40+ Years of Service: What Happens to Those Extra Retirement Contributions?

When I retire how will I receive the retirement monies that were taken out after working for over 40 years?

Q: I’m a CSRS employee with a total of 48.4 years within Civil Service. As I understand the 40.11 ruling; after you reach over 40.11 I’ll receive 80% of my High-Three years.

The question comes into play on the retirement contributions, I’m still paying retirement contributions. When I retire how will I receive the retirement monies that were taken out after working over 40.11 years? Will someone contact me or will they send me a check or some other method?

A: Congratulations on your long federal career!

As you note, deductions for CSRS retirement are being taken out of your salary even though you have completed 41 years and 11 months of service. Once you passed 41 years and 11 months of service, your CSRS pension was “frozen” at 80% of your high-three. (NOTE: any unused sick leave you have accrued can add to your length of service for pension computation purposes, resulting in a pension that is actually higher than 80% of your high-three).

These excess contributions of yours earn interest at the rate of 3% per annum. At the time of your retirement, the excess contributions are first used to pay any civilian deposits or re-deposits that may be outstanding (most CSRS retirees will have no such deposits or re-deposits). When OPM adjudicates your retirement claim, you will be given a choice of receiving a refund of any excess contributions, or of purchasing an additional annuity under the CSRS Voluntary Contributions Program.

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Agencies can request to have John Grobe, or another of Federal Career Experts' qualified instructors, deliver a retirement or transition seminar to their employees. FCE instructors are not financial advisers and will not sell or recommend financial products to class participants. Agency Benefits Officers can contact John Grobe at johnfgrobe@comcast.net to discuss schedules and costs.

About the Author

John Grobe is President of Federal Career Experts, a firm that provides pre-retirement training and seminars to a wide variety of federal agencies. FCE’s instructors are all retired federal retirement specialists who educate class participants on the ins and outs of federal retirement and benefits; there is never an attempt to influence participants to invest a certain way, or to purchase any financial products. John and FCE specialize in retirement for special category employees, such as law enforcement officers.