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A military deposit is a payment made to the civilian retirement fund to allow creditable military service to be used towards retirement eligibility and annuity computations. A deposit can be made for service performed after the year 1956 in the Army, Marines Corps, Navy, Air Force, Coast Guard and certain types of service with the National Oceanic and Atmospheric Administration and the Public Health Service.
Military service is creditable towards civilian retirement if:
CSRS employees hired prior to 10/01/1982, will not need to make a military deposit if they will not be eligible to receive Social Security benefits. Any creditable military service will be used towards retirement eligibility and in the computation of their annuity.
CSRS Employees hired prior to 10/01/1982, who are not eligible for Social Security at retirement, but become eligible at age 62, may use their military service for retirement eligibility and annuity computation until age 62. At age 62, credit for the military service is eliminated and the annuity is recalculated to reflect only creditable civilian service. If a military deposit was made prior to retirement, the military service will continue to be used in the annuity computation.
Regardless of Social Security eligibility, CSRS employees first hired on or after 10/01/1982, must make a military deposit to receive credit for retirement eligibility and annuity computation.
The amount of the deposit is equal to 7% of military base pay earned, plus interest. The rate increases for military service performed in 1999 and 2000 to 7.25% and 7.4% of base pay respectively.
FERS employees must make a military deposit to receive credit for retirement eligibility and annuity computations.
The amount of the deposit is 3% of the military base pay earned, plus interest. The rate increases for military service performed in 1999 and 2000 to 3.25% and 3.4% of the base pay and respectively.
FERS employees with a CSRS component are subject to CSRS military deposit rules.
Making a Military Deposit
Employees have 3 years from their first retirement covered position to make a deposit interest free. On the anniversary of the date of the third year, interest begins to accrue on the unpaid balance.