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Little Known CSRS Government Employee Benefit

Table of Contents


The Civil Service Retirement System (CSRS) Voluntary Contributions Program (VCP) is a little-known but powerful retirement planning tool for federal government employees. This program allows CSRS participants to supplement their retirement savings in two key ways:

How the VCP Works

The VCP enrollment process is straightforward. You’ll need to complete required forms to set up an account. Contributions can be made through payroll deduction, bank transfers, or rollovers from other accounts. There are no fees for managing a VCP account.

Boost Your Pension

The VCP was originally created to let CSRS employees contribute more in order to increase their pension payments in retirement. Here’s how it works:

You can contribute up to 10% of your total career base salary under CSRS
For example, if you earned $1.4 million over 20 years, you could contribute up to $140,000
VCP contributions are made after-tax, so your payments won’t be taxed in retirement
You can make lump sum or periodic contributions while still employed or separated but not yet retired
Setting aside extra funds through the VCP is a smart way to lock in higher guaranteed income during your retirement years.

Tax Benefits

VCP funds grow tax-deferred before transferring to a Roth IRA. Withdrawals from the Roth IRA face no taxes or penalties, under current laws. Consult a tax advisor about your specific situation.

Fund a Backdoor Roth IRA

Here’s the exciting part – VCP funds can also be used to max out contributions to a Roth IRA, free of income limits.

Normally you can’t contribute to a Roth IRA above certain income limits
But there are no income limits on transfers from the VCP to a Roth IRA
Roth IRA growth and withdrawals in retirement are 100% tax-free
This “backdoor” strategy lets higher earners realize the full benefits of Roth IRAs. It’s an obscure but powerful retirement planning move.

Withdrawal Rules

You can take VCP withdrawals as a lump sum or periodic payments. Required minimum distributions start at separation from service or age 59.5, whichever is later.

Investment Options

The VCP offers a range of investment funds to fit different risk tolerances. Work with a financial advisor to develop an appropriate asset allocation aligned with your timeline.

In summary, the VCP gives CSRS government employees two great options to boost retirement savings. Connect with a financial advisor soon to discuss how you can utilize this powerful yet little-known program.

IMPORTANT NOTE: This blog is for informational purposes only and comments will not be posted on this site.  If you would like to contact the author, please email us at


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