSRS COLAs in the 1970s exceeded the rate of inflation because P.L. 91-93, enacted in 1969, called for
COLAs of “CPI plus one percentage point.” The additional one percentage point was repealed by P.L. 94-440, enacted
in 1976.
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Year
Total Annuitants (thousands) Payments in Nominal
Payments in Constant
Dollars (millions)
2006 Dollars (millions)
1991 2,184
33,188 49,124
1992 2,185
33,545 48,202
1993 2,242
34,792 48,540
1994 2,263
36,254 49,317
1995 2,311
38,319 50,690
1996 2,333
39,670 50,972
1997 2,343
41,604 52,258
1998 2,361
42,943 53,112
1999 2,369
43,828 53,036
2000 2,372
45,072 52,767
2001 2,380
47,244 53,780
2002 2,383
48,838 54,729
2003 2,400
50,248 55,054
2004 2,446
52,122 55,626
2005 2,486
54,657 56,420
2006 2,453
57,816 57,816
2007a 2,471
61,408 60,086
2008a 2,488
64,090 61,360
2009a 2,518
66,492 62,290
2010a 2,541
68,725 62,996
2011a 2,564
70,815 63,514
2012a 2,587
72,977 64,044
Source: Office of Personnel Management and Office of Management and Budget.
Note: Depending on the day that the fiscal year begins, a year can have 11, 12, or 13 payments.
a. Estimated number of annuitants and nominal outlays from the Budget of the United States.
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Since 1990, the number of civilian federal employees (including the U.S. Postal Service, which
participates in both CSRS and FERS) has fallen from 3.1 million to 2.7 million. (See Table 11.)
Civilian federal employment outside the Postal Service fell from 2.25 million in 1990 to 1.88
million in 2006, a decline of 16.4%. Reductions in federal employment yield immediate savings
in payroll costs, and ultimately they will result in lower expenditures for retirement annuities for
federal employees. In the near-term, however, reductions in the federal work force may result in a
greater number of annuitants to the extent that the reductions are achieved by inducing employees
to retire early. Employment in the Judicial Branch (34,000) exceeded employment in the
Legislative Branch (29,000) in 2006. Since 1980, employment in the Legislative Branch has
declined from 40,000 employees to 29,000 employees. Over the same period, employment in the
Judicial Branch rose from 15,000 to 34,000.
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Table 11. Civilian Federal Employment, 1940 to 2006
(in thousands, as of September 30 each year)
Year
Legislative
Judicial
Executive
Postal
Branch
Branch
Branch
Service
Total
1940 20
2 758 312
1,091
1945 25
3 3,181 379
3,588
1950 23
4 1,449 485
1,961
1955 22
4 1,860 512
2,397
1960 23
5 1,808 563
2,398
1965 26
6 1,900 596
2,528
1970 31
7 2,158 726
2,922
1975 39
10 2,149 699
2,897
1980 40
15 2,161 660
2,876
1981 39
16 2,143 663
2,861
1982 39
16 2,110 660
2,825
1983 39
17 2,157 663
2,876
1984 39
17 2,171 683
2,910
1985 39
18 2,214 750
3,021
1986 38
19 2,193 774
3,024
1987 38
20 2,235 798
3,091
1988 38
22 2,222 832
3,114
1989 38
22 2,238 826
3,124
1990 38
24 2,250 817
3,129
1991 39
26 2,244 804
3,113
1992 39
28 2,227 792
3,086
1993 38
28 2,157 790
3,013
1994 35
28 2,085 823
2,971
1995 33
29 2,012 845
2,919
1996 32
30 1,934 852
2,848
1997 31
30 1,872 854
2,787
1998 30
32 1,856 871
2,789
1999 30
32 1,821 866
2,749
2000 31
32 1,778 861
2,702
2001 30
34 1,792 848
2,704
2002 31
35 1,818 811
2,695
2003 31
34 1,867 799
2,731
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Year
Legislative
Judicial
Executive
Postal
Branch
Branch
Branch
Service
Total
2004 30
34 1,882 768
2,714
2005 31
34 1,872 764
2,701
2006 29
34 1,880 757
2,700
Source: Office of Personnel Management.
Note: Table shows total persons employed, including part-time.
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Employees of the federal government are older on average than workers in the private sector.
Forty percent of employees in the Executive branch were under age 45 in 2004. Eighteen percent
were between the ages of 45 and 49, and 42% were age 50 or older. (See Table 12.) In contrast,
according to data collected by the U.S. Bureau of the Census, 63% of all wage and salary workers
in the private sector were under age 45 in 2004. Twelve percent of private sector employees were
ages 45 to 49, and 25% were age 50 or older.17
Under CSRS and FERS, an employee can retire with an immediate, unreduced annuity at age 55
(CSRS) or 56 (FERS) with 30 years of service or at age 60 with 20 years of service. About 37%
of federal employees will reach age 55 within 10 years, but not all of them will have 30 years of
service at that age. Of those who do, not all will retire immediately. The average age among all
federal employees who retired in 2006 was 59. The average among those who took normal
retirement—as opposed to early retirement or disability retirement, for example—was 61.18
Table 12. Age Distribution of Full-time, Permanent Employees
(employees in thousands, as of September 30, 2004)
Age Under
Age
45 -49
50 -54
55 -59
60 -64
65 or
Total
45
older
Number of
employees
657 291
315
242
94 33 1,632
Percent 40.3
17.8
19.3
14.8
5.8
2.1
100
Source: U.S. Office of Personnel Management.

17 CRS analysis of data from the Current Population Survey. Based on wage and salary workers employed in the
private sector.
18 Retirements other than normal retirements include disability retirements, voluntary early retirements, involuntary
retirements, special retirements for law enforcement officers and firefighters, and other unclassified retirements.
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ȱȱȱ

Patrick Purcell

Specialist in Income Security
ppurcell@crs.loc.gov, 7-7571

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