If your answer to both questions is "yes," you may want to make a deposit into the Civil Service Retirement System (CSRS) or Federal Employees Retirement System (FERS) so that your military service will be included in your permanent retirement annuity calculation.
A military deposit must be paid in full before you retire, and each period of active duty must be paid in full in order to be credited. It's better to pay a military deposit as soon as possible to avoid additional interest charges. Why is a military deposit necessary? Effective January 1, 1957, Social Security (FICA) started being deducted from military pay. If you qualify for Social Security benefits, the military service will automatically be credited toward those benefits.
In order to receive benefits from another retirement (i.e., CSRS or FERS), you must also pay into that retirement to "buy in" your military time. You can't get benefits from two retirement systems for the same period of service if you have only paid into one.
Once we have received a statement from our Minneapolis Information Service Center indicating you have paid a period of active military service in full, a PS Form 50 will be processed crediting that period of service toward your RCD.
[Example
of FERS benefit. 3 years of service equals 3 percent of your high-three-years'
average salary. With a high-3 of $35,000, 3 percent would equal $1,050,
or $87.50 per month.]
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To
make a military deposit, you need the form "Estimated Earnings During Military Service"
, which is also available from Employee Benefits. You must send your
completed request form, along with a copy of your DD-214 for each period
of active military service, to the payroll center for the military branch
in which you served. (Addresses are provided along with the "Estimated
Earnings" form.)
The military payroll center will complete the form by providing your base military earnings for the period(s) indicated and will return the completed form to the Gateway District Employee Benefits office, where the amount of deposit due based on those earnings will be calculated.
CSRS employees must pay 7 percent of base military earnings, plus interest which has compounded yearly since October 1, 1986. FERS employees must pay 3 percent of base military earnings, plus interest accruing annually beginning either three years after the career appointment date or three years after January 1, 1987, whichever date is later.
The total amount of deposit due, including interest, will be sent back to you, along with the two forms necessary to make the military deposit (SF 2803 and PS 2805). To make the deposit, you must then complete those two forms, indicating which method of payment you prefer.
Your payments may be a lump sum, by check or money order, installments of at least $50 each, by check or m
The military payroll center will complete the form by providing your base military earnings for the period(s) indicated and will return the completed form to the Gateway District Employee Benefits office, where the amount of deposit due based on those earnings will be calculated.
on order, or payroll deductions of at least $5 per pay period. Completed forms SF 2803 and PS 2805 (along with any checks or money orders made payable to "U.S. Postal Service") should be sent to Employee Benefits for processing.