Did you ever work for the federal government, leave, get a refund of your retirement contributions, and then return to work for the government? If you did, you’ll have to decide whether to redeposit that money. If you don’t, you may not get credit for that time. If you do, you will.

If the government were a simpler place, there wouldn’t be any distinction between CSRS and FERS employees when it comes to redeposits. However, there are distinctions, and I want to spell them out for you.

CSRS

If you don’t make the redeposit, you’ll still get credit for that time in determining your length of service for retirement eligibility purposes. However, if that period of refunded service ended on or after March 1, 1991, you won’t get credit for it in your annuity computation unless you pay the total amount you owe by the time you retire. On the other hand, if that refunded service ended before March 1, 1991, you have a choice. If you make the redeposit, you’ll receive full credit for that service in your annuity computation. If you don’t make the redeposit, your annuity will be actuarially reduced based on your age and the amount of the redeposit you owe, interest included, when you retire.

FERS

For the first 20 years of the FERS system, any FERS employee who left government, got a refund of retirement contributions, and then returned to work for the government was barred by law from redepositing that money. As a result, that time was lost for retirement purposes. That changed when Public Law 111-84 went into effect. However, it wasn’t retroactive. It applies only to FERS employees retiring on or after October 28, 2009. Further, unlike CSRS employees, who can get credit for the time in determining their length of service even if they don’t make a redeposit, FERS employees won’t get any credit unless they redeposit that money, plus accrued interest.

Whether you should make a redeposit depends on the financial impact. To find out how much you owe, you need to go to www.opm.gov/forms and download a copy of OPM’s Application to Make Deposit or Redeposit: SF 2803 (CSRS) or SF 3108 (FERS). Fill it out and send it to OPM. The address is on the form. They’ll let you know how much it will cost you. If you decide to redeposit the money, you can do that in installments. However, the redeposit needs to be completed before you retire.

If you decide to make a redeposit, the sooner you do it, the better. Each year you delay making the redeposit, the more it will cost you in interest.