FEDERAL RETIREMENT CONSULTANT (FRC) PRACTICE EXAM QUESTIONS
AND CORRECT ANSWERS GRADE A
**Total Questions: 100**
**Format: Multiple Choice (4 options each)**
1. **The Federal Employees Retirement System (FERS) is a retirement plan for U.S. federal
civilian employees that consists of three components. These are:**
A) Social Security, CSRS, and TSP
B) Social Security, FERS Basic Benefit, and TSP
C) Medicare, Basic Benefit, and CSRS Offset
D) TSP, CSRS, and Social Security
**ANSWER: B**
**EXPLANATION:** FERS is a three-tiered system: 1) Social Security, 2) FERS Basic Benefit
Plan (a defined benefit annuity), and 3) the Thrift Savings Plan (TSP), a defined contribution
plan.
2. **The Civil Service Retirement System (CSRS) generally covers federal employees who
first entered service before:**
A) 1984
B) January 1, 1984
C) 1987
D) January 1, 1987
**ANSWER: B**
**EXPLANATION:** CSRS covers employees who entered federal service before January 1,
1984, and did not switch to FERS during open seasons.
,3. **A FERS employee becomes eligible for an immediate, unreduced retirement annuity at
age 62 with at least how many years of service?**
A) 5 years
B) 10 years
C) 20 years
D) 30 years
**ANSWER: A**
**EXPLANATION:** FERS offers an Immediate Retirement at Age 62 with 5+ years of
service. There is no reduction for age at 62.
4. **The FERS "Minimum Retirement Age" (MRA) is based on an employee's year of birth.
For someone born in 1970 or later, the MRA is:**
A) 55
B) 56
C) 57
D) 60
**ANSWER: C**
**EXPLANATION:** For individuals born in 1970 or later, the Minimum Retirement Age
(MRA) is 57. The MRA gradually increased from 55 to 57 for those born after 1947.
5. **Under FERS, an employee can retire at their MRA with 10+ years of service, but the
annuity is reduced by 5% per year for each year they are under age:**
A) 60
B) 62
C) 65
,D) 67
**ANSWER: A**
**EXPLANATION:** This is known as MRA+10 retirement. The annuity is permanently
reduced by 5% for each full year (5/12% per month) the retiree is under age 62 at
retirement.
6. **The FERS Special Retirement Supplement is designed to approximate the value of:**
A) The TSP account
B) The Social Security benefit earned during federal service until age 62
C) The CSRS annuity
D) Military retirement pay
**ANSWER: B**
**EXPLANATION:** The SRS is paid from retirement until age 62 (when Social Security
benefits become available) to FERS retirees who retire on an immediate annuity under age
62. It approximates the Social Security benefit attributable to their federal service.
7. **The FERS Basic Benefit annuity formula for a standard immediate retirement is:**
A) 1% x High-3 Average Salary x Years of Service
B) 1.1% x High-3 Average Salary x Years of Service (if age 62+ with 20+ years)
C) 1.5% x High-3 Average Salary x Years of Service
D) Both A and B are correct
**ANSWER: D**
**EXPLANATION:** The standard formula is 1% x High-3 x Years of Service. However, a 10%
bonus is given for retiring at age 62 or older with 20+ years of service, making the formula
1.1% x High-3 x Years of Service.
, 8. **An employee's "High-3" average salary is calculated based on the highest:**
A) Single year's salary
B) Three consecutive years of highest earnings
C) Three consecutive years of basic pay, which do not have to be the final three years
D) Final three years of service
**ANSWER: C**
**EXPLANATION:** The High-3 is the average of the highest three consecutive years of
basic pay (not including bonuses, overtime, etc.). These years can occur at any point in the
career, though they are often the final three.
9. **Under CSRS, the standard annuity formula for a general employee is:**
A) 1% x High-3 x First 5 years + 1.5% x High-3 x Next 5 years + 2% x High-3 x Service over 10
years
B) 1.1% x High-3 x All years of service
C) 1.5% x High-3 x First 20 years + 1.75% x High-3 x Years 21-30 + 2% x High-3 x Years over
30
D) 1.5% x High-3 x Years of service up to 10, 1.75% for years 11-20, and 2% for years over 20
**ANSWER: A**
**EXPLANATION:** The CSRS formula uses a tiered approach: 1.5% for the first 5 years,
1.75% for the second 5 years, and 2% for each year over 10. This is often simplified as 1.5%
x first 5, 1.75% x next 5, 2% x remainder, all multiplied by the High-3.
