Q. I have to buy back four years, which will give me 30 years with the Defense Department. It will cost me $8,000. I owe about $1,500. The rest is interest. I never knew about this until I started retirement plans. If I had, I would have started a repayment plan. Can you explained why the why there is so much interest and is there way it can be reduced? I have been waiting now for eight months for the Office of Personnel Management to make its final calculations so I can begin to pay. Is there anything I can do to get OPM speed up the process?

A. First, before January, 1985, the interest rate was a flat 3 percent. From that point forward, a variable interest rate has been charged. As determined annually by the Department of the Treasury, the interest rate for any year equals the overall yield to the retirement fund from retirement securities during the preceding fiscal year. Those rates have varied from a high of 11.125 percent in 1985 to a low of 2.25 percent this year.

Second, there is no way that the amount you owe in interest can be reduced. You owe what you owe.

Third, I’m not aware of any way that you can get OPM to speed up the process.


About Author

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


  1. Maureen Rinehart on

    Does this buyback need to be completed while you are still in Federal Service or can it happen after your retirement date? I am being told that even though OPM is receiving my estimated buyback amount with my retirement packet I am told that I will not get the bill until after my retirement date but my annuity will be calculated as if paid it back.

    I am just trying to validate that is correct.


    • That’s partly true. However, according to OPM, “A new retirement package will not be completed until post-56 is either paid or waived.”

  2. Frank Arguello on

    Excuse my ignorance – but I assume the above replies are referring to a military time buyback. If so yourr answer implies that we can drop off the agency payroll ( hence retire and then finalize a post-56 payback through OPM after the fact). My specific question is I am currently employed by the Dept of Army and want to retire on Jan 3, 2017. I am in the middle of a DOD post-56 mil buyback. I have received the DFAS estimate of mil earnings – our Army personnel office (ABC)has submitted the amount and the validated request to DFAS to establish the debt. I am ready to immediately pay the debt but DFAS has indicated I will not be able to obtain the debt notice or pay or receive a paid in full notice before I drop off the rolls on Jan 3rd, 2017. OPM guidance says I must have the post-56 buyback payment made before I drop off the rolls or it won’t be applied to my annuity computation.

    Does your answer indicate I can retire on January 3rd 2017-leave the rolls and even though my post-56 buyback is not complete can finalize it through OPM after I drop off the rolls and this buyback will be used in my annuity computation. I recognize my retirement package won’t be completed until the post-56 payment is paid – I assume it will be processedeventually – is that correct?

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