Federal Employees’ Retirement System:
Summary of Recent Trends
Katelin P. Isaacs
Analyst in Income Security
January 11, 2011
Congressional Research Service
7-5700
www.crs.gov
98-972
CRS Report for Congress
P
repared for Members and Committees of Congress

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Federal Employees’ Retirement System: Summary of Recent Trends

Summary
This report describes recent trends in the number of civil service annuitants and the financial
status of the Civil Service Retirement and Disability Fund (CSRDF).
• In FY2006, 76% of civilian federal employees were enrolled in the Federal
Employees’ Retirement System (FERS), which covers employees hired since
1984. Twenty-four percent were enrolled in the Civil Service Retirement System
(CSRS), which covers only employees hired before 1984.
• In FY2009, nearly 2.5 million people received civil service annuity payments.
Eighty-five percent of these individuals received annuities earned under 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 2009 was 58.9 years old
and had completed 27.4 years of federal service.
• The average monthly annuity payment to workers who retired under CSRS in
2009 was $3,617. Workers who retired under FERS received an average monthly
annuity of $1,242. Employees retiring under FERS had a shorter average length
of service than those under CSRS. FERS annuities are supplemented by Social
Security benefits and the Thrift Savings Plan (TSP).
• At the end of FY2009, the balance of the CSRDF was $748 billion, an amount
equal to more than 11 times the amount of outlays from the fund during 2008.
The trust fund balance is expected to reach $806 billion by the end of FY2011.
• From 1970 to 1985, the number of people receiving federal civil service annuities
rose from fewer than 1 million to nearly 2 million, an increase of 105%. Between
1985 and 2009 the number of civil service annuitants rose by 539,000, an
increase of 27%.
• As of September 2008, civilian federal employment, including the Postal Service,
totaled 2.8 million workers. This was 100,000 more than the number of
employees in 2000, but 300,000 fewer than the number of employees in 1990.
• Employees of the federal government are older on average than workers in the
private sector. Fifty-eight percent of all federal employees were aged 45 or older
in March 2009, and almost 25% were aged 55 or older. In contrast, only 42% of
wage and salary workers in the private sector were aged 45 or older in 2007, and
18% were aged 55 or older.

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Federal Employees’ Retirement System: Summary of Recent Trends

Contents
Fundamentals of the Civil Service Retirement Programs ............................................................. 1
Retirement System Coverage of Current Federal Employees ....................................................... 2
Retirement System Coverage of Current Civil Service Annuitants ............................................... 3
State of Residence of Civil Service Annuitants ............................................................................ 4
Average Age and Years of Service at Retirement ......................................................................... 5
Average Annuity Amounts under CSRS and FERS ...................................................................... 6
Average Age at Retirement of New Federal Retirees, 1990 to 2009.............................................. 7
Total and Average Annuity Payments to Retirees and Survivors in 2009 ...................................... 8
Cost-of Living Adjustments under CSRS and FERS .................................................................... 9
Income and Expenditures of the Civil Service Retirement and Disability Fund .......................... 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 2008........................ 13
Civilian Federal Employment, 1960 to 2008.............................................................................. 15
Age Distribution of Executive Branch Employees ..................................................................... 16

Tables
Table 1. Retirement System Coverage of Federal Employees, by Fiscal Year ............................... 3
Table 2. Retirement System Coverage of Civil Service Annuitants, FY2009 ................................ 3
Table 3. State of Residence of Civil Service Annuitants, 2009 ..................................................... 4
Table 4. Number, Average Age and Years of Service, and Average Annuity of Civil
Service Annuitants Who Retired in 2009 .................................................................................. 6
Table 5. Average Age at Retirement for New Federal Retirees, 1990 to 2009 ............................... 8
Table 6. Average Monthly Annuity Payments to Retirees and Survivors in 2009 .......................... 8
Table 7. Cost-of-Living Adjustments under CSRS and FERS ...................................................... 9
Table 8. Income and Expenditures of the Civil Service Retirement and Disability Fund,
2009-2011.............................................................................................................................. 11
Table 9. Income and Expenditures of the Civil Service Retirement Fund, 1990 to 2011............. 12
Table 10. Annuitants and Annuity Payments, 1970 to 2011 ........................................................ 15
Table 11. Civilian Federal Employment, 1960 to 2008............................................................... 16
Table 12. Age Distribution of Executive Branch Employees ...................................................... 17

