Q. I recently read that beginning Jan. 1, 2013, all new federal employees will be covered under FERS-Revised Annuity Employee, which basically means they will have to pay an additional 2.3 percent into FERS. However, per the Office of Personnel Management memo, “There are three exceptions to this general rule and the date Dec. 31, 2012, is a key date for each of those exceptions. An individual will be excluded from FERS-RAE coverage if any of these exceptions apply:
1. The individual on Dec. 31, 2012, was covered under FERS;
OR 2. The individual on Dec. 31, 2012, was performing civilian service which is creditable or potentially creditable service under FERS.
OR 3. The individual on Dec. 31, 2012, was not covered under FERS and was not performing civilian service which is creditable or potentially creditable service under FERS, as of Dec. 31, 2012, had performed at least five years of civilian service creditable or potentially creditable under FERS, including service subject to CSRS or CSRS Offset.
I am serving on active duty in the Air Force with more than five years in service (August 2007) and considering separating and seeking federal employment. Under Rule 3 above, does this count as five years of “potentially creditable service under FERS,” meaning that I will not be subject to FERS-RAE?
A. No. Under the law, you would have to have five years of civilian service to avoid the higher FERS-RAE payroll deduction amount.
