It’s a sad fact of life but there are all-to-many CSRS employees who aren’t aware that their annuities might be reduced if they don’t make a deposit to get credit for any periods of active duty service in the armed forces. If you don’t want to be one of them, read on.

If you were first employed before October 1, 1982, you have a choice. You can either make a deposit to the retirement system to get credit for your post-1956 active duty service or not make it. If you don’t make the deposit, retire before age 62, and are eligible for a Social Security benefit at age 62, those years of service will be eliminated and your annuity recomputed without them. If you retire after age 62, the reduction will take place on the day you retire.

The rule is different if you were first hired under CSRS after September 30, 1982. You’ll only receive credit for any post-1956 military service if you make a deposit to the retirement system.

That deposit would be based on the basic pay you received for your active-duty service, not including differentials and allowances, plus accrued interest. For most CSRS employees the amount is 7 percent for service prior to January 1, 1999 and after January 1, 2001. For periods of service performed during 1999, it’s 7.25 percent, and during 2000, 7.40 percent. The percentages are a one half-point higher for special category employees, such as law enforcement officers and firefighters.

Interest is added to the deposit unless it is made within two years of the date on which you were first employed by the federal government. Prior to Jan. 1, 1984, the interest rate was 3 percent; thereafter, a variable interest rate has been charged.

1985 – 13% 1999 – 5.75%

1986 – 11.125% 2000 – 5.875%

1987 – 9% 2001 – 6.375%

1988 – 8.375% 2002 – 5.5%

1989 – 9.125% 2003 – 5%

1990 – 8.75% 2004 – 3.875%

1991 – 8.625% 2005 – 4.375%

1992 – 8.125% 2006 – 4.125%

1993 – 7.125% 2007 – 4.875%

1994 – 7% 2008 – 4.75%

1996 – 6.875% 2009 – 3.875%

1997 – 6.875% 2010 – 3.125%,

1998 – 6.75% 2011 – 2.75%

2012 – 2.25%

When you look at those interest rates, you’ll see how even a small owed deposit can mushroom into a large one

Fortunately, the deposit doesn’t have to be made in a lump sum. You can make it in increments as small $50. However, the full amount must be deposited before retirement in order for you to get any credit for your active duty service.

Keep in mind that the longer you take deciding whether to make a deposit, the more it could cost you. So, don’t delay. Visit your agency personnel office now. The benefits specialists there can help you to sort out the options and expedite the paperwork if you decide to make a deposit.