10. **The primary purpose of the Thrift Savings Plan (TSP) is to:**
A) Replace Social Security
B) Provide a defined benefit pension
AND CORRECT ANSWERS GRADE A
**Total Questions: 100**
**Format: Multiple Choice (4 options each)**
1. **The Federal Employees Retirement System (FERS) is a retirement plan for U.S. federal
civilian employees that consists of three components. These are:**
A) Social Security, CSRS, and TSP
B) Social Security, FERS Basic Benefit, and TSP
C) Medicare, Basic Benefit, and CSRS Offset
D) TSP, CSRS, and Social Security
**ANSWER: B**
**EXPLANATION:** FERS is a three-tiered system: 1) Social Security, 2) FERS Basic Benefit
Plan (a defined benefit annuity), and 3) the Thrift Savings Plan (TSP), a defined contribution
plan.
2. **The Civil Service Retirement System (CSRS) generally covers federal employees who
first entered service before:**
A) 1984
B) January 1, 1984
C) 1987
D) January 1, 1987
**ANSWER: B**
**EXPLANATION:** CSRS covers employees who entered federal service before January 1,
1984, and did not switch to FERS during open seasons.
,3. **A FERS employee becomes eligible for an immediate, unreduced retirement annuity at
age 62 with at least how many years of service?**
A) 5 years
B) 10 years
C) 20 years
D) 30 years
**ANSWER: A**
**EXPLANATION:** FERS offers an Immediate Retirement at Age 62 with 5+ years of
service. There is no reduction for age at 62.
4. **The FERS "Minimum Retirement Age" (MRA) is based on an employee's year of birth.
For someone born in 1970 or later, the MRA is:**
A) 55
B) 56
C) 57
D) 60
**ANSWER: C**
**EXPLANATION:** For individuals born in 1970 or later, the Minimum Retirement Age
(MRA) is 57. The MRA gradually increased from 55 to 57 for those born after 1947.
5. **Under FERS, an employee can retire at their MRA with 10+ years of service, but the
annuity is reduced by 5% per year for each year they are under age:**
A) 60
B) 62
C) 65
,D) 67
**ANSWER: A**
**EXPLANATION:** This is known as MRA+10 retirement. The annuity is permanently
reduced by 5% for each full year (5/12% per month) the retiree is under age 62 at
retirement.
6. **The FERS Special Retirement Supplement is designed to approximate the value of:**
A) The TSP account
B) The Social Security benefit earned during federal service until age 62
C) The CSRS annuity
D) Military retirement pay
**ANSWER: B**
**EXPLANATION:** The SRS is paid from retirement until age 62 (when Social Security
benefits become available) to FERS retirees who retire on an immediate annuity under age
62. It approximates the Social Security benefit attributable to their federal service.
7. **The FERS Basic Benefit annuity formula for a standard immediate retirement is:**
A) 1% x High-3 Average Salary x Years of Service
B) 1.1% x High-3 Average Salary x Years of Service (if age 62+ with 20+ years)
C) 1.5% x High-3 Average Salary x Years of Service
D) Both A and B are correct
**ANSWER: D**
**EXPLANATION:** The standard formula is 1% x High-3 x Years of Service. However, a 10%
bonus is given for retiring at age 62 or older with 20+ years of service, making the formula
1.1% x High-3 x Years of Service.
, 8. **An employee's "High-3" average salary is calculated based on the highest:**
A) Single year's salary
B) Three consecutive years of highest earnings
C) Three consecutive years of basic pay, which do not have to be the final three years
D) Final three years of service
**ANSWER: C**
**EXPLANATION:** The High-3 is the average of the highest three consecutive years of
basic pay (not including bonuses, overtime, etc.). These years can occur at any point in the
career, though they are often the final three.
9. **Under CSRS, the standard annuity formula for a general employee is:**
A) 1% x High-3 x First 5 years + 1.5% x High-3 x Next 5 years + 2% x High-3 x Service over 10
years
B) 1.1% x High-3 x All years of service
C) 1.5% x High-3 x First 20 years + 1.75% x High-3 x Years 21-30 + 2% x High-3 x Years over
30
D) 1.5% x High-3 x Years of service up to 10, 1.75% for years 11-20, and 2% for years over 20
**ANSWER: A**
**EXPLANATION:** The CSRS formula uses a tiered approach: 1.5% for the first 5 years,
1.75% for the second 5 years, and 2% for each year over 10. This is often simplified as 1.5%
x first 5, 1.75% x next 5, 2% x remainder, all multiplied by the High-3.
10. **The primary purpose of the Thrift Savings Plan (TSP) is to:**
A) Replace Social Security
B) Provide a defined benefit pension
