Q: I recently received a “Certified Summary of Federal Service” and noticed that there were several entries annotated with “FICA Only — Deposit Not Paid” and my SCD is a later date than I have had for the last 25 years or so. A couple of questions — Did those unpaid entries change my SCD for retirement? If yes, am I able to pay back the deficient?
A: Yes, it appears that the identification of this service did indeed cause your SCD-Ret to be changed. Whether you can “pay back the deficient” is harder to answer without more information.
“FICA Only” means that you paid into Social Security during that service, and only Social Security — not into a federal retirement system such as FERS or CSRS. That is, the type of appointment you had was excluded from retirement coverage. The most common type of excluded appointment is a “temporary appointment” (one that is not expected to exceed a year), but other types of appointments can also be excluded from retirement system coverage.
You didn’t volunteer what your current retirement coverage is, so I’m going to assume the most likely coverage: FERS. Under FERS rules, service that was not covered by FERS deductions while being worked is generally not creditable for retirement purposes. There are some exceptions, though, that allow the employee to make a “deposit” to FERS, making the “FICA Only” service creditable for retirement purposes. The deposit amount is usually 1.3% of your salary during the service, plus interest.
The general exceptions that allow a “deposit” to be made to FERS include:
- If the service was before 1989
- If the service was after 1988 and was with Peace Corps or VISTA
Bottom line: If any of your “FICA Only” service was before 1989, you should be able to make a deposit to FERS to make that service fully creditable under FERS rules. However, if your “FICA Only” service was after 1988, it generally cannot be credited for FERS retirement purposes unless the service was with Peace Corps or VISTA and you make a deposit to FERS to cover the service. (See http://www.opm.gov/retirement-services/fers-information/creditable-service/ for complete information)
Your SCD-Ret was adjusted to delete your “FICA Only” service because it is not currently creditable for retirement under FERS, and may never be creditable. While this may not be good news in general, it is very good that you were given this news before the moment you were retiring!