CSRS Employee Deductions and Agency Contributions FERS i 

Chapter 30
 

Table of Contents 

Subchapter 30A CSRS 

Part 30A1 General Information 

Section 30A1.1-1 Overview ......................................... 1
 

A. Introduction ................................................. 1
 

B. Topics Covered ............................................... 1
 

C. Organization of Subchapter ....................................... 1
 

D. Statement of Authority .......................................... 1
 

Section 30A1.1-2 Basic Pay ........................................ 2
 

A. Definition .................................................. 2
 

B. Included in Basic Pay ........................................... 2
 

C. Excluded from Basic Pay ........................................ 3
 

Part 30A2 Deductions and Contributions 

Section 30A2.1-1 Amount of Employee Deductions and Agency Contributions ...... 4
 

A. Employee Deductions ........................................... 4
 

B. Deceased Employees ........................................... 4
 

C. Agency Contributions ........................................... 4
 

D. Reemployed Annuitants ......................................... 5
 

E. Law Enforcement Officers and Firefighters ............................. 5
 

F. Public Law 105-33, "The Balanced Budget Act of 1997" .................... 6
 

Section Section 30A2.1-2 CSRS Offset Employees ......................... 8
 

A. Employee Deductions ........................................... 8
 

C. Agency Contributions ........................................... 9
 

D. Table of Deduction and Contribution Rates ............................. 10
 

Section 30A2.1-3 CSRS Interim Service (1984-1986) ........................ 11
 

A. General .................................................... 11
 

B. Employee Deductions ........................................... 11
 

C. Agency Contributions ........................................... 11
 

D. Effective Dates ............................................... 11
 

E. OASDI Tax Rates, 1984-1986 ..................................... 11
 

Part 30A3 Procedures 

Section 30A3.1-1 Reporting and Remitting Deductions and Contributions ......... 12
 

A. General .................................................... 12
 

Section 30A3.1-2 Adjustment of Errors ................................ 13
 

A. General .................................................... 13
 

CSRS and FERS Handbook April, 1998 
ii CSRS Employee Deductions and Agency Contributions FERS 

Chapter 30
 

Subchapter 30B FERS 

Part 30B1 General Information 

Section 30B1.1-1 Overview ......................................... 14
 

A. Introduction ................................................. 14
 

B. Organization of Subchapter ....................................... 14
 

C. Applicable CSRS Provisions ...................................... 14
 

D. Statement of Authority .......................................... 14
 

Section 30B1.1-2 Normal Cost Percentage ............................... 15
 

A. Definition .................................................. 15
 

B. General .................................................... 15
 

C. Categories of Employees ......................................... 15
 

D. Notice of Updated Normal Cost Percentages ............................ 15
 

Part 30B2 Deductions and Contributions 

Section 30B2.1-1 Employee Deductions ................................. 16
 

A. Amount of Employee Deductions ................................... 16
 

B. Effective Date ............................................... 17
 

C. Reemployed Annuitants ......................................... 17
 

D. Law Enforcement Officers and Firefighters ............................. 17
 

E. Air Traffic Controllers .......................................... 17
 

Section 30B2.1-2 Agency Contributions ................................ 18
 

A. Amount of Contributions ........................................ 18
 

Part 30B3 Adjustment of Errors 

Section 30B3.1-1 Correction of Errors ................................. 19
 

A. Underpayments ............................................... 19
 

Subchapter 30C Job Aids 

Section 30C1.1-1 Tables ........................................... 20
 

History of Deductions From Basic Pay for Those Covered Under CSRS ........... 21
 

Social Security Wage Base Table ............................... 23
 

Table of Normal Cost Percentages .................................... 24
 

April, 1998 CSRS and FERS Handbook 
 

 CSRS Employee Deductions and Agency Contributions
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Chapter 30
 

Subchapter 30A CSRS 

Part 30A1 General Information 

Section 30A1.1-1 Overview 

A.	 Introduction This subchapter covers employee deductions for retirement from basic pay 

and agency contributions to the Civil Service Retirement and Disability 

Fund for employees covered by the Civil Service Retirement System 

(CSRS). 

B. Topics Covered	 This subchapter covers -­

•	 The definition of basic pay; and 

•	 The amount of employee deductions and agency contributions for each 

type of employee under CSRS, including CSRS Offset employees. 

C. Organization of The CSRS subchapter has three parts. 

Subchapter 

Part Name of Part Page 

30A1 General Information 1 

30A2 Deductions and Contributions 4 

30A3 Procedures 11 

NOTE: Subchapter 30B about employee deductions and agency 

contributions under FERS begins on page 13. 

