If you served in the military after December 31, 1956, you can get retirement credit under both your civilian retirement system Social Security. However, there’s a catch. It’s called Catch-62 because for CSRS employees it usually comes when they reach age 62. For FERS employees, the catch comes much sooner. Let me explain.
If you are a FERS employee, you can only receive civil service credit for post-1956 military service if you deposit an amount equal to a percentage of the military basic pay you earned while on active duty. In general, that deposit is 3 percent, plus accumulated interest. You don’t have to pay it all at one time. Deposits can be as small $50.
If you are a CSRS employee, the deposit rules depend on when you were first hired. If you were hired after September 30, 1982, you’ll be treated in exactly the same way as a FERS employee. You’ll only get credit for your post-1956 military service if you make a deposit. However, you must make a larger deposit – usually 7 percent, plus accumulated interest.
(Note: Under both FERS and CSRS, you must complete a deposit before you retire if you want to get any credit for your military service. A former policy of allowing the deposits to be made up to the point OPM finishes processing your application—which can be many months later—no longer applies.)
On the other hand, if you were first employed under CSRS before October 1, 1982, it’s up to you to decide whether to make a deposit. Either way, you’ll still get credit for your military service in determining your length of service. However, if you don’t make the deposit, retire, and are eligible for Social Security at age 62 (or when you retire, if after age 62), those years of service will be dropped and your annuity reduced. So, if you expect to be eligible for a Social Security benefit, it may be worth making a deposit.
If you have a DD-214 or its equivalent, attach it to a copy of form RI 20-97, Estimated Earnings During Military Service. You can get a copy from your personnel office or download one at www.opm.gov, click on Forms. Mail the package to your branch of service. (The addresses are on the back of the form.) Your service center will verify your earnings.
If you don’t have a DD-214, you’ll have to fill out a Standard Form-180, Request Pertaining to Military Records (also available at www.opm.gov) and send it to your branch of service. (Once again, the addresses are on the back.) Your records center will send you a new DD-214 or its equivalent. Attach that to a completed RI 20-97 and mail it to your branch of service to get an earnings estimate.
Next week I’ll wrap things up by telling you how to decide if you should make a deposit.