Contacts
Author Contact Information ...................................................................................................... 17
Acknowledgments .................................................................................................................... 17

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Federal Employees’ Retirement System: Summary of Recent Trends

Fundamentals of the Civil Service Retirement
Programs
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. To
coordinate federal employee retirement benefits with Social Security, Congress directed the
development of a new federal employee retirement system with Social Security as the
cornerstone. The result of this effort was the Federal Employees’ Retirement System (FERS) Act
of 1986 (P.L. 99-335). The FERS is composed of three elements: (1) Social Security, (2) the
FERS basic retirement annuity, and (3) the Thrift Savings Plan (TSP).
All permanent federal employees hired after December 31, 1983, are enrolled in the FERS, as are
employees who voluntarily switched from CSRS to FERS during “open seasons” in 1987 and
1998.1 Under FERS, workers who have completed at least 30 years of service can retire at the
plan’s minimum retirement age. The minimum retirement age was 55 for workers born before
1948, and it is scheduled to rise to 57 for those born in 1970 or later. In 2011, the minimum
retirement age is 56. Employees with 20 or more years of service can retire at the age of 60, and
those with at least 5 years of service can retire at the age of 62. Federal employees and former
employees who have completed at least 10 years of service can receive a reduced FERS annuity
at the minimum retirement age. For those who choose this option, the FERS annuity is
permanently reduced by 5% multiplied by the number of years between the worker’s age at
retirement and age 62. For example, the FERS annuity of an employee who retires at the age of
56 with fewer than 30 years of service would be permanently reduced by 5% multiplied by six, or
30%.
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 aged 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

1 P.L. 105-61 (October 10, 1997) authorized an open season to be held from July through December 1998.
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Federal Employees’ Retirement System: Summary of Recent Trends

of service and the rate at which benefits accrue for each year of service.2 Under FERS, the accrual
rate is 1% of basic pay for each year of service. Workers with 20 or more years of service who
retire at the age of 62 or later are credited with an accrual rate of 1.1% for each year of service.
For example, a worker under FERS who retires at 61 with 29 years of service will receive a FERS
annuity equal to 29% of his or her high-three average pay. Delaying retirement by one year would
increase the annuity to 33% of high-three average pay (30 X 1.1 = 33.0).
Under CSRS, the benefit accrual rate increases with length of service. Workers accrue benefits
equal to 1.5% of high-three average pay for each of the first 5 years of service; 1.75% for the 6th
through 10th years of service, and 2.0% of high-three average pay for each year of service after
the 10th year. This yields a pension equal to 56.25% of high-three average pay after 30 years of
federal service under CSRS. Accrual rates are lower under FERS than under CSRS because
employees under FERS also earn Social Security retirement benefits.
For all federal workers enrolled in FERS, the agencies where they are employed contribute an
amount equal to 1% of the employees’ basic pay to the TSP, even if the employees make no
voluntary contributions to the TSP. In 2011, workers under FERS or CSRS can contribute up to
$16,500 to the TSP.3 Workers aged 50 and older can contribute an additional $5,500 to the TSP.
All contributions to the TSP 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 under FERS.4 Workers who are under CSRS can contribute to the TSP,
but they receive no matching contributions from their employing agencies.
Retirement System Coverage of Current Federal
Employees
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 enrolled in FERS. In FY2006, 75.6% of federal employees were enrolled in FERS.

2 High-three average pay is based on nominal (current) dollars rather than indexed (constant) dollars.
3 Employee contributions to the TSP are subject to the annual limit on salary deferrals established under Internal
Revenue Code § 402(g).
4 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 contributed and at $.50 on the dollar on the next 2% of pay contributed.
Thus, the maximum agency contribution to the TSP is 5% of employee pay.
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Federal Employees’ Retirement System: Summary of Recent Trends