D. Statement of 

Authority 

This subchapter is based on the laws and regulations cited below. 

• United States Code: 5 U.S.C. 8334 

• Code of Federal Regulations: 5 CFR 831.111 

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2 CSRS Employee Deductions and Agency Contributions 

Chapter 30 

Section 30A1.1-2 Basic Pay 

A. Definition The basic pay rate is the rate fixed by applicable law or regulation. 

B. Included in Basic 

Pay 

The following special types of pay are included in basic pay: 

1. Night differential pay for wage employees (prevailing rate). 

2. Environmental differential pay for employees exposed to various degrees 

of hazard, physical hardship, and working conditions of an unusual 

nature. 

3. Additional rumuneration pay (also known as Panama Area differential 

pay) and tropical differential pay for citizen employees of any agency 

on the Isthmus of Panama. 

4. Premium pay for: 

• Standby time under 5 U.S.C. 5545(c)(1), limited to a maximum of 25 

percent of the minimum rate of pay for GS 10 (primarily affects 

firefighters); and 

• Irregular, unscheduled overtime authorized under 5 U.S.C. 5545 

(c)(2) for law enforcement officers, limited to a maximum of 25 

percent of the rate of basic pay for the position (administratively 

uncontrollable overtime). 

NOTE:	 Public Law 101-173, enacted November 27, 1989, amended 

the previous method by which premium pay is determined for 

irregular, unscheduled overtime duty performed by Federal 

employees. The amended computation for premium pay affects 

overtime duty performed on or after the first day of the first 

applicable pay period beginning after September 30, 1990. 

5. Special pay established for recruiting and retention purposes under 

5 U.S.C. 5303. 

6. Interim geographic adjustments made under Public Law 101-509, the 

Federal Employees Pay Comparability Act of 1990. 

7. Locality-based comparability payments to begin in FY 1994, made 

under Public Law 101-509, the Federal Employees Pay Comparability 

Act of 1990. 

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Chapter 30 

Section 30A1.1-2 Basic Pay (Cont.) 

C. Excluded from
 

Basic Pay
 

The following are excluded from basic pay: 

1. Foreign post differential pay for wage employees as provided by Public 

Law 86-707 (approved September 6, 1960) and implementing 

regulations. 

2. Night differential pay and foreign or non-foreign post differential pay of 

General Schedule and GM employees. 

3. Bonuses, allowances, overtime, holiday, and military pay. 

NOTE:	 Under the Work Hours Act of 1962 (Public Law 87-581, 

approved August 13, 1962) certain hourly wage employees 

receive overtime pay for work in excess of 8 hours a day even 

if their total regular (non-overtime) hours during a work week 

are less than 40 hours. For these employees, basic pay is 

determined at the base rate for 40 hours, excluding the 

additional part of the pay for any overtime hours within the 

40–hour week. 

4. A lump-sum payment covering accrued and accumulated leave. 

5. Uniform allowances. 

6. Retroactive pay granted to a retired or deceased employee, pursuant to a 

wage survey. 

7. Payment for credit hours under 5 U.S.C. 6127. 

8. Premium pay for certain air traffic controllers, authorized by Public Law 

97-276. 

9. Supplemental payments from the Office of Workers' Compensation 

Programs (OWCP). (When an employee's salary is supplemented by 

OWCP payments, only the employee's actual salary is basic pay.) 

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4 CSRS Employee Deductions and Agency Contributions 

Chapter 30 

Part 30A2 Deductions and Contributions 

Section 30A2.1-1 Amount of Employee Deductions and Agency Contributions 

A. Employee The exact amount of retirement deductions withheld from basic pay is set 

Deductions by law. Currently, employing agencies must deduct and withhold the 

following amounts from full (non-Offset) CSRS employees' basic pay: 

Employee or Member Percentage of 

Basic Pay

 Regular Employee 7.0%

 Law Enforcement Officer or Firefighter 7.5%

 Congressional Employee 7.5%

 Member of Congress 8.0%

 Bankruptcy Judge 8.0%

 Judge of the United States

 Court of Military Appeals 8.0%

 United States Magistrate 8.0% 

NOTE 1: See paragraph F for changes in rates effective January, 

NOTE 2: See section 30A2.1-2 for CSRS Offset employee deductions. 

NOTE 3: See section 30C1.1-1 for the history of deductions from basic 

pay. 

B. Deceased The applicable percentage of retirement deductions is withheld from the 

Employees basic pay due a deceased employee for the number of days in a pay status 

during the pay period in which the employee died. 

