One of the questions that some federal employees face when they start thinking about retirement is this: Should I make a deposit for my years of post-1956 military service. Well, it all depends.

CSRS

If you were first employed under CSRS before October 1, 1982, you have a choice. You can make a deposit or not make a deposit. Either way you will receive credit for your military time both for entitlement purposes and in the computation of your annuity. However, if you don’t make a deposit, retire, and become eligible for a Social Security benefit at age 62, those years of service will be eliminated and your annuity will be recomputed downward. The same is true if you retire after age 62 and are eligible for a Social Security benefit on the date you retire. If you are sure that you won’t be eligible for a Social Security benefit at either of those checkpoints, you can forget about making a deposit.

If you were first hired under CSRS after September 30, 1982, you’ll get credit for your post-1956 only if you make a deposit for that time.

The amount of the deposit is 7 percent of your basic pay for periods of active duty service prior to January 1, 1999 and after December 31, 2000, 7.25 percent for service in 1999 and 7.40 in 2000, plus any interest due.

FERS

The rules for those covered by FERS are the same as those for CSRS employees hired after September 30, 1982. The only way you can receive credit for your post-1956 military service is to make a deposit. However, the amount of the deposit is less than that for CSRS employees. It’s 3 percent of your basic pay for periods of active duty service prior to January 1, 1999 and after December 31, 2000, 3.25 percent for service in 1999 and 3.40 in 2000, plus any interest due.

FERS with a CSRS Component

If you transferred to FERS and will have a CSRS component in your annuity, the rules on making a deposit will be the same as those for CSRS employees unless the military service was performed after transferring to FERS.

Making a Deposit

To find out how much you owe, ask you personnel office for a copy of RI-20-97, Estimated Earnings During Military Service. Fill out the form and send it to your military finance center with a copy of your DD Form 214, Report of Transfer or Discharge. When you get your estimated earnings statement, take it to your personnel office and ask them to determine the amount of deposit needed, including interest. All deposits for post-1956 military service must be made to you agency, and they must be completed before you retire. Payments need not be in a lump sum but may be paid over time. Your payroll office can help you to set up a payment schedule.