CSRS: Military Service Credit
(Military Service "Buy-Back")
As a general rule, military service is creditable to your CSRS retirement,
provided it was active duty and ended with an honorable discharge.
Waiver of military retired pay for
credit
With few exceptions, employees
who are in receipt of military retired pay cannot receive credit for
their military service toward retirement eligibility or for the computation
of annuity unless military retired pay is waived. The waiver does
not take effect until date of civilian retirement.
If you do not waive your military retired pay, your retirement rights (and
those of your surviving spouse, if any) will be based on your civilian service
only and military service will not be included in computing the annuity. You may
then receive both your military retired pay and your civil service annuity at
the same time.
Click here to
view Deciding
Whether to Waive Military Retired Pay
Credit for military service prior January
1, 1957
- You will not have your annuity recomputed at age 62 even if you
become eligible for Social Security benefits. (But if you also have military
service after 1956, a reduction may be required as explained below).
However, using the military service performed prior to January 1, 1957, in
computing your CSRS retirement benfits will eliminate any credit you might
have received from Social Security for that period of service.
Credit for military service after
1957
Beginning January 1, 1957 military service became subject to
Social Security. Treatment of military service under CSRS depends on whether it
was performed after December 31, 1956 (referred to as "post-56" military
service.)
Hired as CSRS before
10-01-82
Deposit paid: Your post-56 military service
will be credited for title (eligibility for retirement) and computation of the
annuity.
Deposit not paid: Your
post-56 military service will be credited for title. If you are not
eligible for Social Security at retirement, but will become eligible at age 62,
your Post-56 military service will be credited for computation of your annuity
until age 62. At that time the credit for post-56 military service is
eliminated. Your annuity will be recomputed by subtracting the years of
post-56 service from the total number of years of combined civilian and military
service. This typically reduces the CSRS annuity by 2% for each year of
Post-56 military service. For example, an employee age 55 with 30 years of
combined service (4 years of which is post-56 military service) would be
eligible for retirement. However, if he/she does not make a military
deposit and becomes eligible for Social Security at age 62, his/her annuity
would then be recomputed and reduced by 8% (4 years X 2% = 8%). If you are
eligible for Social Security at the time of retirement (normally age 62 or
older), the post-56 service will not be used in the computation of your
annuity.
No deposit is required and you will receive full credit for
post-56 military service with no future reduction.
Hired as
CSRS on or after 10-01-82:
A deposit is required to receive credit
for retirement eligibility and annuity computation
purposes.
How is your military "buy-back"
deposit computed?
The deposit equals 7% of base pay (not allowances earned
during the post-56 military service). The earliest interest begins to
accrue is October 1, 1986 or your 3rd anniversary of entry into a CSRS position.
As with civilian deposits, variable rates of
interest are assessed. No interest is charged if you pay the deposit,
in full, before the first interest accrual date (IAD).
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Overview - CSRS