The deduction must be stated on the next regular agency payroll together 

with the agency matching contribution. 

C. Agency 

Contributions 

For "full" CSRS (that is, non-Offset) employees, the employing agency 

must contribute to the Retirement Fund an amount equal to the retirement 

deductions withheld from the pay of its employees. (See paragraphs D and 

F below for exception to this rule.) 

NOTE:	 See section 30A2.1-2 for the agency contribution rates for 

CSRS Offset employees. 

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 CSRS Employee Deductions and Agency Contributions 5 

Chapter 30
 

Section 30A2.1-1 Amount of Employee Deductions and Agency Contributions (Cont.)
 

D. Reemployed 

Annuitants 

1. Since enactment of Public Law 97-346 on October 15, 1982, 

reemployed annuitants, other than those serving on an intermittent basis, 

may elect to have employee deductions withheld from their pay during 

reemployment. If the reemployment continues one year or more, these 

deductions eliminate the need for the annuitant to pay OPM a subsequent 

deposit, with interest, to qualify for a supplemental annuity. 

2. At the time of reemployment, the employing agency should advise 

reemployed annuitants of the right to elect to have employee deductions 

withheld currently from pay. Alternatively, annuitants may elect to wait 

and make a lump sum deposit, with interest, for reemployment service 

at the time of separation, if they want the service included in the 

computation of a supplemental or redetermined annuity. (See 

Chapter 21, Service Credit Payments for Civilian Service, for rules on 

computing deposits and applicable interest rates.) 

3. The employing agency does not make a matching contribution for 

employee deductions paid by a reemployed annuitant. 

NOTE:	 Generally, agencies must withhold from the pay of reemployed 

annuitants the amount of annuity allocable to the period of 

actual employment unless payment of the annuity terminates 

upon reemployment. (See Chapter 100, Reemployed 

Annuitants, for more information.) 

E.	 Law Enforcement 

Officers and 

Firefighters 

Seven and one-half percent basic pay deductions and matching 7.5 percent 

agency contributions are mandatory for employees covered as law 

enforcement officers and firefighters. 

1. If an agency believes a position should be approved as a law 

enforcement officer or firefighter position, corroborating evidence must 

be submitted to OPM for a determination. Prior to the receipt of OPM's 

decision, the agency must withhold 7.0 percent of basic pay; the agency 

must not withhold the additional .5 percent or make the matching .5 

percent agency contribution. Upon receipt of OPM approval of the 

position, the effective date of the additional withholding and the 

matching agency contribution is retroactive to the beginning date of 

covered service in the law enforcement officer or firefighter position. 

(See section 30A3.1-2.) 

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6 CSRS Employee Deductions and Agency Contributions 

Chapter 30
 

Section 30A2.1-1 Amount of Employee Deductions and Agency Contributions (Cont.)
 

E.	 Law Enforcement 

Officers and 

Firefighters 

(Cont.) 

F.	 Public Law 105­

33, "The Balanced 

Budget Act of 

1997" 

2. The 7.5 percent deductions must be withheld, and matching 

contributions must be made, if the kind of service is covered, even if it 

is apparent that an employee probably will not serve long enough in an 

approved position to qualify for retirement under the special provisions. 

NOTE:	 The extra .5 percent deductions are not separately refundable 

even if the employee fails to qualify for law enforcement 

officer or firefighter retirement benefits. (See section 

32A1.1-10B in Chapter 32, Refunds.) 

3. When an employee in an approved position is detailed to a nonapproved 

position, coverage is considered continuous and the 7.5 must be 

withheld. Conversely, 7.5 percent deductions are not withheld when an 

employee in a nonapproved position is detailed to an approved position. 

NOTE:	 See Chapter 46, Special Retirement Provisions for Law 

Enforcement Officers, Firefighters, Air Traffic Controllers, 

and Military Reserve Technicians, for additional information 

on law enforcement officers and firefighters. 

The "Balanced Budget Act of 1997" contains provisions that will 

temporarily change the agency contribution rate for the Civil Service 

Retirement System and the meployee withholding rate for both the CSRS 

and the Federal Employee Retirement System. 

All agencies, with the exception of the U.S. Postal Service and the 

Metropolitan Washington Airports Authority, must contribute an increase 

percentage of the basic pay of CSRS and CSRS-Offset covered employees, 

effective with the first pay period beginning on or after October 1, 1997. 

The agency contribution rate for most CSRS and CSRS-Offset covered 

employees increases to 8.51%. the agency contribution rate will revert to 

7.5% in October 2002, and to the rate before the increase under PL 105-33 

in January 2003. 

