OPM has issued new guidance regarding payments to capture military service time toward a civil service annuity, stressing that except in rare cases, the retiree must make that payment before retiring. This ends the prior practice of allowing the payments to be made during the period between separating and the point the annuity is finalized.

The new guidance says that retirement application forms for both FERS and CSRS have been updated, and that because they "clearly state the fact that deposits must be completed before separation, there will be no exception granted for employees who were already counseled but have not yet been separated. These employees must be informed of the correct procedures regarding the payment of military deposits."

"If, after separation, a retiree requests to make a Post-1956 Military Service Deposit, and, OPM determines that an agency error occurred, a letter will be sent to the agency. This letter will explain the administrative error in detail and advise the agency to compute and accept the Post-1956 Military Service Deposit," it adds.

Examples of administrative errors would include misinformation provided by the agency that the employee relied on to not make the deposit; errors or inconsistencies on the application form that the agency failed in its responsibility to catch; and failure on the part of the agency to ensure a deposit was made when an employee elected to make the deposit.

The change does not affect a policy allowing the payment to be made in the form of a reduced annuity in certain circumstances. Retiring employees also still have the option of not making a deposit and accepting the rules governing length of service and annuity computation, which differ according to the retirement system and when the service was performed.