Expert's View

Here we go again with an example of the kind of "I’ve been told" question on military deposits that I get on the average of once a week. "I’m a CSRS retiree who didn’t make a deposit to get credit for my active duty service in the military. I’ve been told that since I wasn’t eligible for a Social Security benefit when I retired at age 55, I won’t be hit by "Catch-62. That’s true isn’t it?" Maybe. As is the case with so many things in life, it all depends.

Let’s back up for a moment and see what he’s asking about. Employees who retired before October 1, 1982 didn’t have to make a deposit to the retirement fund to get credit for their active duty service. They automatically got credit for that time both in determining their Social Security benefit and their civilian annuity.

However, on or after that date, CSRS employees are faced with a decision: Should they make a deposit to get credit for their active duty service or not. If they didn’t make a deposit for that service, retired before age 62, and weren’t eligible for a Social Security benefit at age 62, it wouldn’t have any effect on their annuity. The same is true if they retired at or after reaching age 62 and weren’t eligible for a Social Security benefit on the day they retired.

However, if they were eligible for a Social Security benefit at either of those points in time, their years of active duty service would be subtracted and their annuities recomputed without them. For CSRS retirees, that’s no small reduction. It’s 2 percent for every year of active duty service (1/6 percent per month).

So, no matter what you’ve been told, Catch-62 is alive and well, and, if you are (or were) covered by CSRS, it could bite you. The good news is that OPM only checks with the Social Security Administration at two points in time: at age 62 if you’re retired, or when you retire if it’s at age 62 or later. If you didn’t (or won’t) get hit at either of those points in time, you’re home free.