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Chapter 30
 

F.	 Public Law 105- The new agency contribution rates for each category of CSRS employee, 

33, "The Balanced effective with the first pay period beginning on or after October 1, 1997 are 

Budget Act of 

1997" (Cont.) 

Classification Percentage of 

Basic Pay (%) 

"Regular employees 8.51 

Congressional employees 

Law Enforcement Officers 

Firefighters 

9.01 

Members of Congress 

Court of Federal Claims judges 

U.S. Magistrates 

U.S. Court of Appeals for Armed Forces judges 

Bankruptcy judges 

9.51 

CSRS and FERS Employee Witholdings 

The rate of withholding for all CSRS and FERS covered employees will 

increase in 3 steps. The first increase will be implemented with the first 

pay period beginning on oi after January 1, 1999. All-in-all, the CSRS and 

FERS withholding rates will increase 0.5 percent. On January 1, 2003, the 

rates will revert back to the rates in effect before PL 105-33. 

The increase in the employee withholding rate, for all categories of CSRS 

and FERS coverage, will be implemented as follows: 

Effective Date of Increase (First 

pay-period beginning on or after) 

Increase (%) 

January 1, 1999 +0.25 

January 1, 2000 +0.15 

January 1, 2001 +0.10 

CSRS and FERS Handbook	 April, 1998 
8 CSRS Employee Deductions and Agency Contributions 

Chapter 30 

Section Section 30A2.1-2 CSRS Offset Employees 

A. Employee 

Deductions 

1. Except as provided in subparagraph 2, the employee deduction rates for 

each category of CSRS Offset employees are as follows: 

Regular Employee: 

• 7 percent, minus 

• The Old Age, Survivors, and Disability Insurance (OASDI) tax rate. 

(See paragraph B for the OASDI tax rates.) 

Law Enforcement Officer, Firefighter, and Congressional Employee: 

• 7.5 percent, minus 

• The OASDI tax rate. 

Member of Congress, a U.S. magistrate, a judge of the U.S. Court of 

Military Appeals, and a bankruptcy judge: 

• 8 percent, minus 

• The OASDI tax rate. 

NOTE 1:	 See the table in paragraph D for CSRS Offset employee 

deduction rates and agency contribution rates. See paragraph F 

of section 30A2.1-1 for explanation of the increase in 

deduction rate beginning in 1999. 

NOTE 2:	 See Chapter 10, Coverage, for rules on determining whether an 

employee has CSRS Offset coverage. 

2. When the total basic pay paid in a calendar year reaches the Social 

Security maximum taxable wage base, the deduction rate reverts to the 

"full" CSRS employee withholding rate (7, 7.5, or 8 percent). Agencies 

must ensure that the deductions on the first dollar of basic salary paid to 

a CSRS Offset employee over the Social Security wage base are made at 

the full CSRS rate and that the reversion to full withholdings is reflected 

during the pay period in which it occurs. 

NOTE 1:	 See section 30C1.1-1 for the Social Security wage base table. 

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 CSRS Employee Deductions and Agency Contributions 9 

Chapter 30 

Section 30A2.1-2 CSRS Offset Employees (Cont.) 

A. Employee NOTE 2: Since remuneration for bonuses, overtime, etc., is subject to 

Deductions Social Security deductions, some employees' Social Security 

(Cont.) earnings may reach the wage base before their basic pay equals 

the wage base. Therefore, their Social Security OASDI 

deductions may end one or more pay periods before their 

retirement deductions revert to the 7 percent rate. 

EXAMPLE: Kirk's annual salary is $64,000. On the 20th pay period of 

1990, his basic pay reaches $45,000 and he has received $6,300 in overtime 

pay, which equals $51,300 (1990 Social Security maximum taxable wage 

base). At this time, Kirk does not pay any more Social Security tax but 

will continue to pay the reduced CSRS deduction rate of .80 percent until 

his basic pay reaches $51,300. At this point, the CSRS deduction rate will 

change to 7 percent. 

NOTE 3: If an employee has worked in more than one agency in a given 

year, wages from each agency must be combined to determine 

if he or she has reached the maximum taxable wage base. 

B. OASDI Tax Rates Current and past Social Security tax rates for Old Age, survivors, and 

Disability Insurance (OASDI) are listed below: 

OASDI TAX RATES 

Year 

1987 

1988 - 1989 

1990 and thereafter 

Employee Rate 

5.70% 

6.06% 

6.20% 

Employer Rate 

5.7% 

6.06% 

6.20% 

C. Agency 

Contributions 

The agency contribution rate for CSRS Offset employees is not offset by the 

OASDI tax. Agencies pay the full 7, 7.5, or 8 percent, as applicable. (See 

paragraph D below.) In addition, agencies pay the employer OASDI tax 

(which matches the employee tax) for CSRS Offset employees. 