Table 1. Retirement System Coverage of Federal Employees, by Fiscal Year
Covered Active Employeesa CSRS FERS Total
FY2006 650,000
2,014,000
2,664,000
Percentage distribution
24.4
75.6
100
FY2004 795,000
1,875,000
2,670,000
Percentage distribution
29.8
70.2
100
FY2002 897,000
1,717,000
2,614,000
Percentage distribution
34.0
66.0
100
FY2000 961,000
1,629,000
2,590,000
Percentage distribution
37.1
62.9
100
FY1998 1,108,000
1,550,000
2,658,000
Percentage distribution
41.7
58.3
100
FY1996 1,235,000
1,385,000
2,620,000
Percentage distribution
47.1
52.9
100
FY1994 1,402,000
1,296,000
2,698,000
Percentage distribution
52.0
48.0
100
Source: Office of Personnel Management, Federal Civilian Workforce Statistics: The Fact Book, various years.
a. Includes U.S. Postal Service. Does not include employees on leave without pay.
Retirement System Coverage of Current Civil
Service Annuitants
Although the majority of current federal employees are enrolled in FERS, most retired federal
workers and their surviving dependents receive benefits that were earned under CSRS. In
FY2000, 82% of employee annuitants were receiving pension benefits that were accrued under
CSRS, whereas just 18% had retired under FERS. (See Table 2.) The number of FERS annuitants
is comparatively small because the FERS is still a relatively new program when compared with
the average length of a worker’s career. The program was established by the Federal Employees’
Retirement System Act of 1986, and was made retroactive for all employees initially hired on or
after January 1, 1984.
Table 2. Retirement System Coverage of Civil Service Annuitants, FY2009
CSRS
FERS
Total
Employee annuitants
1,540,830
337,425
1,878,255
Percentage
82.0 18.0 100
Survivor annuitants
569,720
33,494
603,214
Percentage
94.4 5.6 100
Total annuitants
2,110,550
370,919
2,481,469
Percentage 85.1
14.9
100
Source: U.S. Office of Personnel Management.
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Federal Employees’ Retirement System: Summary of Recent Trends

State of Residence of Civil Service Annuitants
More than 2.4 million people received civil service annuities in 2009, either as retired federal
employees, surviving spouses, or surviving dependents. California had the largest number of
annuitants with 214,207 and Vermont had the fewest with 4,315. Five states—California, Florida,
Texas, Maryland, and Virginia—accounted for more than one-third of all civil service annuitants
in 2009. (See Table 3.)
Table 3. State of Residence of Civil Service Annuitants, 2009
State
Number of Annuitants
Percentage of National Total
Alabama 58,434
2.3%
Alaska 7,472
0.3%
Arizona 52,242
2.1%
Arkansas 24,834
1.0%
California 214,207
8.6%
Colorado 46,940
1.9%
Connecticut 14,648
0.6%
Delaware 8,759
0.4%
District of Columbia
43,391
1.7%
Florida 165,100
6.6%
Georgia 80,977
3.2%
Hawai 24,677
1.0%
Idaho 13,877
0.6%
Illinois 66,401 2.7%
Indiana 35,827
1.4%
Iowa 20,245
0.8%
Kansas 24,210
1.0%
Kentucky 32,784
1.3%
Louisiana 26,224
1.1%
Maine 13,631
0.5%
Maryland 152,662
6.1%
Massachusetts 43,392
1.7%
Michigan 41,947
1.7%
Minnesota 27,534
1.1%
Mississippi 25,143
1.0%
Missouri 53,010
2.1%
Montana 12,219
0.5%
Nebraska 13,278
0.5%
Nevada 21,409
0.9%
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Federal Employees’ Retirement System: Summary of Recent Trends

State
Number of Annuitants
Percentage of National Total
New Hampshire
12,128
0.5%
New Jersey
54,613
2.2%
New Mexico
27,498
1.1%
New York
95,673
3.8%
North Carolina
70,223
2.8%
North Dakota
6,178
0.2%
Ohio 73,799
3.0%
Oklahoma 48,687
1.9%
Oregon 32,643
1.3%
Pennsylvania 106,716
4.3%
Rhode Island
8,628
0.3%
South Carolina
43,001
1.7%
South Dakota
9,759
0.4%
Tennessee 44,756
1.8%
Texas 163,319
6.5%
Utah 34,809
1.4%
Vermont 4,315
0.2%
Virginia 139,413
5.6%
Washington 64,630
2.6%
West Virginia
16,997
0.7%
Wisconsin 26,037
1.0%
Wyoming 5,622
0.2%
U.S. Territories and other countries
42,318
1.7%
Total 2,497,236
100%
Source: Office of Personnel Management.
Average Age and Years of Service at Retirement
More than 87,907 civilian federal employees (including U.S. Postal Service employees) retired
during FY2009. (See Table 4.) Of this number, 57,854 (66%) were normal retirements5 and
another 12,624 (14%) were voluntary early retirements. Under CSRS, normal retirement can
occur as early as age 55 for an employee with 30 years of service. Under FERS, the minimum
retirement age is currently 56, and it will increase to 57 for workers 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
five years of service. The average age of workers taking voluntary, normal retirement in 2009 was
60.2 for employees under CSRS and 63.2 for those under FERS. Workers taking normal

