The "Story" Behind the CSRS Offset |  |  |
Prior to January 1, 1984, there was only one major retirement system for Federal employees: the Civil Service Retirement System (CSRS). By law, Federal employees covered by CSRS were excluded from Social Security Federal Insurance Contributions Act (FICA) coverage and taxes.
In 1983, legislation changed to require FICA coverage for new Federal employees who were:
- Hired after December 31, 1983, or
- Rehired after December 31, 1983, after a break in CSRS coverage of more than 1 year.
These employees were placed in an interim retirement plan that provided for full FICA deductions from pay and reduced CSRS reductions. This interim plan was the precursor to the CSRS Offset.
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