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10 CSRS Employee Deductions and Agency Contributions 

Chapter 30 

Section 30A2.1-2 CSRS Offset Employees (Cont.) 

D. Table of DEDUCTION AND CONTRIBUTION RATES FOR 

Deduction and CSRS OFFSET EMPLOYEES 

Contribution 

Rates 

Type and Year Employee 

Deduction 

Rate* 

Agency 

Contribution 

Rate 

Member of Congress and 

Certain Judges 

1987 2.30% 8.0% 

1988-1989 1.94% 8.0% 

1990 and thereafter 1.80% 8.0% 

October 1997 1.80% 9.51% 

January 1999 2.05% 9.57% 

Congressional Employees 

1987 1.80% 7.5% 

1988-1989 1.44% 7.5% 

1990 and thereafter 1.30% 7.5% 

October 1997 1.30% 9.01% 

January 1999 1.55% 9.01% 

Law Enforcement Officers 

and Firefighters 

1987 1.80% 7.5% 

1988-1989 1.44% 7.5% 

1990 and thereafter 1.30% 7.5% 

October 1997 1.30% 9.01% 

January 1999 1.55% 9.01% 

All Other CSRS Offset 

Employees 

1987 1.30% 7.0% 

1988-1989 .94% 7.0% 

1990 and thereafter .80% 7.0% 

October 1997 .80% 8.51% 

January 1999 1.05% 8.51% 

*The employee deduction rate is the same as the Employee Deduction rate 

for full CSRS employees outlined in SEction 30A2.1-1 when basic pay 

exceeds the Social Security wage base (see paragraph A2) when basic pay 

exceeds the Social Security wage base (see paragraph A2). 

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Chapter 30
 

Section 30A2.1-3 CSRS Interim Service (1984-1986) 

A.	 General Service during the 1984-1986 period that was covered by both CSRS and 

Social Security is called "CSRS Interim" service. CSRS Interim employees 

were under provisions somewhat similar to the CSRS Offset provisions that 

have been in effect since 1986. Generally, CSRS Interim employers were 

subject to reduced CSRS deductions and to later offset (of their CSRS 

benefits) based on Social Security benefits earned during their Interim 

service. 

B. Employee 

Deductions 

The deduction rate for all CSRS Interim employees subject to reduced 

CSRS deductions was 1.3 percent of basic pay (even for basic pay 

exceeding the Social Security wage base). Thus, during CSRS Interim 

service, law enforcement officers, firefighters, and other special group 

employees paid the same retirement deductions as regular employees. 

C. Agency 

Contributions 

The agency contributions rates for CSRS Interim employees were the rates 

that normally applied to CSRS employees (7, 7.5, or 8 percent). 

D. Effective Dates CSRS Interim deductions first took effect on January 1, 1984. The last day 

that CSRS Interim deductions were in effect was the last day of the last pay 

period that began in 1986. (CSRS Interim employees were converted to 

CSRS Offset or FERS coverage on the first day of the first pay period 

beginning in 1987.) 

E. OASDI Tax 

Rates, 1984-1986 

In 1984, the OASDI tax rate was 5.4 percent for employees and 5.7 percent 

for employers. In 1985 and 1986, the OASDI tax rate was 5.7 for both 

employees and employers. 

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12 CSRS Employee Deductions and Agency Contributions 

Chapter 30 

Part 30A3 Procedures 

Section 30A3.1-1 Reporting and Remitting Deductions and Contributions 

A.	 General Employee deductions and agency contributions are remitted to the Office of 

Personnel Management (OPM) on Standard Form (SF) 2812. See 

Chapter 80, Payroll Office Reporting of Withholdings and Contributions, 

for a full discussion of how and when to report deductions and contributions 

on SF 2812. 

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Chapter 30
 

Section 30A3.1-2 Adjustment of Errors 

A.	 General When an agency fails to withhold the correct amount of retirement 

deductions, the error must generally be corrected. However, there are 

certain situations where the employee will have several options in dealing 

with the adjustment of the error. See Chapter 84, Corrections of Errors in 

Retirement Coverage, for a full discussion of the procedures for adjusting 

errors in deductions and contributions. 

