Can you convert your retired military time to your federal retirement?

Answer 1

Many have worked as civilians for years under the mistaken assumption military service is automatically credited toward civil service retirement. This is not true; if you want to convert you must crack open that wallet. While it's not mandatory for civilians to buy back active duty time, for many people, it is a good idea to buy back time, but for others, it may not be a good investment.

Employees covered under the Federal Employees Retirement System (FERS) may receive credit for post 1956 military service only if he or she deposits with the employing agency a sum equal to three percent (3%) of the military basic pay he or she earned during the period of military service, plus interest.

New civilian employees with active duty service have three years to buy back their time without interest. After that, the government charges interest on the money that needs to be paid back to buy retirement time. Therefore, it is best that employees request the amount of military earnings soon after beginning work. Employees then know how much the deposit is and can choose to pay it before interest begins accruing.

However, if an applicant like you has retired from the military service, an important decision needs to be made between two retirement options:

1. Combine military and civilian careers into one civilian retirement and forfeit military retirement. This decision also requires making a military service credit deposit of 3 percent of military base pay (Federal Employees Retirement System) or 7 percent of military base pay (Civil Service Retirement System) plus interest on military service credit deposits.

2. Retire from CSRS or FERS using only civilian federal service and continue receiving a separate military retirement benefit.

A decision to use military service toward a civilian retirement would not affect Social Security retirement benefits. The decision to combine careers into one retirement also would not alter other military retirement perks such as health care and commissary privileges.

Generally, an employee must waive military retired pay in order to receive credit for military service in the computation of the CSRS or FERS annuity, unless he or she is:

1. Retired from civilian service after Sept. 30, 1982, and has military service that was not used in the computation of military retired pay -- for example, four years at one of the service academies such as West Point or the Naval Academy in Annapolis.

2. Receiving military retired pay awarded:

• On account of a service-connected disability incurred in combat with an enemy of the United States;
• On account of a service-connected disability caused by an instrumentality of war and incurred in the line of duty during a period of war; or
• Under provisions of 10 U.S.C. 12731-12739 (retired pay under Chapter 1223 for members of the reserves).

The decision depends on the financial impact of keeping the careers separate or combining them. However, someone with military retirement pay, like you, would probably be better off keeping your military retirement pay, as you can't double dip without it affecting one of the retirements.

But first, meet with your agency retirement section to do the arithmetic and figure out how this decision would affect your military retirement check.

If you choose to "buy back" military service time for civil service retirement, former military members must get their estimated earnings from the appropriate finance center.

Employees must use a separate request for each branch of service. They attach a copy of their DD Form 214 or equivalent and any available records of pay or promotions to the Request for Earnings during Military Service form provided by their civilian personnel office. If they do not have a DD Form 214 or equivalent, they can get a Standard Form 180 from their personnel office and have their service verified before forwarding the request form to the pay center.

Soon after, prepare to write a lump sum check or have incremental withdrawals from your paycheck.