Yes, friends, you can get credit for your military service. And, when you do, it will increase the amount of your civilian retirement annuity. However, it can only be credited if it was active service terminated under honorable conditions and was performed before you retire from your civilian job.
However – yes, there’s always a “however” if you work for the government – there are two hurdles to clear. The first applies to all employees who served in the military after December 31, 1956. If you are a FERS employee with post-1956 military service, the only way you can get credit for that time will be to make a deposit to the Civil Service Retirement and Disability Fund.
CSRS employees with post-1956 military service fall into two categories: those who were first hired after October 1, 1982 and those hired before that date. If you were hired after October 1, 1982 you will be treated the same as FERS employees. In other words, you’ll have to make a deposit for that time
On the other hand, if you were hired before October 1, 1982, you have two choices. You can either make a deposit for any post-1956 military service or decide not to make it. If you don’t make the deposit, retire and become eligible for Social Security at age 62, those years of non-deposit service will be subtracted and your CSRS annuity will be reduced. The good news is that OPM only checks once – at age 62 or when you retire, if that’s after age 62.
Now, here’s the second hurdle. It applies only to those of you who are receiving military retired pay. You can’t continue to receive that retired pay and get credit for that service unless you were awarded it 1) for a service-connected disability incurred in combat with an enemy of the United States or caused by an instrumentality of war and incurred in combat in the line of duty during a period of war, or 2) under the provisions of Chapter 67, Title 10, U.S. Code (which relates to retirement from a reserve component of the Armed Forces).
If you are barred from getting credit for military service because of your retired pay, you can either make a deposit for that time (and waive your retired pay) before you retire or you can keep it and have your annuity computed solely on your civilian service.