Ask The Experts: Retirement

By Reg Jones

Buying back multiple active-duty periods

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Q: I have three periods of military service for which I am required to pay a deposit under “Catch 62.” The first period, 1969 to 1972, I paid for when it came due in 1986. This bought me a period of about 2.6 years. I was mobilized for Operation Desert Shield/Desert Storm in 1990 to 1991, and for duty in Bosnia in 1997, for eight and seven months, respectively.

I plan to work off the additional time by delaying my retirement for 15 months or more. When I discussed this plan with our human resources office, I was told that I may not be able to keep the original 2.6 years I’ve already redeemed if I do not completely pay off all three periods of active duty. Is this true?

A: No, it isn’t true. When you have more that one period of active-duty service, you can select which one or ones for which you want to make a deposit. The time for which you already made a deposit is “in the bank” and can’t be affected by what you do about the other two periods.

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Military buyback basics

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Q: Where do I send my form for buying back my military time, and how do I find out how much it will cost?

A: To make a deposit for any years of active duty service, you’ll need to complete a copy of Form RI-20-97, Estimated Earnings During Military Service, and mail it to the military finance center for your branch of service along with a copy of your DD 214, Report of Transfer or Discharge. When you get that information, take it to your payroll office along with a copy of your DD 214 and a Standard Form 2803 (for Civil Service Retirement System employees) or SF 3108 (for Federal Employees Retirement System employees). Your payroll office will figure out how much you owe and arrange for you to make the deposit if you decide to do that.

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‘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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Buying back temp time

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Q: I worked in a federal job as a temporary employee where no retirement deductions were taken out for seven years. I was then converted to a permanent employee. I am now 62 years old with 33 years of federal service and a service computation date of 1977. I am looking at retirement but I am reading about the requirement to pay a deposit back so that my annuity will not be reduced by 10 percent. How do I go about determining what that amount is, and how do I pay it back?

A: Because your period of nondeduction service occurred before Oct. 1, 1982, you have the option of making a deposit to get credit for that time in your annuity computation or having your annuity reduced by 10 percent of the amount you owe, plus accrued interest. You can find out how much you owe by completing Standard Form 2803, Application to Make Deposit or Redeposit, available from you personnel office or online, and sending it to the Office of Personnel Management. Once you have that information, you can figure out which is the best option.

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TVA retirement

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Q: Who do I contact to buy back my time spent working with the Tennessee Valley Authority for retirement credit? I need an address and phone number.

A: To get credit for your period of service with TVA, you’ll need to ask them for a refund of your retirement contributions and then deposit that refund into your current retirement system. Your local personnel office can help you do that.

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CSRS offset and buying back time

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Q: I am a civilian federal employee who started with the government in September 1986. Is it true that no retirement deductions were taken until Jan. 1, 1989? If this is true, how can I get credit for the two-plus years during which no deductions were taken?

A: If you were hired into a position that required deductions from your pay, you would have been covered by Civil Service Retirement Offset (CSRS and Social Security) for the months preceding Jan. 1, 1987, when the Federal Employees Retirement System went online. Your CSRS Offset time would have been converted to FERS time and, because the deduction amounts were the same, the move would have been a financial wash.

If, on the other hand, you were hired into a position from which retirement deductions weren’t taken from your pay, to get credit for any period of service up through Dec. 31, 1988, you would have to make a deposit to the retirement system for that time, plus accrued interest. As a rule, any nondeduction service performed on or after Jan. 1, 1989, isn’t considered creditable service and no deposit for it can be made.

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Partial military buyback?

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Q: Can a retired military member elect to buy back only a portion of his military time?

A: If your active-duty service was continuous, the answer is no. If you were on active duty during separate, distinct periods of time, you can chose the period (or periods) of time for which you want to make a deposit.

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