OPM is granting a temporary waiver, through June 30, of interest it ordinarily would charge to certain retirees who paid incorrect amounts to capture service credit in their retirement payments.
OPM since 2008 had been working to correct an error it found in its retirement processing involving required payments to capture service credit. Common situations that require such payments include military service for which the individual seeks federal retirement credit, “non-deduction service” federal employment for which no retirement deductions were withheld (a practice that has been virtually eliminated since the 1980s) and payments to recapture service, involving situations in which an individual took a refund of retirement contributions at a break in service, then returned to the government and needs to make a repayment to have the earlier service count in the annuity calculation.
In each of those cases, interest is charged to the individual. OPM discovered, however, that it had made errors causing some to be overcharged and some to be undercharged. Those in the latter group are being sent notices of their obligation, which ranges from about $100 to more than $1,000 in some cases. Normally, if the payment was underpaid interest would accrue on the pertinent amount but OPM created the grace period due to the length of time it took to diagnose and correct the problem.
Those who were overcharged will receive a refund. About 8,500 persons are affected in all.