Paying back service credit


Q. I am retiring Sept. 30. I have been continuously employed by the federal government since Sept. 21, 1981. I first worked for the Department of the Interior from Sept. 21, 1981, to Feb. 27, 1987. I was under FICA from Sept. 21, 1981, to Oct. 29, 1983, after which time I was covered under CSRS. I became employed by the Justice Department (law enforcement 1811) on March 1, 1987. I transferred to FERS on Jan. 3, 1999.

I understand that service is calculated differently for service from Sept. 21, 1981, to Sept. 30, 1982, and Oct. 1, 1982, to Oct. 29, 1983. According to the Office of Personnel Management, I owe a service credit (FERS) payment of $1,951.48 for the time period of Sept. 21, 1981, to Oct. 29, 1983. From what I understand, if I don’t pay back the period of Sept. 21, 1981, to Sept. 30, 1982, the time is still credited and calculated in my total time, and my annuity is only reduced 10 percent of what I owe ($195 a year divided by 12 months = $16 per month annuity reduction). Correct?

If I don’t pay back the period of Oct. 1, 1982, to Oct. 29, 1983, the time is not calculated in my total service credit computation. Is that correct?

I thought I read that no matter if this was during a CSRS time, the time would be credited as FERS since I am FERS now. Is that correct, or will it be credited as CSRS?

Also, is it possible to pay back the time from Oct. 1, 1982, to Oct. 29, 1983, only and not the earlier period?

My agency says I owe a deposit of $12,105 instead of the $1,951.48 that OPM says.  I am very skeptical of my agency’s calculations. My agency says to just go with the OPM calculation. That’s a big discrepancy.

Does the service credit payment need to be made prior to my retirement date?

A. You are correct. The rules are different for those two periods of service. For service before Oct. 1, 1982, you’ll get credit for that time in determining your total service; however, if you don’t make a deposit for that time, the CSRS portion of your annuity will be reduced by 10 percent of the amount you owe, including accrued interest. For service on or after Oct. 1, 1982, you’ll still get credit for time in determining your years of service; however, that time won’t be included when computing the CSRS portion of your annuity unless you make a deposit.

You can make a deposit for either of those time periods, both of them or neither. However, if you decide to make a deposit, you must do it before you retire.

Note: While there’s no way to tell who is right about the amount you owe, you have to go with OPM’s calculation.


About Author

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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