Legislation has been reintroduced to expand retirement options for some federal employees.
For the third time in the past three years, The Federal Retirement Fairness Act (H.R. 4268) is being introduced by Congressman Derek Kilmer (D-WA). It would ensure that federal employees who began their careers as temporary workers are granted the opportunity to make catch-up retirement contributions so that they can retire on time, otherwise they would have to work longer to obtain full retirement benefits.
“Many federal employees begin their careers in temporary positions before transitioning to permanent status – so we need to have their backs,” said Kilmer. “This bill will ensure that all federal workers, from the Puget Sound Naval Shipyard and beyond, have the opportunity to retire on time, regardless of how they started their careers.”
Purpose of the Legislation
Usually, in order to obtain credit toward a future retirement pension, a federal employee must be employed in a job in which there is a Federal Employees Retirement System (FERS) retirement deduction. Federal jobs requiring these deductions from an employee’s pay are usually working in a job as a career or career-conditional appointment with the federal government.
With a few exceptions, a FERS employee cannot make a deposit for “non-contributory service” performed after January 1, 1989. Creditable service under FERS can include working as a federal employee before 1989—even when an employee’s pay was not subject to retirement deductions—if a deposit has been made. This includes service under a temporary appointment.
Only Counting Time Prior to 1989
Under FERS, in order to count federal employment prior to 1989 toward a retirement payment where a retirement deduction was not taken from an employee’s salary, a deposit must be paid to count toward your retirement computation.
A deposit is a payment for a period of employment when retirement deductions were not withheld. The deposit amount is generally 1.3% of salary plus interest.
You are not required to make this type of payment. However, not making the payment means that this time does not count toward federal retirement.
This bill would eliminate the requirement that creditable service would have to have been performed before January 1, 1989.