If you are a current federal employee and have military service, you may be able to receive retirement eligibility and annuity computation for your years of military service.
While some military service receives retirement credit, this is not guaranteed for all service. The rules are different for CSRS and FERS employees and will be unpacked below.
Federal employees first hired before October 1, 1982 under the Civil Service Retirement System (CSRS) with post-56 military service and who haven’t made a deposit will receive retirement eligibility; their annuity may be subject to Catch 62.
Catch-62 applies to employees who have military service that they have not made a deposit for and who will have the required 40 credits to be eligible for Social Security at age 62.
Their CSRS annuity will be computed two different times. The first time will be at their initial retirement and includes military service time. The second computation will be at age 62 and does not calculate military service time.
If you were first hired under CSRS before October 1, 1982 and a deposit has not been made, you will receive retirement eligibility. However, your annuity may be subject to Catch-62.
“Catch‐62” does not apply to employees who will not have the required SS credits to be eligible for Social Security at age 62. If you were first hired under CSRS after October 1, 1982, and a deposit has not been made, you will only receive retirement eligibility.
Thankfully, the rules for federal employees under the Federal Employees Retirement System (FERS) are much simpler than those for CSRS. Employees under the FERS retirement system with post-56 military service who have not made a deposit will not receive retirement eligibility or annuity computation. Both CSRS and FERS employees will receive retirement eligibility and annuity computation if a deposit has been made.
Making a Military Deposit
To make a deposit for military time means to pay for a period of employment when retirement deductions for FERS or CSRS were not being withheld from your salary. It is important to know that you are by no means required to make a deposit of any kind.
If you decide that you would like to make a deposit for your active duty military service, you must do so prior to retirement. The Office of Personnel Management (OPM) will not adjudicate your annuity if you delay making a military deposit until separation for retirement. However, if you do not make a deposit, this may eliminate the service from being used for retirement eligibility or annuity computation purposes.
While employed, you may make a deposit for your military service to receive credit in the computation of your annuity; however, generally you must waive your military retired pay. Note that separated employees may not make a military deposit.
You may contact the OPM to waive your military retired pay and receive credit for your military service in the computation of your FERS or CSRS benefit. OPM recommends that you write the Retired Pay Operations Center at least 60 days prior to your planned federal retirement and submit your waiver to:
Defense Finance and Accounting Service
U.S. Military Retirement Pay
P.O. Box 7130
London, KY 40742-7130
You may also “fax” your request to (800) 469-6559.
To pay a deposit for your military service, you must complete Standard Form 3108, “Application to Make Service Credit Payment (FERS)” or Standard Form 2803, “Application to Make Deposit or Redeposit (CSRS).”