Owed Deposits for Federal Retirement

Owed Deposits Under CSRS/CSRS Offset

Anyone working for the federal government prior to October 1, 1982, in positions for which deductions for CSRS were not made will receive limited credit for this service in the computation of a CSRS/CSRS Offset annuity.

Specifically, the period will count when computing length of service. However, the annuity will be reduced by one-tenth of the amount that the employee would have paid into CSRS plus interest had the service been covered by CSRS.

Anyone working for the federal government after October 1, 1982, in positions for which CSRS deductions were not made will have to make the required deposit before that service can be used in any annuity computation. If the deposit is not made, the time involved can still be counted for meeting the minimum length of service for an immediate annuity, and for determining high-3 average salary. However, no credit will be allowed in the computation of the annuity—that is, the time will not be multiplied by a percentage of the high-3 average salary.

Owed Deposits Under FERS

While in general FERS coverage is not provided to anyone not making retirement contributions, some FERS employees have worked in the past in federal jobs where retirement contributions were not taken out of their salaries. In order to get credit for any such “non-deposit” service performed before 1989, FERS employees must make a deposit to the retirement fund. The deposit equals 1.3 percent of base pay for that period, plus interest.

FERS employees cannot make a deposit for non-deduction service after 1988.

Whether it makes sense for someone to make a deposit depends on how much is owed versus what will be returned through an annuity over time.