5 Normal retirements include all retirements except disability retirements, voluntary early retirements, involuntary
retirements, and special provision retirements.
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Federal Employees’ Retirement System: Summary of Recent Trends

retirement under CSRS in 2009 had completed an average of 34.8 years of service, whereas those
retiring under FERS had an average of 20.2 years of service.
More than 12,000 federal employees took voluntary early retirement in 2009. These workers were
younger on average (54.0 years old for CSRS employees; 54.8 years old for FERS employees)
than those who took normal retirement, and their average length of service (30.0 years for CSRS
employees; 24.4 years for FERS employees) was less than that of those who took normal
retirement. Approximately 10% of all retirements among federal employees in 2009 were taken
for reasons of disability. CSRS disability retirees were, on average, 53.3 years old with 27 years
of service. The average age of FERS disability retirees, who had 15 years of service, was 50.5.
Involuntary retirements (such as those resulting from agency down-sizing) accounted for 1.8% of
all retirements by federal employees in 2009.
Average Annuity Amounts under CSRS and FERS
The average monthly annuity among civilian federal employees who retired under CSRS in 2009
was $3,619, whereas new FERS annuitants received an average annuity of $1,242 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 under 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 TSP.6 Employees
enrolled in FERS who retire at the minimum retirement age or older with 30 years of federal
service also receive a supplement to their FERS annuity between their retirement date and age 62.
The supplement is equal to the Social Security benefit that they earned while employed by the
federal employment and enrolled in FERS. Employees who retire at age 60 or 61 with 20 or more
years of service also receive this supplement. The FERS supplement terminates at age 62,
regardless of whether the individual applies for Social Security at that age.
Table 4. Number, Average Age and Years of Service, and Average Annuity of Civil
Service Annuitants Who Retired in 2009
Civilian Federal Retirements
CSRS
FERSa Average
or
Total
Normal Retirements
Number 37,635
20,219
57,854
Average age at retirement
60.2
63.2
61.2
Average years of service
34.8
20.2
29.7
Average monthly annuity
$3,891
$1,086
$2,969
Disability Retirements
Number 1,413
7,576
8,989
Average age at retirement 53.3
50.5
50.9
Average years of service
27.0
15.0
16.9

6 In 2011, federal employees can contribute up to $16,500 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 Katelin P. Isaacs.
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Federal Employees’ Retirement System: Summary of Recent Trends

Civilian Federal Retirements
CSRS
FERSa Average
or
Total
Average monthly annuity
$2,341
$1,379
$1,530
Involuntary Retirements
Number 982
605
1,587
Average age at retirement
56.8
56.8
56.8
Average years of service
30.4
24.8
28.3
Average monthly annuity
$3,412
$1,456
$2,666
Voluntary Early Retirements
Number 7,686
4,938
12,624
Average age at retirement
54.0
54.8
54.3
Average years of service
30.0
24.4
27.8
Average monthly annuity
$2,584
$1,094
$2,001
Special Provision Retirements
Number 1,535
1,692
3,227
Average age at retirement
54.4
53.6
54.0
Average years of service
30.6
24.9
27.6
Average monthly annuity
$5,867
$3,411
$4,579
Total Retirements in 2009b
Number 50,608
37,299
87,907
Average age at retirement
58.9
58.8
58.9
Average years of service
33.1
19.6
27.4
Average monthly annuity
$3,619
$1,242
$2,610
Source: CRS analysis of data from the Office of Personnel Management.
a. Employees covered by FERS also participate in Social Security. In January 2011, the average monthly Social
Security benefit for workers retiring at age 62 was $1,140.
b. Includes other, unclassified retirements that are not shown separately.
Average Age at Retirement of New Federal Retirees,
1990 to 2009
In 2009, the average age of federal employees taking normal retirement was 61.2, almost the
same as in 1990. (See Table 5.) The average age for all retirements in 2009 was 58.9, also the
same as in 1990. 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 payments (“buyouts”). Under voluntary early retirement, an
employee with 20 or more years of service can retire as early as age 50. 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 employees who retire in
any given year.
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Federal Employees’ Retirement System: Summary of Recent Trends

