Q: My wife was covered under CSRS and worked for seven years at the Veterans Affairs Department as a GS-4 ward clerk between 1982 and 1990 before having a break in service and then returning to federal employment under FERS (not CSRS-Offset, but that is another story). In her new position, she is in a 6c covered law enforcement job and she will soon be turning 50 with the requisite 20 years of 6c law enforcement coverage. When she left her job at the VA, she cashed out her retirement, and we now want to buy it back.
I understand that once you have your 20 years of 6c time under FERS, any new years are counted as an additional 1 percent, instead of the 1.7 percent we get for our first 20 years. How will the seven old CSRS years be counted toward her retirement when she buys them back? We have been told conflicting things by our agency; on one hand we hear that the years get bought back at the much higher CSRS rate since that is how they were originally earned, while another HR person tells us that since she is now under FERS, the new years (once repurchased) will revert to the lower FERS rate of 1 percent per year amount, giving us only 7 percent more.
A: Because your wife had at least five years of CSRS service and took a refund of her retirement contributions before Feb. 8, 1991, she’ll get credit for that time in determining her total years of service. If she redeposits the money that was refunded to her, plus accrued interest, she will have a CSRS component in her annuity and those years will be computed under CSRS rules, using her high-3 on the day she retires. If she doesn’t redeposit the money, her CSRS component will be actuarially reduced based on the amount she owes and her age at retirement.