Q. A friend is in her 48th year of federal service and has not, to date, paid the non-deposit for her first three years of employment. Once she passed 41 yrs 11 months of federal employment, a deduction for the non-deposit began to be deducted from her check. Is this the usual protocol in this situation? Will she be able to repay her non-deposit before she retires, now that this has happened?
A. If an employee has a period of creditable service for which deductions weren’t taken and has reached the maximum earned annuity amount (80 percent), those excess retirement contributions will be used to pay for that period of non-deduction service. When she retires, her excess contributions, plus interest, will be returned to her with the option of keeping the money or purchasing additional annuity, which isn’t subject to the 80 percent limit. For a full explanation, go to http://www.opm.gov/retirement-services/publications-forms/csrsfers-handbook/c050.pdf and scroll to Section 50A3.1-2 Maximum Annuity.