In a recent column I talked about two kinds of dates that are important to you as a federal employee: the ones that determine when you will be eligible to retire and those relating to the crediting of military service for retirement purposes. This time I want to talk specifically about the dates relating to deposits and redeposits.
October 1, 1982, loomed large in my discussion of whether a deposit would be required for you to get credit for your active duty military service. As I pointed out, anyone first hired on or after that date has to make a deposit to get credit for that time, while those hired before that have a choice. Of further concern to you, that date also affects the creditability of any deposit you may owe to the retirement fund for a period of civilian service that is creditable but where retirement deductions weren’t taken out of your pay. However, the rules here are different than those governing military service.
If you worked in such a position before October 1, 1982 and no CSRS retirement deductions were taken out of you pay, you’ll receive credit for the time in determining your eligibility to retire; however, if you don’t make a deposit for that period of service, your annuity will be reduced by 10 percent of the unpaid amount plus accrued interest.
Now, if that non-deduction service was performed on or after October 1, 1982, you’ll still get credit for that time in determining your eligibility to retire; however, it won’t be included in your annuity computation unless you make a deposit plus interest.
Note: Under FERS any non-deduction service performed before January 1, 1989, won’t count for either eligibility or computation purposes unless you make the required deposit, including accrued interest. And any such service performed after December 31, 1988, won’t be credited for any purpose.
Yet another date to consider is March 1, 1991. If you are a CSRS employee who left the government and took a refund of your retirement contributions for a period of service that ended before that date, you won’t have to redeposit the money to receive credit for that period of service in determining your eligibility to retire. However, your annuity will be reduced actuarially based on your age and the amount of redeposit you owe, plus interest.
On the other hand, if you took that refund of your contributions on or after March 1, 1991, you’ll receive credit for the time in determining your eligibility to retire but it won’t be included in your annuity computation at all unless you make a deposit for the full amount, plus interest, before you retire.
The 2010 DoD authorization law changed the pertinent date from October 1, 1990.
Note: Although FERS employees who take a refund of their FERS contributions traditionally have been prohibited by law from making a redeposit to get credit for that time, a provision in the 2010 DoD authorization law allows FERS employees who took a refund to be treated the same as their CSRS counterparts. If you are a FERS employee with CSRS service time, you may elect an actuarial reduction in the circumstances described above.