Alternative form of annuity


Q. I am planning to retire this summer and received my CSRS retirement estimate report. Since I quit the government and withdrew my retirement ($5,000) in 1984, and never paid it back, I received a redeposit report which shows how much I would have to pay back now to have an unreduced annuity. I don’t intend to pay it back because it is a huge chunk of change (and the monthly reduction is minimal in comparison). However, at the bottom of this report, it says, “Pre-03/01/1991 Redeposit Service cases: If redeposit is NOT made or the Alternative Form of Annuity (AFA) is NOT elected, employee’s annual annuity will be actuarially reduced.”

I always knew that those years would count toward retirement, and my annuity would be reduced. But, what is AFA? Is it something I should (or even can) elect? I don’t see it mentioned anywhere but on this report.

A. The Alternative Form of Annuity allows employees who are diagnosed with a life expectancy of less than two years (and aren’t applying for disability retirement) to receive a tax-free refund of their retirement contributions. For the full story, go to


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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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