Retirement & Financial Planning Report

If you are retired from active duty and are receiving military retired pay, you can continue to receive that pay and you can also receive a civilian annuity based solely on your civilian service. On the other hand, with one exception, if you want to get credit for those active duty years in determining your eligibility to retire from your civilian job and in your civilian annuity calculation, you’ll have to make a deposit to the civilian retirement fund for that period of time and waive your military retired pay. Here’s the exception: You won’t have to waive your military retired pay if you are receiving it because of a service-connected disability either incurred in combat with an enemy of the United States or caused by an instrumentality of war and incurred in the line of duty during a period of war. However, you would still have to make a deposit for that time.

On the other hand, if you have retired (or will be retiring) from a reserve component of the armed forces, you’ll be able to receive both that military retired pay and your civilian annuity, with no reduction in either. However, if you want to get credit for any periods of active duty service in determining your eligibility to retire from your civilian job and in your civilian annuity calculation, in most cases you’ll have to make a deposit for that time. The rules vary depending on which retirement system you are in.

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If you are covered by FERS, you will get credit for your active duty service only if you make a deposit. If you are covered by CSRS, what you have to do depends on when you were first employed by the federal government.

If you were employed before October 1, 1982, you have a choice. You can make a deposit or decide not to do so. In either case you’ll get credit for that time in determining your eligibility to retire and in your annuity computation. However, if you don’t make a deposit, are retired, and are eligible for a Social Security benefit at age 62, those years of active duty service will be eliminated and your annuity recomputed downward. The same is true if you retire after reaching age 62 and are eligible for a Social Security benefit at that time.

If you were first employed on or after October 1, 1982, you’ll be treated the same as any FERS employee. You won’t get any credit for that time unless you make a deposit.

Note: If you are a FERS employee with a CSRS component, any active duty military service performed before you transferred to FERS will be governed by CSRS rules.

If you are thinking about making a deposit, you’ll need to find out how much you owe. To do that, fill out Form RI 20-97, Estimated Earnings During Military Service, and mail it to the finance center for your branch of service along with a copy of your DD-214, Report of Transfer and Discharge (or its equivalent). When the response comes back, attach a copy of your DD-214 and a completed Application to Make Deposit or Redeposit (Standard Form 2803 (CSRS) or 3108 (FERS)), and take it to your local payroll office. They will figure out how much you owe and tell you how to go about making the deposit, if you decide to do that. The RI and Standard From are available online. Go to www.opm.gov/forms.