Military Service: Is It 'Creditable' Toward Civilian Retirement?

As a federal employee, you may be wondering if your active duty military service is “creditable” toward your civilian retirement.  The answer is generally YES, but you probably need to take some action and pay some money to insure full credit for that service.  It’s almost always money well spent, though, since the deposit amount is based on your low military pay, but the added benefit is based on your high-3 average salary.  That creates an excellent return on investment!

Whether your active duty military service is creditable for retirement purposes depends on the following factors:

  • whether your discharge was “honorable”;
  • when the military service was performed;
  • whether you are receiving military retired pay;
  • when your civilian retirement coverage (Federal Employees Retirement System (FERS) or Civil Service Retirement System (CSRS) began, and
  • whether you have paid a deposit to your retirement system for your military service.

For most current federal employees, active duty military service from which you have been honorably discharged is creditable for retirement purposes if you are not receiving retired military pay for that service — and if a deposit to the appropriate civilian retirement system has been completed.  The following information will help ensure that you receive the maximum credit for your military service.

Active Duty Before January 1, 1957

Active duty military service performed before January 1, 1957, is fully creditable toward retirement from FERS and CSRS, if no military retired pay is being received.  No special actions are required, and no deposit is necessary.

Active Duty On or After January 1, 1957 (“Post-56” Military Service)

With one exception, you must make a deposit to your FERS or CSRS account if you want “post-56” military service credited toward your civilian retirement.  This deposit is required even for active duty military service performed while on leave from a civilian federal position.  (See the next section: Military Reservists and National Guard Members Called to Active Duty)

Exception:  If you were in a CSRS- covered position on or before October 1, 1982, your “post-56” military service is fully creditable toward your CSRS retirement without making a deposit, but only to a point.  You will receive full credit for your military service without a deposit at least until age 62, if you retire before then.

However, at age 62 (or when you retire, if later), your situation will be reviewed:

  • If you are eligible for Social Security, but did not make a deposit for your military service, that military service credit will be removed from your annuity computation, causing a reduction in your annuity.  This reduction is permanent.
  • If you are not eligible for Social Security, your annuity will not be reduced (even if you later become eligible for Social Security).

Military Reservists and National Guard Members Called to Active Duty

Have you ever been placed in a non-pay status (Leave Without Pay; Absent-US, etc.) from your civilian federal job to perform active duty military service?  If so, you probably need to make a deposit to cover the time when you did not receive civilian pay, since these deposit requirements apply to that period of absence as well.  In most cases of this type, though, you’ll be able to pay the lesser of the deposit due under regular military deposit rules or the amount you would have paid into your civilian retirement plan.

Retired Military

Your military service is generally not creditable if you are receiving retirement pay for that service.  (Exception: Your military service may be creditable if your retired pay is based on a combat-incurred disability or on reserve service.)

You can, however, receive full credit for your military time if you:

  • make the necessary deposits for that service, then
  • waive your military retired pay at the time of your civilian retirement.

You need to carefully review what you must give up (your military retirement pay and possibly related benefits) and the added expense (cost of the military deposit) to find out if this is a good move for you financially.

Amount of Deposit

The amount of the deposit depends on your retirement system coverage:  3 percent of your military earnings if you are under FERS, and 7 percent of your military earnings is you are under CSRS.  (The rates are slightly higher for military service in 1999 & 2000, to match the slightly higher civilian contribution rates during those years.)

Interest is added annually to these deposits, beginning three years after your first retirement-covered appointment or your return to civilian duty.

Making a Deposit

For your military service to count toward your retirement, the entire deposit (including interest) must be paid in full before you retire.  The deposit may be paid in one lump sum, in biweekly payments by payroll deduction, or by any other method your payroll office may offer.

Contact your servicing personnel office of assistance with these deposits.  General information about service credit for military service is available in the Office of Personnel Management’s VetGuide.

© 2016 Ehren Clovis. All rights reserved. This article may not be reproduced without express written consent from Ehren Clovis.

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About the Author

Ehren Clovis retired from federal service after a career as a Benefits Specialist. She dealt with the employees of several different federal agencies, and acquired broad knowledge and experience with federal benefits, including the special retirement provisions for federal Law Enforcement Officers (LEOs). She now presents retirement and benefits training for federal employees through private companies. Ms. Clovis also counsels individual clients about federal retirement and benefits via phone and email.

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  1. dk7245 says:

    For those who served in the Reserve and Guard, when buying back your time, along with any AD time served, you can also count your AD two weeks camps and any ADT periods. Both of these are considered Active Duty and gave me an additional 545 days. Even though you don’t have a DD214, you can use your the Retirement Point form you receive annually. I retired from the Reserve System with 40 years; 8 AD and 32 Res and will retire from my Fed job in December this year. So glad I stayed in, my military retirement is about twice of what my FERS estimate is. So if any of you are still in the Reserve or Guard, take it from me, stay in and get your 20+.

