Federal Pension Value
Price your FERS or CSRS annuity as a lump sum in today’s dollars. Uses the statutory cost-of-living rules, the OPM Board of Actuaries assumptions and SSA life tables, and shows what the same income would cost to buy.
Reviewed by Jonathan D., 20-year federal employee · Formulas verified against OPM CSRDF Annual Report ·
Gross, before the survivor reduction and before tax. If you do not know it, run the FERS or CSRS calculator first.
CSRS gets the whole index increase. FERS gets a trimmed one under 5 U.S.C. 8462(b), which is why the same dollar annuity is worth less under FERS.
Not modeled: a CSRS component. If you transferred from CSRS and part of your FERS annuity is computed under CSRS, OPM applies CSRS COLA rules to that part, which “do not require the annuitant to be age 62” (CSRS/FERS Handbook ch. 2, 2B4.1-1). This page applies the FERS rules to the whole annuity, so it understates that part's value.
FERS: Partial is fixed by law at a survivor base of half the annuity (cost 5 percent of the annuity); Full costs 10 percent. 5 U.S.C. 8419(a)(1).
SSA publishes separate columns. Your federal annuity itself is not priced by sex.
Default is 20.29 years from the SSA Period Life Table, 2023 (2026 Trustees Report). Edit it if you want to plan to a specific age.
Defaults are the OPM Board of Actuaries assumptions used to value the Civil Service Retirement and Disability Fund: 4 percent interest and 2.4 percent inflation. For a market rate instead, the 20-year Treasury was 5.67 percent on 2026-10-02.
| Discount rate | Present value | Change |
|---|---|---|
| 3.0% | $763,300 | +$68,073 |
| 4.0% (yours) | $695,227 | no change |
| 5.0% | $635,771 | -$59,456 |
| Modeled | Not modeled |
|---|---|
| The FERS cost-of-living brackets in 8462(b)(1), including the behaviour at exactly 3 percent | Year-to-year variation in inflation. One constant assumption is applied to every year |
| The under-62 suppression in 8462(c)(3), with the special provision exceptions as a toggle | The month-by-month proration of the first year’s adjustment under 8462(c)(1) |
| For a regular FERS retiree under 62, the first COLA lands on the first December 1 on which the retiree is 62 (8462(b)(1), (c)(3)(A)), with 62 reached the day before the 62nd birthday (OPM Handbook ch. 46; 5 CFR 842.502). It is set from your birth month, and for a December birthday the day (born December 1 or 2 gets that December’s COLA), and each later COLA lands on December 1. Your annuity year is assumed to start in your birthday month | For everyone else, COLAs step on each anniversary of the start date rather than on December 1 |
| A CSRS partial survivor election on any base you enter, down to $1 (8339(j)(1)); blank means half the annuity. FERS partial is fixed by law at half (8419(a)(1)) | FERS disability annuities under 8452: 60 percent of high-3 for 12 months with no COLA, then 40 percent, the Social Security disability offset, and the recomputation at 62. The form refuses them and points to the FERS disability calculator |
| FERS COLA rules applied to the whole of a FERS annuity | A CSRS component in a FERS annuity (CSRS transferees). OPM Handbook ch. 2, 2B4.1-1: “The CSRS portion of the annuity is subject to CSRS COLA rules, rather than FERS COLA rules. CSRS COLA rules do not require the annuitant to be age 62.” That portion gets the full index increase, before 62 too, so the value shown understates a transferee’s annuity |
| The full index increase for CSRS under 8340(b) | The rounding of each monthly installment down to the dollar under 8462(d) |
| The survivor reductions in 8419(a) for FERS and 8339(j)(4) for CSRS | The value of the survivor annuity itself. This prices the retiree’s own stream only |
| Monthly-in-arrears discounting, because 5 U.S.C. 8345(a) makes one twelfth of the annual amount “the monthly rate payable on the first business day of the month after the month ... for which it has accrued”: the COLA steps once a year, and each year’s twelve installments are discounted at their own month-end dates | Payment timing inside a month, and the exact day of the month your annuity lands |
| SSA period life table defaults, with interpolation between published ages flagged in the form, and the partial final year a decimal life expectancy produces (20.29 years pays 243 months, not 240) | Future mortality improvement, joint life expectancy, and your own health |
| A sensitivity table one point either side of your discount rate | Tax. The annuity is taxable income and the present value shown is pre-tax |
Precision limit: a present value is only as good as its assumptions, and reasonable people pick different ones. Treat the sensitivity table as the real answer and the single headline figure as its midpoint. The life expectancy default is a period table, which reads short for someone retiring today and biases the value low. The figure above discounts your annuity the way 8345(a) pays it, one monthly installment at a time and each one after the month it covers. Valuing it instead as a single yearly payment arriving each January — the shortcut most present-value write-ups take — overstates it by about 1.6 percent at a 3 percent discount rate, 2.1 percent at 4 percent and 3.0 percent at 5.67 percent, and the result panel shows that gap on your own numbers.
The diet cost-of-living rule is the whole story
Two retirees, same salary, same years, same age. One is CSRS and one is FERS. The CSRS annuity is worth noticeably more per dollar of payment, and the reason is one sentence of statute. CSRS gets the whole index increase. FERS gets the lesser of the increase or 2 percent when prices rise 3 percent or less, and the increase minus a point when they rise faster.
OPM's actuaries put a number on the gap. Their long-term assumption is 2.40 percent inflation and a 1.92 percent FERS adjustment, and they say in the report that the second figure is 80 percent of the first. Over a 25-year retirement, losing a fifth of your inflation protection every year compounds into a materially smaller stream.
Retiring before 62 costs more than the age reduction
A regular FERS retiree who leaves at 57 gets no cost-of-living increase until the first December 1 on which they are 62. Five or more frozen years do not sound severe, but they lower the base that every later increase builds on, so the loss never gets made up. Tick the special provision box on the form and the same inputs produce a visibly larger present value, which is the cleanest way to see what those frozen years are worth.
What the pension is worth against what it would cost
The purchase price shown next to the present value comes from published commercial payout rates, and it is deliberately unflattering to the insurer. Those contracts pay a flat amount forever, with no inflation protection, and they charge women more because they live longer. Your federal annuity rises with prices and is priced the same for everyone. If replacing a level annuity already costs that much, replacing an indexed one costs more.