Employees covered by the Civil Service Retirement System (CSRS) Offset retirement plan are covered by and paying into both CSRS and Social Security, earning retirement credit under both. All CSRS rules apply to CSRS Offset, including the age and service requirements for retirement eligibility.
The difference is that when a CSRS Offset employee retires, his/her annuity is computed under the same rules that apply to other employees under full CSRS. However, when the retired CSRS Offset employee becomes eligible for Social Security (usually at age 62), the Office of Personnel Management will reduce, or “offset,” the CSRS annuity by the value of the Social Security benefit earned during federal service performed after 1983 while covered by both CSRS and Social Security.
There is usually no loss of annuity because the employee will receive the approximate amount of the offset from Social Security (when he/she applies for benefits).
If the retired CSRS Offset employee never becomes eligible for Social Security benefits, there will be no offset of the CSRS annuity.
If the employee retires after age 62, the offset is made at retirement if he/she is eligible for Social Security benefits.