Table 5. Average Age at Retirement for New Federal Retirees, 1990 to 2009
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
2007 59.4
61.1
75.6
2009 58.9
61.2
65.8
Source: Office of Personnel Management.
Note: Normal retirements include all retirements except disability retirements, voluntary early retirements,
involuntary retirements, and special provision retirements.
Total and Average Annuity Payments to Retirees
and Survivors in 2009
The Civil Service Retirement and Disability Fund (CSRDF) paid annuities to 1.88 million retired
federal employees and 603,214 survivor annuitants in FY2009. Of these beneficiaries, 2.111
million (85%) received benefits earned under CSRS and 370,919 (15%) received benefits under
FERS. Employee annuitants under CSRS received an average monthly annuity of $2,899.
Survivors of CSRS annuitants received an average monthly CSRS annuity of $1,360. Employee
annuitants under FERS received payments, averaging $1,051 per month and the average survivor
benefit under FERS was $440. As was noted earlier, FERS benefits are smaller than those under
CSRS both because employees retiring under FERS had fewer years of service than workers who
retired under CSRS, and because FERS benefits are intended to be supplemented by Social
Security and the TSP.7
Table 6. Average Monthly Annuity Payments to Retirees and Survivors in 2009
(in thousands of dollars)

CSRS FERS
All Retirees
and Survivors
Retired Employees Annuitants
1,540,830 337,425 1,878,255
Percentage of Total
82.0
12.0
100
Mean monthly annuity
$2,899
$1,051
$2,567
Median monthly benefit
$2,534
$766
$2,255
Survivor Annuitants
569,720 33,494 603,214
Percentage of Total
94.4
5.6
100
Mean monthly benefit
$1,360
$440
$1,309

7 In December 2009, the average monthly Social Security benefit among all retired workers was $1,164. The average
monthly benefit for a nondisabled surviving spouse was $1,124.
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Federal Employees’ Retirement System: Summary of Recent Trends


All Retirees
CSRS FERS
and Survivors
Median monthly benefit
$1,206
$341
$1,163
Total Annuitants
2,110,550 370,919 2,481,469
Percentage of Total
85.1
14.9
100
Source: Office of Personnel Management, Statistical Abstract of Federal Employee Benefits Program.
Cost-of Living Adjustments under CSRS and FERS
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
last year in which a COLA was applied. If consumer prices as measured by the CPI-W do not
increase between the third quarter of the base year and the third quarter of the current calendar
year, there is no COLA for annuities paid under CSRS or FERS. The “effective date” for COLAs
is December, but they first appear in benefit checks issued in January.
Under FERS, COLAs are paid only to retired workers who are 62 or 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.8
From the third quarter of 2008 (the last year in which a COLA was applied) to the third quarter of
2010, the CPI-W fell by 0.6%. Therefore, there is no automatic COLA under either CSRS or
FERS in January 2011. (See Table 7.)
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

8 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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Federal Employees’ Retirement System: Summary of Recent Trends

Change in CPI from
Date Paid
CSRS COLA
FERS COLA
3rd Qtr to 3rd Qtr
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
January
2008
2.3 2.0 2.3
January
2009
5.8 4.8 5.8
January 2010
0.0
0.0
-2.1
January 2011
0.0
0.0
-0.6
Source: Office of Personnel Management.
Income and Expenditures of the Civil Service
Retirement and Disability Fund
The CSRDF began FY2009 with a balance of $723.2 billion. By law, these assets are invested in
special-issue U.S. Treasury bonds. The balance of the trust fund represents budget authority
available to pay benefits under both CSRS and FERS. The fund’s year-end 2009 balance of
$748.2 billion was more than 11 times the value of the CSRS and FERS annuities paid from the
fund that year.
The 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
($3.5 billion in 2009) consists of employee contributions to CSRS and FERS. These contributions
are equal to 7.0% of base pay under CSRS and 0.8% of base pay under FERS.9 Smaller 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 under CSRS.
The civil service retirement trust fund’s largest sources of income are (1) interest payments on the
U.S. Treasury bonds it holds, (2) annual payments 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. Agency contributions under CSRS
are equal to 7.0% of payroll, and are supplemented by transfers from the general fund of the