  2. Dave says:

    I retired with a pension from the USPS with 17 years of service and I had bought back 13-1/2 years of active military time. I have six years of reserve time that I could not buy back. Can I retire from the reserves if I use the active duty time and buy back my time from the USPS?

    • Guest says:

      If you did NOT retire from the military based on active duty service AND you completed a deposit to FERS (I assume) for your active duty military service, then you can receive credit for your active duty military service in BOTH your FERS and Reserve retirements with no additional action on your part. E. Clovis

  3. krawlininmud says:

    I have been recently hired as a federal employee. Does my prior military service (ten years) medicaly retired count toward the rate at which I accrue sick and annual leave?

  4. Tony MisterMoe says:

    Very informative article. I am in the process of retiring with 21yrs of Active Fed Svc with the AGR program in the Natl Guard. I am also just beginning my new career as a new GS-5 with the VA. I have had a very difficult time researching my options especially when it comes to credit for military service for recruitment. Looking for any advice on how to get the biggest bang for my buck as a new federal employee with a lot of years of service under my belt. Any recommendations?

    • Guest says:

      Hi, Tony — I’m not familiar with the “AGR program in the Natl Guard,” especially when you preface that with “Active Fed Svc,” so I’m going to say this: If your retirement was not a retirement under military active duty provisions (which I’m guessing it was not), you would be welcome to make a deposit for any active duty military service you have so that it can be used to increase your civilian retirement benefit. (I’m assuming you meant “retirement,” not “recruitment” above.) As long as your retirement was under RESERVE provisions, not ACTIVE DUTY provisions, there should be no problem with receiving both the military and civilian retirement benefits for that service.

  5. Mailmandolin says:

    Just a quick question. I served 5 years in the military. I worked over 30 years at the USPS. Started in 1979. I am under CSRS. Is it worth my time to buy back my military time if I don’t plan to use Social Security?

    • Guest says:

      Whether you “plan to use Social Security” or not doesn’t matter for this topic. Whether you will be ELIGIBLE for Social Security at age 62 (or at retirement, if you retire later than age 62) is what matters. If you will be ELIGIBLE for Soc. Sec., then your CSRS benefit will include credit for your military service until age 62 only — unless you’ve made a deposit. If you make the deposit, you continue to get credit for the military service in your CSRS benefit even if you are also eligible for Soc. Sec. It’s usually a good idea to make the military service deposit if you’ll be eligible for Soc. Sec., but you need to look at the costs and benefits. You’ll owe a good bit of interest on that deposit now! Ehren

      • Mailmandolin says:

        I don’t have much in Soc. Sec. So if I retire before sixty two, I don’t need to buy back military time? Thanks

        • Guest says:

          If you will be ELIGIBLE for Soc Sec at age 62 or at retirement, whichever is later, then you might want to make the deposit in order to get the most annuity you can for the rest of your life. If you will NOT be eligible for Soc Sec at age 62 or at retirement, whichever is later, there’s no reason to make the deposit (there would be no benefit for you). If you need more info on this, perhaps you could contact me via email. Ehren

          • Mailmandolin says:

            Hi Ehren,
            Thanks for all the information. I am getting confused with all the different answers at work. (Cutbacks) So there isn’t anybody to talk to about this. My e-mail is Mailmandolin@gmail.com. I would like to hear more. You have been very helpful to me. Thanks,
            Randy

  6. Susan says:

    The federal buy back program just says military retirment, there is also a different military retirement. Reserve military retirement under the point system that you do not recieve until you are 60 years of age. I was informed that the federal retirement program has nothing to do with your retirement pay. It only effects your active duty retires. So it also says reserve time does not qualify for federal buy back program so a Military reserve retirement should not be effected. This difference is always left out of the federal program. Needs to be know to all.

    • Guest says:

      Yes, this is an important distinction — but there’s only so much that can be covered in one article! If your military retirement is based on Reserve service, you are welcome to make a deposit for the any ACTIVE DUTY you may have had. You could then receive BOTH the Reserve retirement and the civilian retirement (including credit for your active duty) in the future. Ehren

  7. Master says:

    I have ask this question several times to my local  HR representative.  I retired from the Army with over 23 years Fed Act Ser, in 1998.  I join the federal service in Sep 1998.  Currently FERS with 14 years.  I was retired recall into active service twice 2007 thru 2009 (24 months), and 2010 thru 2011 (18 months).  My question is, do I have to make a deposit to make this time count toward my civil service retirement?  Any Help?  Thanks.

    • Guest says:

      If you used any LWOP during your active duty recalls, YES, you would need to make a deposit for the service to be creditable toward your FERS retirement benefit. HOWEVER, if you’re going to receive a military retirement benefit for that time, you would have to waive it to get the FERS benefit.

