Safety Deposit

Civil servants who spend time in the military receive credit for seniority, within-grade increases, completion of probation, career tenure and leave rate accrual. But those years in uniform do not count toward a Civil Service Retirement System or a Federal Employee Retirement System annuity.

That's because members of the uniformed services don't contribute to the civil service retirement systems, which can lead to an unanticipated, and unappreciated, surprise on retirement day: a smaller check. To make up for lost time, when you enter or return to the civil service, employees can make a deposit to the retirement fund to cover your period of military service.

The older you are, the better the deal. WWII veterans don't need to worry. If your military service was performed before Dec. 31, 1956, no deposit is necessary for an annuity that includes military service. For employees who performed military service in 1957 and after, though, and were then hired as civilian employees under CSRS before Oct. 1, 1982, there's something called a Catch-62.

According to the Office of Personnel Management, without a deposit, these employees will receive credit for their military years until age 62. After that, if they are entitled to Social Security benefits, and no deposit was made, their military service will no longer be used in the computation of their CSRS benefit. It will be recalculated to exclude credit for military service. If employees are not eligible for Social Security benefits, they will continue to receive full credit for military service.

If your military service was in 1957 or later and you were hired into CSRS after Oct. 1, 1982, there's a catch-any-age. You must make a military service deposit in order to receive credit for military service for any purpose. The same goes for all FERS employees. You can make a deposit by completing this form and returning it to your human resources officer, who will send it to the Office of Personnel Management. You should consider keeping a copy of it in your personal files.

Veterans under CSRS who want their military service to count toward their civilian retirement benefits must deposit 7 percent of their military earnings into the Civil Service Retirement fund. The deposit is 3 percent if the employee is under FERS.

These deposits can amount to thousands of dollars, which may or may not be worth the higher annuity to some vets-turned-feds.

"We would always tell people it takes you 10 years to get back your deposit for the difference it makes in your annuity," Kenneth Glass, director of retirement benefits at the National Active and Retired Federal Employees Association said.

There's good news for civil servants in the National Guard, however. Since a law was passed in 1994, full-time National Guard service that took place after Aug. 1, 1990, is creditable for annuity computation without having to make a deposit..

Veterans make interest-free deposits during the first three years of employment as civilians. After that, they must pay the deposits plus interest. Once you retire, it's too late.