FEDweek

Should You Make a Redeposit?

Did you ever leave a job where you were covered under the Civil Service Retirement System (CSRS), take a refund of your retirement contributions, and then return to work for the government? If so, you need to decide whether to redeposit that money in order to increase the dollar value of your retirement annuity.

If you don’t make the redeposit, you can still get credit for the time in determining your length of service for retirement eligibility purposes. However, if that period of refunded service ended after September 30, 1990, you won’t get any credit in you 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 October 1, 1990, you won’t have to pay the redeposit if you don’t want to. You’ll receive full credit for that service in your annuity computation. However, 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, plus interest, when you retire.

Obviously, the question of whether to make a redeposit depends on the financial impact. In order to make that assessment, you’ll need to go to your personnel office and have one of the benefits specialists run the numbers for you. They’ll base those calculations on your expected age at retirement and an estimate of how big a deposit you owe.

To find out the exact amount you owe, you need to get an Application to Make Deposit or Redeposit from your personnel office. For CSRS employees, the form number is SF 2803; for FERS employees, it’s SF 3108. Fill it out and send it to the Office of Personnel Management. The address is on the form. Do it now. This is a case where time is money. Your money. Each year that you delay, the cost of that redeposit goes up.