Retirement contributions and taxes


Q. I am a recently retired CSRS employee. I note a huge inequity concerning my CSRS retirement contributions from the federal retirement benefits booklet the Office of Personnel Management sent me. I am told that I have a retirement contribution credit of $164,836 after-tax dollars. From this amount, I will get 310 equal monthly payments of $531.73 that will be a tax-exempt portion of my total monthly annuity.

However, I am told once I receive gross monthly retirement benefits that exceed my contributions (tax exempt and taxed portion), there are no more contribution credits in my account, and no lump-sum payment will be made.  What regulation under Title 5 U.S. Code (or others) allows the government to screw me by extending the time period to use up my tax-free portion of my annuity while minimizing the time to exhaust my contribution amount? According to the retirements benefits booklet OPM sends, recovering an amount equal to my retirement contributions for tax purposes is treated differently from exhausting my lump-sum contribution credit. Has there been a class-action suit addressing this issue?

A. The amount of your retirement contributions that are considered a tax-free part of your annuity during any calendar year are determined by actuarial (life expectancy) tables contained in the federal tax code. To learn about the whys, wherefores and how to file, download a copy of IRS Publication 721, Tax Guide to U.S. Civil Service Retirement Benefits. You’ll find it at


About Author

Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to

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