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Service Deposits

  
Military Service Deposits
 
What is a Military Service Deposit?
If you have performed active military service after December 31, 1956, this service may be potentially creditable for retirement purposes if:
·         It was active duty (Title 10); and
·         It was honorable service; and
·         A deposit is made for military service when applicable.
There is a 2-year grace period from the date of your first retirement coverage to pay a military deposit in full and not be charged any interest. On the 3rd year anniversary, interest will accrue annually until the deposit is paid.
If you have any question about whether your particular military service is creditable, check with a Human Resources Specialist (see contact list above) early in your career to find out. If you decide to pay the military deposit, it must be paid in full before you retire. Service periods that have a break of at least one day will be paid separately. The process to pay the deposit can take time so don't wait until right before retirement to begin!
Uniformed Services Employment and Reemployment Rights Act (USERRA)
The deposit rules also apply to active military service that interrupts a period of Federal civilian service and you are restored or reemployed on or after August 1, 1990 under the provisions of USERRA. Service under Absent-US is creditable if a deposit is paid.
How much is the deposit?
For FERS/FERS-RAE - The amount of the deposit is equal to 3% of the military base pay earned, plus accrued interest. Interest is charged at the variable rate established annually by the US Treasury if it is not paid in full within the 3-year period from retirement coverage.
If the military service falls under the provisions of USERRA, the deposit is the lesser of the applicable percentages of military base pay, or the amount of the FERS/RERS-RAE contributions you would have paid if you had worked instead of being on active military duty.
What are the steps for paying the deposit?  (For service covered by USERRA, skip to Step 3)
Step 1 - Request Military Earnings
Step 2 - Computation of Deposit and comparison annuity estimates
  • DFAS will return the RI 20-97 to you indicating your estimated earnings during your military service. This can often take several months.
  • Provide a copy of the earnings statement to your Human Resources Specialist (see contact list above) who will compute the amount of the deposit owed.
Step 3 - Paying the deposit
  • Ask questions of your Human Resources Specialist (see contact list above) if needed so that you understand what you are gaining by paying the military service deposit.
  • Your Human Resources Specialist will assist you in completing the SF 3108 Application to Make Service Credit Payment.
  • You can choose to pay the deposit in full by certified check, money order or you can authorize payroll deductions.
Step 4 - The Human Resources Specialist will forward your military deposit application package to DFAS for processing.
Step 5 - When the deposit is paid in full, request a paid in full letter from your Human Resources Specialist (see contact list above).
  • It is very important that you keep this document for your permanent retirement records as proof of payment for retirement purposes. Provide a copy to your Human Resources Specialist to include in your official records.
  • Your Service Computation Date (SCD) for Retirement will be updated in the payroll database by the Human Resources Specialist once confirmation of payment in full is received, if applicable.
 
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​References
  
  
Links
DFAS Military Service Deposits for Civilian Employees