Dates Matter – Deposits to Capture Service

Last week I wrote about the dates that control the creditability of military service in determining your eligibility to retire and whether you’ll need to make a deposit to have it used in the computation of your annuity. This time I want to explain what happens if you left government, got a refund of your retirement contributions, and then returned to work for the government.

If you are one of those, you have a decision to make. Not surprisingly, the rules are different for CSRS and FERS employees. If you are a CSRS employee who took a refund after February 28, 1991, and redeposit that money, plus accrued interest, it will be used in the computation of your annuity. If you don’t, you’ll still get credit for the time in determining your years of service; however, it won’t be used in the computation of your annuity.

On the other hand, if you got a refund before or on that date, you have a choice. You can either make the redeposit or you can have your annuity reduced actuarially based on how much you owe, including accrued interest, and your age when you retire.

If you are a FERS employee who left government, got a refund of your retirement contributions, and returned to government service on or after October 28, 2009, you can redeposit the money, plus interest, and get retirement credit for that service. If you don’t redeposit that money, you won’t get any credit for that time in determining your length of service nor will you have it used in your annuity computation.

While the rules governing redeposit are simple, whether it’s worth the expense is something you’ll have to decide. To find out  how much you’d owe, go to www.opm.gov/forms and download a copy of OPM’s Application to Make Deposit or Redeposit: SF 2803 (CSRS) or Application to Make Service Credit Payment: SF 3108 (FERS). Fill it out and send it to the address 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.