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14 Employee Deductions and Agency Contributions FERS 

Chapter 30 

Subchapter 30B FERS 

Part 30B1 General Information 

Section 30B1.1-1 Overview 

A.	 Introduction Subchapter 30B contains the rules that apply to deductions from an 

employee's pay and to agency contributions made to the Civil Service 

Retirement and Disability Fund for coverage under the Federal Employees 

Retirement System (FERS). 

CSRS and FERS are substantially different in the statutory provisions 

regarding deductions and contributions. This subchapter explains how 

FERS differs from CSRS. It refers readers to the established parallel 

procedure or gives the FERS rule if it is different. 

B. Organization of The FERS subchapter has three parts. 

Subchapter 

Part Name of Part Page 

30B1 General Information 13 

30B2 Deductions and Contributions 15 

30B3 Adjustment of Errors 18 

C.	 Applicable CSRS 

Provisions 

D.	 Statement of 

Authority 

The following sections of subchapter 30A apply to FERS employees: 

Section 30A1.1-2 Basic Pay 

Section 30A3.1-1 Reporting and Remitting Deductions and Contributions 

The FERS subchapter is used on the laws and regulations cited below. 

• United States Code: 5 U.S.C. 8422 and 8423 

• Code of Federal Regulations: 5 CFR Part 841, subparts D and E 

April, 1998	 CSRS and FERS Handbook 
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Chapter 30 

Section 30B1.1-2 Normal Cost Percentage 

A.	 Definition "Normal cost" is an estimate of the percentage of pay that must be 

contributed for a typical group of new employees over their entire working 

careers in order to fully pay for their FERS basic benefits. 

B.	 General As a fully funded pension system, the normal cost of FERS derives 

completely from withholdings from the salaries of covered employees and 

contributions from employing agencies. 

Employee contributions are established by law and represent a small 

proportion of the normal cost for a FERS-covered employee; the remainder 

of the normal cost is carried by the employing agency. 

NOTE:	 See 5 CFR 841.401 et seq. for regulations concerning normal 

cost. 

C. Categories of	 OPM determines separate normal cost percentages for each group of 

Employees	 employees. These normal cost percentages are used by all agencies that 

have not been granted a single agency rate. See section 30C1.1-1 for a 

table listing the past and present normal cost percentages. 

D.	 Notice of Updated 

Normal Cost 

Percentages 

Any change in normal cost percentages is announced via a Federal Register 

notice. 

The notice of normal cost percentages includes a statement of: 

•	 The Governmentwide normal cost percentage and any single agency 

rates for each category of employees; and 

•	 The effective date of the changes. 

CSRS and FERS Handbook	 April, 1998 
 

16 Employee Deductions and Agency Contributions FERS 

Chapter 30 

Part 30B2 Deductions and Contributions 

Section 30B2.1-1 Employee Deductions 

A. Amount of 

Employee 

Deductions 

1. The regular employee deduction rate for FERS-covered employees is: 

• 7 percent of basic pay, minus 

• The OASDI tax deduction rate. (See section 30A2.1-2, paragraph B, 

for the OASDI deduction rates.) 

The deduction rate for FERS employees after 1989 is .80 percent 

(7 percent minus 6.2 percent). 

2. The employee deduction rate for FERS coverage for a Member of 

Congress, law enforcement officer, firefighter, air traffic controller, 

Congressional employee, or employee under section 302 of the Central 

Intelligence Agency Act of 1964 for Certain Employees is: 

• 7.5 percent of basic pay, minus 

• The OASDI tax deduction rate. 

3. The employee deduction rate remains at the rate in paragraphs A1 and 

A2 as if Social Security deductions were being made, even if Social 

Security deductions: 

• Have ceased because the employee's earnings have reached the Social 

Security maximum taxable wage base (see section 30C1.1-1), or 

• Are not made for any other reason. 

4. The table below shows the FERS employee deduction rates: 

Year Regular 

Employees 

Special Groups 

1987 1.30% 1.80% 

1988-1989 .94% 1.44% 

1990-1998 .80% 1.30% 

1999 1.05% 1.55% 

NOTE: See paragraph F in section 30A2.1-1 for an explanantion of the 

increase in employee deductions beginning in 1999. 

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Chapter 30 

Section 30B2.1-1 Employee Deductions (Cont.) 

B.	 Effective Date Retirement deductions under FERS are effective on the later of: 

• The first day of the first pay period beginning in 1987; or 

• The first day an employee is covered by FERS. 

C. Reemployed 

Annuitants 

The FERS deduction and contribution rules for reemployed annuitants differ 

from the CSRS rules. 

