Ravenman’s excellent posts notwithstanding, I have one correction.
There are three retirement systems in place for the majority of federal civilian employees.
[ol]
[li]As previously stated, federal employee hired before 01 January 1984 come under the older, and more lucrative CSRS retirement system.[/li][li]Those hired 01 January 1984 and later come under the FERS retirement system.[/li][li]However, those hired under the CSRS system, leave the government and then return, are offered a choice to move to the FERS system, or become part of a third retirement system known as CSRS-Offset. Offset employees have a CSRS component and a social security component. They pay into both systems.[/li][/ol]
CSRS and CSRS-Offset employees may choose to participate in TSP, but they receive no matching funds from the government. Only FERS employees receiving matching funds if they participate.
A CSRS-Offset employee has retirement benefits similar, if not identical to CSRS employees. The basic difference is their retirement plan pays into two different systems and the benefits received come out of the two different systems. However, If a CSRS-Offset employee also has additional social security earning during the period when they were not working for the federal government, those earning will count towards a higher overall benefit. If a CSRS-Offset has additional 401K-type retirement and/or IRAs from other non-government employment, that, too, may increase their ultimate retirement benefit (from non-government investment).