  8. SticksInMyCraw says:

    Thanks for this article, Ehren.  You might also note in future articles that returned Peace Corps volunteers who are now in federal service also can get credit for their time spent working overseas.   Because I wasn’t paying into the federal pension fund when I served as a volunteer in the 1980’s, I had to make retroactive FERS deposits to get those 39 months of my life credited toward my federal service … however, because the compensation I received as a PCV was the whopping sum of approximately $250/month, those deposits ended up being pretty nominal.   (Finally, I got some payoff from living in voluntary poverty for three years!)

  9. VetChick says:

    Army and Air National Guard time is only creditable if it is “in accordance with 10 U.S.C.” with documentation for each period served (orders).   Per http://www.opm.gov/feddata/gpp… ch. 6, section 1-6.

  10. Bcsparks4 says:

    Kick myself now, did not do it, was a matter of principle, the government “changed horses in the middle of the stream”,at least I have my 40 quarters (32 of that military)

  11. Zippy says:

    I am a recent FERS retiree with 33 years service.  I did 8 years AF active duty, and 21 years Air Guard and Reserve.  The ANG time included a total of 4 years active duty (Title 10 time), since I was in a unit that pulled Air Defense alert, and you had to be on active duty to pull alert.  This was dribbled out in 30 day to 1 day “tours,” a very long list, and thank goodness I kept copies of my orders.  The whole buy-in process took over a year.  One lady in HR headquarters was an angel; others were less than helpful.  I ended up working for the Feds for 21 years, but retired with 33 years.  The money I paid for those 12 years was nothing compared to what I gained.  I urge you to start the process well before retirement, and expect some frustration.  By the way, I got retirement pay from AFRES while this was going on, since I was a retired Reservist over 60; the 2 are not incompatible, neither is Social Security.

  12. Mark318 says:

    Very good. It took me about a week to figure out about the post 56/pre 82 rule. It’s not easy to find. There was no Google back then.  

  13. Markspfeiffer says:

    As I planned for my retirement as a GS15 with 22 years of FERS covered service and 22 years of military service, for which I was receiving an annuity based on E9 pay, I assumed that making a deposit and waiving my military annuity just wouldn’t pencil out. Fortunately the agency benefits specialist assigned my case set me straight. Yes, it did require a substantial deposit ($24,000), but now, four years later, the net extra $5,000 a year has paid off most of the tab. Furthermore, considering what the market would have done to my $24Khome in the 2morning years following my Dec 2008 retirement, I figure I’m really ahead. Oh yes, I didn’t lose any of my military benefits in the process.

    • Carmen says:

      Hi Markspeffiffer,
      Just for clairification; you bought back 22 years of your active duty time and you’re still getting your active duty retirement annuity and benefits? Was any of that time Guard or Reserve? Thanks…

  14. Guest says:

    Works for me. I bought back 17 years 8 months and 2 days. It will increase my retirement by over 600 a month. Break even point is about 2 years. Always do the math before you decide though. I retired early during the drawn down in 95.

  15. GJC says:

    If you are a Service Academy graduate, since that time is not creditable towards military retirement it can be bought back and made creditable towards civilian retirement.  It is an exceptionally good deal.

  16. FAA says:

    Sure wish we could actually use that military time towards good time. What I mean is I had 9 years active duty and now just over 15 years with the D.O.T service and my career allows me to retire after 20 years age 50, or 25 years any age. If my military counted then I’d be able to go next year as I’d have 25 years total serve and I would be 47 years old. What’s the difference between military and D.O.T,……. I still worked for our Government ?

    • Guest says:

      The difference is that your coverage under the “special provisions” of the retirement system requires that those 20 or 25 years of service be in specific approved civilian positions (in your case, an ATC, I assume).  Military service could only be counted toward meeting that requirement if it was performed while on leave from one of those specific positions, and the deposit was completed.  On the other hand, you can still make the deposit and increase your annuity; it just won’t make you eligible to retire any sooner.

    • Jeromesimmons4golf says:

      You do not have the MRA and would recieve an early retirement penalty of 5% (FERS) 2%(CSRS) for every year you are short.

      • Guest says:

        I assumed his statement that “my career allows me to retire after 20 years age 50, or 25 years any age” meant that he was under the special retirement provisions for air traffic controllers (since his name is FAA).  If so, the criteria stated are the full, unreduced retirement criteria.

  17. Ltwaltwilson says:

    It is evn mmore complicated if your retired pay is covered by the VA in which case it is almost a cdertinty that paying the deposit is worth it as you do not have to waived VA covered pay.

  18. BR says:

    It was just another kick in the butt from the Reagan years for veterans, particularly us Vietnam types

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