1. FERS deductions are not optional. Reemployed FERS annuitants 

(unless employed on an intermittent basis) must pay retirement 

contributions at the established employee deduction rate based on their 

basic pay before any offset due to receipt of annuity. In addition, the 

employee must pay OASDI taxes. 

2. The agency reemploying the annuitant must remit to the Retirement 

Fund an agency contribution determined at the established normal cost 

percentage based on the reemployed annuitant's basic pay before any 

offset. In addition, the agency must pay OASDI employer taxes. 

NOTE:	 See Chapter 100 for additional information on reemployed 

annuitants. 

D.	 Law Enforcement 

Officers and 

Firefighters 

Under FERS, OPM has delegated authority to agencies to approve positions 

as law enforcement officer or firefighter positions. Thus, agency decisions 

govern when additional deductions apply. As under CSRS, any employee 

in an approved position is subject to the special deduction rate, even if the 

employee will not qualify for special benefits. Also, the CSRS rules for 

deductions from employees on detail apply under FERS. (See section 

30A2.1-1, paragraph E.) 

NOTE: See Chapter 46 for detailed information on the retirement 

provisions for law enforcement officers and firefighters. 

E. Air Traffic Unlike CSRS air traffic controllers, FERS air traffic controllers pay the 

Controllers additional .5 percent in deductions to the Retirement Fund. 

NOTE: See Chapter 46 for detailed information on the retirement 

provisions for air traffic controllers. 

CSRS and FERS Handbook	 April, 1998 
18 Employee Deductions and Agency Contributions FERS 

Chapter 30 

Section 30B2.1-2 Agency Contributions 

A. Amount of 

Contributions 

The employing agency contribution to the Retirement Fund is an amount 

equal to: 

(Applicable Normal 

Cost Percentage Multiplied (Basic 

Less the Employee By Pay) 

Deduction Rate) 

NOTE:	 The agency is responsible for paying the entire normal cost 

(including both agency and employee share) to the Retirement 

Fund. See table in section 30C1.1-1. 

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Employee Deductions and Agency Contributions FERS 19 

Chapter 30 

Part 30B3 Adjustment of Errors 

Section 30B3.1-1 Correction of Errors 

A.	 Underpayments When it is determined that an agency has paid less than the correct total 

amount of the normal cost for any or all of its current or past employees, 

the agency must pay the total additional amount to the Retirement Fund. 

(See Chapter 84, Correction of Errors in Retirement Coverage, for a 

discussion of correction procedures.) 

CSRS and FERS Handbook	 April, 1998 
20 CSRS Employee Deductions and Agency Contributions FERS 

Chapter 30 

Subchapter 30C Job Aids 

Section 30C1.1-1 Tables 

This section provides the following tables as job aids: 

• History of Deductions From Basic Pay for Those Covered Under CSRS 

• Social Security Wage Base Table 

• Table of FERS Normal Cost Percentages 

April, 1998 CSRS and FERS Handbook 
 

 CSRS Employee Deductions and Agency Contributions 21 

Chapter 30 

Section 30C1.1-1 Tables (Cont.)
 

History of Deductions From Basic Pay for Those Covered Under CSRS
 

Percentage of 

Basic Pay 

Service Period 

Employee 2.5 8-1-20 to 6-30-26

3.5 7-1-26 to 6-30-42

5.0 7-1-42 to 6-30-48

6.0 7-1-48 to 10-31-56

6.5 11-1-56 to 12-31-69

7.0 1-1-70 to 12-31-98 

7.25 After 1999 

Member or employee for 2.5 8-1-20 to 6-30-26

Congressional employee service 3.5 7-1-26 to 6-30-42

5.0 7-1-42 to 6-30-48

6.0 7-1-48 to 10-31-56

6.5 11-1-56 to 12-31-69

7.5 1-1-70 to 12-31-98 

7.75 After 1999 

Member for Member service 2.5 8-1-20 to 6-30-26

3.5 7-1-26 to 6-30-42

5.0 7-1-42 to 8-1-46

6.0 8-2-46 to 10-31-56

7.5 11-1-56 to 12-31-69

8.0 1-1-70 to 12-31-98 

8.25 After 1999 

Law enforcement officer for law 2.5 8-1-20 to 6-30-26

enforcement service and 3.5 7-1-26 to 6-30-42

firefighter for firefighter service 5.0 7-1-42 to 6-30-48

6.0 7-1-48 to 10-31-56

6.5 11-1-56 to 12-31-69

7.0 1-1-70 to 12-31-74 

7.5 1-1-75 to 12-31-98 

7.75 After 1999 

Bankruptcy judge 2.5 8-1-20 to 6-30-26

3.5 7-3-26 to 6-30-42

5.0 7-1-42 to 6-30-48

6.0 7-1-48 to 10-31-56

6.5 11-1-56 to 12-31-69

7.0 1-1-70 to 12-31-83

8.0 1-1-84 to 12-31-98 

8.25 After 1999 

CSRS and FERS Handbook April, 1998 
22 CSRS Employee Deductions and Agency Contributions 

Chapter 30 

Section 30C1.1-1 Tables (Cont.)
 

