Last time I wrote about birth dates and service computation dates. This time I want to point out the dates that control the creditability of military service in determining your eligibility to retire and whether you’ll need to make a deposit to have it used in the computation of your annuity.
If you are a CSRS employee who served in the military before December 31, 1956, you won’t have to make a deposit to the civil service retirement system to receive credit for that time in determining your eligibility to retire or your annuity computation. Since this involves military service that happened more than 60 years ago, it probably applies to only a handful of current federal employees.
If you served in the military in 1957 or later, what happens to that time depends on when you were first employed by the federal government. If it was on or after October 1, 1982, you’ll only receive credit for that time if you make a deposit before you retire. If you were first employed before that date, you have two choices. You can either make a deposit for that time or you can take your chances. If you retire and won’t be eligible for a Social Security benefit at age 62 (or at retirement if you retire after age 62), nothing will happen. On the other hand, if you will be eligible for a Social Security benefit, those years of military service will be eliminated and your annuity recomputed downward.
That date also affects the creditability of any deposit you may owe to the retirement fund. If you worked for the federal government on or after October 1, 1982, in a position from which retirement deductions weren’t taken, you’ll receive credit for the time in determining your eligibility to retire but the time won’t be used in the computation of your annuity unless you make a deposit to the retirement fund before you retire.
If you decide to make a deposit, in general you’ll pay 7 percent of your basic pay while on active duty (not including allowances and differentials), plus accrued interest 7.5 percent if you’re a special category employee.). Deposits can be as small $50. However, you must complete the deposit before you retire if you want to get any credit for your military service.
If you are a FERS employee, you can only receive credit for post-1956 military service if you deposit an amount equal to a percentage of the military basic pay you earned while on active duty. In general that deposit is 3 percent, plus accrued interest. Just as is true for CSRS employees, deposits can be as small $50, and you must complete the deposit before you retire if you want to get any credit for your military service.