Ask The Experts: Retirement

By Reg Jones

‘High-3″ and service buyback

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Q: I can retire in February with 31 years of service under the Civil Service Retirement System as a part-time/flex employee in the U.S. Postal Service. My “high-3″ years were from 2006-2009. Will they use these years to calculate my annuity? Is it always the last years? Is it always three consecutive years, or is it the highest consecutive three years? As a PTF, my hours changed yearly as to how many offices I worked in. Also, when I was hired in 1979, I never heard of “buying back” or anything related. Since I made no deposits, or didn’t know anything about any deposits, from what I have read, my time from 1979 to 1986 will not count toward my annuity unless I “buy back” these years.

Did the Postal Service not take anything out of my pay for those years? would a buyback be worth it, and how would it affect my retirement computation?

A: Your high-3 is always your highest three consecutive years of average salary. Under CSRS, all periods of nondeduction service are always creditable for determining your eligibility to retire. Getting credit for that time in your annuity computation depends on when the service was performed. It if was before Oct. 1, 1982, you have a choice: You can either make a deposit of the amount that would have been deducted from your salary plus accrued interest, or have your annuity reduced by 10 percent of what you owe. If it was on or after Oct. 1, 1982, you will have to make a deposit for that time to get credit for it in your annuity computation.
 
To find out how much you would have to deposit, go to the Office of Personnel Management’s website and download a copy of Standard Form 2803, Application to Make Deposit or Redeposit. Complete the form and send it to OPM. Once they’ve gotten back to you, you’ll have a better idea about whether it makes good financial sense to make the deposit. If it does, you agency payroll office can work out a payment schedule.

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