History of Deductions From Basic Pay for Those Covered Under CSRS (Cont.)
 

Percentage of 

Basic Pay 

Service Period 

Judge of the United 6.0 5-5-50 to 10-31-56 

States Court of Military 6.5 11-1-56 to 12-31-69 

Appeals for service as a 7.0 1-1-70 to 9-23-83

judge of that court 8.0 9-24-83 to 12-31-98

8.25 After 1999 

United States 2.5 8-1-20 to 6-30-26 

Magistrate 3.5 7-1-26 to 6-30-42 

5.0 7-1-42 to 6-30-48 

6.0 7-1-48 to 10-31-56 

6.5 11-1-56 to 12-31-69 

7.0 1-1-70 to 9-30-87 

8.0 10-1-87 to 12-31-98

8.25 After 1999 

April, 1998 CSRS and FERS Handbook 
 

 CSRS Employee Deductions and Agency Contributions FERS 23 

Chapter 30 

Section 30C1.1-1 Tables (Cont.) 

< 

Social Security Wage Base Table 

Earnings subject to OASDI withholding 

CALENDAR 

YEAR 

1951 

1952 

1953 

1954 

1955 

1956 

1957 

1958 

1959 

1960 

1961 

1962 

1963 

1964 

1965 

1966 

1967 

1968 

1969 

1970 

1971 

1972 

1973 

1974 

1975 

MAXIMUM 

TAXABLE 

AMOUNT 

$ 3,600 

$ 3,600 

$ 3,600 

$ 3,600 

$ 4,200 

$ 4,200 

$ 4,200 

$ 4,200 

$ 4,800 

$ 4,800 

$ 4,800 

$ 4,800 

$ 4,800 

$ 4,800 

$ 4,800 

$ 6,600 

$ 6,600 

$ 7,800 

$ 7,800 

$ 7,800 

$ 7,800 

$ 9,000 

$10,800 

$13,200 

$14,100 

CALENDAR 

YEAR 

1976 

1977 

1978 

1979 

1980 

1981 

1982 

1983 

1984 

1985 

1986 

1987 

1988 

1989 

1990 

1991 

1992 

1993 

1994 

1995 

1996 

1997 

> 1998 

MAXIMUM 

TAXABLE 

AMOUNT 

$15,300 

$16,500 

$17,700 

$22,900 

$25,900 

$29,700 

$32,400 

$35,700 

$37,800 

$39,600 

$42,000 

$43,800 

$45,000 

$48,000 

$51,300 

$53,400 

$55,500 

$57,600 

$60,600 

$61,200 

$62,700 

$65,400 

$68,400< 

CSRS and FERS Handbook April, 1998 
24 Employee Deductions and Agency Contributions FERS 

Chapter 30 

Section 30C1.1-1 Tables (Cont.) 

Table of Normal Cost Percentages 

Governmentwide normal cost percentages effective at the beginning of the first 

pay period commencing on or after -­

Category of Employees January 1, 

1987 

October 1, 

1987 

October 1, 

1991 

October 1, 

1994 

October 1, 

1997 

Members of Congress 23.5% 20.9% 20.8% 19.1% 16.5% 

Congressional 

Employees 

23.8% 20.2% 20.1% 18.2% 16.7% 

Law enforcement 

officers, firefighters, 

and employees under 

section 302 of the 

Central Intelligence 

Agency Act of 1964 for 

Certain Employees 

31.2% 26.7% 28.6% 25.6% 24.6% 

Air traffic controllers 33.3% 28.4% 26.2% 23.2% 23.1% 

Military reserve 

technicians 

16.0% 13.7% 13.3% 12.1% 11.9% 

Employees under 

section 303 of the 

Central Intelligence 

Agency Act of 1964 for 

Certain Employees 

when serving abroad 

22.8% 19.0% 19.1% 17.1% 16.3% 

All other employees 16.1% 13.8% 13.7% 12.2% 11.5%

 All normal cost percentages in the table above include employee contributions. 

April, 1998 CSRS and FERS Handbook