Don’t Get Caught

Catch-62. Does that ring a bell? Well it should for some of you. Federal employees who also served in the military after December 31, 1955 can get retirement credit under both their civilian retirement system and Social Security. However, there’s a catch. It’s called Catch-62, because for CSRS employees the “catch” usually comes when they reach age 62. For FERS employees, the catch comes well before then.

If you are a FERS employee, the catch is that you can only receive civil service 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 interest. You don’t have to pay it all at one time. 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 CSRS employee, the deposit rules depend on when you were hired. If you were hired after September 30, 1982, you’ll be treated in exactly the same way as a FERS employee. You will only get credit for your post-1956 military service if you make a deposit. However, CSRS employees must make a larger deposit – 7 percent, plus interest.

On the other hand, if you were first employed under CSRS before October 1, 1982, it’s up to you whether to make a deposit. Either way, you’ll still get credit for your military service time. However, if you don’t make a deposit and are eligible for Social Security at age 62 (or later if you retire after age 62), those years of service will be eliminated and your annuity recomputed downward. If you don’t expect to become eligible for Social Security benefits either at age 62 or at retirement, you can stop reading this item now.

If you do expect to become eligible for Social Security benefits either at age 62 or at retirement, it may be worth making a deposit. To find out what you owe, go to your personnel office. If you have a DD-214 or its equivalent, attach it to a copy of form RI 20-97, Estimated Earnings During Military Service and mail it to your branch of service. (The addresses are on the back of the form.) The service center will verify your earnings. Or, if you have complete pay records, your personnel office can use those to calculate your military deposit.

If you don’t have either, you’ll have to fill out an SF-180, Request Pertaining to Military Records (available from your personnel office) and send it to the branch of service with which you served. (The addresses are on the back of the form.) The records center will send you a new DD-214 or its equivalent. Attach that to a completed RI 20-97 and mail it to your branch of service to get an earnings estimate. If you decide to make a deposit to cover your military service, you can take that paperwork to your personnel office and fill out a SF-2803, Application to Make Deposit or Redeposit. You’ll make your deposits to your agency, not OPM.