9 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 scheduled 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 December 31,
2002, but the increased contributions were repealed by P.L. 106-346.
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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 were equal to 11.2% of pay in 2009. These agency contributions recently
increased to 11.7% of pay, as of October 1, 2010. These three sources of income are intra-
governmental transfers that increase 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.10
Expenditures from the CSRDF consist mainly of payments to retired federal employees and their
surviving dependents. Annuity payments totaled $67.6 billion in 2009. Payments to the estates of
decedents and payments to separating employees accounted for another $293 million. The
administrative expenses of the fund were $142 million, or 0.21% of expenditures.
Table 8. Income and Expenditures of the Civil Service Retirement and Disability
Fund, 2009-2011
(in millions of dollars)
FY2010
FY2011

FY2009
(est.)
(est.)
Beginning balance
$723,194
$748,195
$777,178
Income to the fund



Cash transactions:



Employee contributions
$3,459
$3,776
$3,602
District of Columbia
$38
$27
$26
Other employee deposits
$586
$575
$584
Intragovernmental transfers:



Agency contributions
$17,368
$16,848
$17,555
Postal Service (total)
$2,955
$3,937
$4,208
Interest on securities
$36,538
$41,512
$41,824
General fund receipts
$31,422
$32,050
$33,150
Re-employment offset
$44
$46
$46
Total income to the fund
$93,061
$99,323
$101,469
Expenditures from the fund



Employee and survivor annuities
-$67,618
-$69,956
-$72,169
Refunds and payments to estates
-$293
-$282
-$278
Administration
-$142
-$95
-$103
Total expenditures from the fund -$68,060
-$70,340 -$72,557
Ending balance
$748,195
$777,178
$806,090
Source: U.S. Office of Management and Budget, Budget of the United States Government, FY2011.

10 See CRS Report RL30023, Federal Employees’ Retirement System: Budget and Trust Fund Issues, by Katelin P.
Isaacs.
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Recent Trends in the Balance of the Civil Service
Retirement and Disability Fund
Between 1990 and 2009, the balance of the CSRDF rose from $236 billion to $748 billion, an
increase of 217%. (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.
Until 1969, 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.11 When Congress passed
the legislation that created FERS in 1986, the law required that the full actuarial value of benefits
accrued each year by federal employees under FERS (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 18 to 20 years of retirement
and disability benefits.
Table 9. Income and Expenditures of the Civil Service Retirement Fund,
1990 to 2011
(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
450.6
1999 74.5
-43.9
481.2
2000 76.0
-45.2
512.0
2001 77.9
-47.4
542.5
2002 80.1
-49.0
573.6
2003 78.4
-50.4
601.6
2004 82.4
-52.3
631.7
2005 83.7
-54.8
660.6
2006 87.2
-58.3
689.5
2007a 89.9
-78.4
701.0
2008 90.9
-63.9
728.0
2009
93.1 -67.6
748.2
2010b 93.3
-70.2
777.2
2011b 101.5
-72.4
806.1

11 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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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.
b. Data for 2010 and 2010 are estimated.
Number of Civil Service Annuitants and Total
Annuity Payments, 1970 to 2008
The number of people receiving civil service annuity payments has risen more than 160% since
1970, but the rate of increase has slowed since 1985. (See
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Table 10.) The rapid rise in the number of civil service annuitants from less than 1 million in
1970 to approximately 2 million in 1985 resulted from the increase in federal employment that
occurred between 1940 and 1955. Throughout the 1930s, civilian federal employment (including
postal employees) was less than 1 million. The first year in which there were more than 1 million
people in the federal workforce was 1940. By 1955, civilian federal employment had reached 2.4
million. After 1955, civilian federal employment increased much more slowly. It reached nearly 3
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 steady increase in the number of civil service annuitants in the years since 1985. Between
1985 and 2008, the number of civil service annuitants rose from just under 2 million to almost 2.5
million.
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—increase
the nominal value of civil service annuities, but do not increase in the real value of these
annuities. COLAs are intended to keep purchasing power from eroding due to the effects of
inflation.12
Under current law, the real value of a civil service annuity either remains constant (CSRS) or
declines (FERS) during retirement.13 Therefore, the increase in the real value of annuities has
been the result of increases in the average value of the “high-three” average pay on which these
annuities are based. Rates of increase in the high-three average pay of retiring federal employees
are in turn affected by (1) adjustments to pay for each grade-and-step level, (2) special pay
increases such as locality pay adjustments, (3) the distribution of federal employees among
various grade-and-step levels over time, and (4) average length of service (because each
additional year of service tends to increase the high-three 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 will be workers who were enrolled in FERS rather than CSRS. FERS annuities are
smaller than CSRS annuities, but they are supplemented by Social Security benefits and the TSP.

