In order for military service to be considered creditable for civilian retirement purposes, you must have done one of the following:
Served on active duty in the armed forces, which are defined as the Army, Navy, Air Force, Marine Corps or Coast Guard and, after June 30, 1960, in the Commissioned Corps of the Public Health Service or, after June 30, 1961, in the Commissioned Corps of the National Oceanographic and Atmospheric Administration;
Served as a cadet in the Army, Air Force or Coast Guard academies or as a midshipman at the U.S. Naval Academy;
Been called to active duty or active duty for training while in the Army Reserve Officers Training Corps or the Naval or Marine Corps Reserve Officers Training Corps.
Service in the U.S. Merchant Marine is not considered to be military service. Nor, as a rule, is service in a reserve component of the armed forces or the National Guard, unless you were called to active duty in the service of the United States.
How Social Security affects creditability
Since January 1, 1957, everyone serving in the military has been covered by Social Security. And, since January 1, 1984, every civilian newly hired by the federal government (or returning to work after a break in service) has been covered by Social Security. In 1982 the law was changed to prevent employees from getting credit twice for the same period of employment – once from Social Security and the other from a civilian annuity. The result was two sets of rules. One for those first hired before October 1, 1982 and another for those hired on or after that date.
Hired before October 1, 1982
If you were first hired before October 1, 1982, you will get credit for your military service time in determining your eligibility to retire. You’ll also have the option of making a deposit to the civilian retirement system to get credit for that post-1956 service in the computation of your annuity.
Whether you actually need to make a deposit depends on your eligibility for a Social Security benefit. OPM only checks once: at age 62 if you are retired before that age or when you retire, if it’s on or after the date on which you are 62.
If you are eligible for a Social Security benefit when OPM checks and you haven’t made a deposit for your active duty service, those years will be deducted from your total years of creditable service and your annuity recomputed without them. If you haven’t made a deposit and aren’t eligible for a Social Security benefit when OPM checks, your annuity won’t be affected.
Hired on or after October 1, 1982
If you were hired on or after October 1, 1982, you will only get credit for your military service if you make a deposit to the civilian retirement system for that time. If you don’t, it won’t be used either to determine your eligibility to retire or in your annuity computation. So, when you do retire, your annuity will be based solely on your years of civilian employment.
Special rules for retired military
If you are receiving military retired pay for you active duty service, it doesn’t make any difference when you were hired as a civilian. You’ll have to make a deposit to the civilian retirement system to get credit for that service and, with one exception, waive your military retired pay before you retire.
Here’s the exception. You can keep your military retired pay if you were awarded it because of a service-connected disability either incurred in combat with an enemy of the United States or caused by an instrumentality of war and incurred in the line of duty during a period of war.
On the other hand, if you are receiving – or will be receiving – reserve retired pay, you won’t have to waive that pay. However, you’ll need to review the rules spelled out above to determine if you need to make a deposit to get credit for any periods of active duty service that occurred within your reserve career.
When called to active duty
If you are called to active duty while employed by the federal government and are placed on Leave Without Pay–Uniformed Service (LWOP-US), that period of time will be governed by the same rules that apply to all employees who want to get credit for periods of active duty military service. You’ll have to make a deposit for the entire period of your absence on LWOP-US to get credit for that time after you return to your civilian position.
However, there are situations where a deposit won’t be required. For example, if you take annual leave or if you are approved for regular leave without pay. If you are approved for regular LWOP, you can take up to six months leave within a calendar year and get credit for that time without having to make a deposit. However, any period of absence beyond that can’t be credited for any purpose nor can a deposit be made to get credit for it.
In the next column I’ll talk about how much you’ll have to pay to get credit for your military service and how you can go about doing it.