12 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.
13 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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Table 10. Annuitants and Annuity Payments, 1970 to 2011
Year
Total Annuitants
Payments in Nominal
Payments in Constant
(thousands)
Dollars (millions)
2009 Dollars (millions)
1970 962 $2,746
$15,183
1975 1,391 7,048 28,104
1980 1,675 14,662
38,173
1985 1,971 23,012
44,881
1990 2,143 31,036
50,942
1995 2,311 38,319
53,941
2000 2,372 45,072
56,152
2001 2,380 47,244
57,229
2002 2,383 48,838
58,239
2003 2,290 50,248
58,585
2004 2,404 52,048
59,110
2005 2,423 54,593
59,968
2006 2,449 57,809
61,517
2007 2,463 60,860
62,970
2008 2,471 63,432
63,205
2009 2,510 67,618
67,618
2010a 2,533 69,956 68,584
2011a 2,557 72,169 69,571
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.
Civilian Federal Employment, 1960 to 2008
Between 1990 and 2006, the number of civilian federal employees (including the U.S. Postal
Service, which participates in both CSRS and FERS) fell from 3.1 million to 2.7 million. (See
Table 11.) Civilian federal employment outside the Postal Service fell from 2.31 million in 1990
to 1.94 million in 2006, a decline of 16%. From 2006 to 2008, total federal employment rose
from 2.7 million to 2.8 million. Non-postal employment rose from 1.88 million to 1.96 million.
Employment in the judicial branch (34,000) exceeded employment in the legislative branch
(31,000) in 2006. From 1980 to 2008, employment in the legislative branch declined from 40,000
employees to 31,000 employees. Over the same period, employment in the judicial branch rose
from 15,000 to 34,000 employees.
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Table 11. Civilian Federal Employment, 1960 to 2008
(Total employment, in thousands, as of September 30 each year)
Year
Legislative
Judicial
Executive
Postal
Branch
Branch
Branch
Service
Total
1960 23
5 1,808 563
2,399
1965 26
6 1,901 596
2,529
1970 31
7 2,203 726
2,967
1975 39
10 2,149 699
2,897
1980 40
15 2,161 660
2,876
1985 39
18 2,252 750
3,059
1990 38
24 2,250 817
3,129
1995 33
29 2,012 845
2,919
2000 31
32 1,778 861
2,702
2005 31
34 1,872 764
2,701
2006 29
34 1,880 757
2,700
2007 31
34 1,888 802
2,755
2008 31
34 1,960 775
2,800
Source: Office of Personnel Management.
Age Distribution of Executive Branch Employees
Employees of the federal government are older on average than workers in the private sector.
Forty-two percent of employees in the executive branch were under age 45 in March 2009.
Thirty-four percent were between the ages of 45 and 54, and 24% were aged 55 or older. (See
Table 12.) In contrast, according to data collected by the Bureau of the Census, 58% of wage and
salary workers in the private sector aged 21 and older were under age 45 in 2007. Twenty-three
percent of private sector employees were aged 45 to 54, and 19% were aged 55 and older.14
Under CSRS, an employee with 30 or more years of service can retire with an immediate,
unreduced annuity at age 55. The minimum retirement age under FERS is 56. In both CSRS and
FERS, an employee with 20 or more years of service can retire at 60. About one in three 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 have 30 or more years of service, not all will retire as soon as they are
eligible. The average age among all federal employees who retired in 2009 was 59. The average
among those who took normal retirement—as opposed to early retirement or disability
retirement—was 61.15

14 CRS analysis of data from the Current Population Survey. Based on wage and salary workers employed in the
private sector.
15 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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Table 12. Age Distribution of Executive Branch Employees
(Employees in thousands, as of March, 2009)
Age
Under Age
45
45 -49
50 -54
55 -59
60 -64
65 or
older
Total
Number of
employees
822 325
338
275
151 60 1,971
Percent 41.7
16.5
17.1
14.0
7.7
3.0
100%
Source: U.S. Office of Personnel Management.

Author Contact Information

Katelin P. Isaacs

Analyst in Income Security
kisaacs@crs.loc.gov, 7-7355


Acknowledgments
This report was originally prepared by former CRS Specialist Patrick Purcell. Please direct any inquiries to
the listed author.

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