Deposits and redeposits for civilian service

They solve different problems, and mixing them up leads people to the wrong answer. A deposit covers service where retirement deductions were never taken. A redeposit covers service where deductions were taken and later refunded to you.

Deposit service typically comes from a temporary appointment, a summer job with an agency, or casual postal work. You were paid, you earned service time, but nothing came out of your check for retirement.

Redeposit service is different in origin. You worked in a covered position, contributions came out, then you left federal service and asked for your money back. That refund erased the pension credit you had built.

Both are handled through the same form, the SF 3108, and both are optional. Neither is a bill. Filing the paperwork to find out what you owe does not commit you to paying it.

This is the rule that catches people, and there is no way around it. Under FERS you can only pay a deposit for non-deduction service performed before January 1, 1989. Service after that date is generally not creditable at all.

Read that carefully, because it is stronger than it first sounds. Post-1988 non-deduction service is not expensive to buy back. It cannot be bought at any price. The time simply does not count toward your pension, and no payment changes that.

A temporary appointment in 1987 is therefore worth investigating. The same appointment in 1991 is a closed question, however much service it represented.

One category escapes the cutoff. Peace Corps and VISTA volunteer service can be paid for regardless of when it was performed, excluding training time, and it is priced differently from ordinary non-deduction service.

This is also where the military deposit rules mislead people. Military service has no equivalent cutoff, so someone who successfully bought back their military time reasonably assumes their temporary civilian time works the same way. It does not.

Yes, and this is newer than most guidance admits. FERS employees covered on or after October 28, 2009 may redeposit refunded FERS contributions. For years before that, a FERS refund was permanent and the credit was gone for good.

Older material still says otherwise. Reference documents written before the law changed state that FERS refunds can never be repaid, and some remain in circulation. If you read that somewhere, check the date on it.

Unpaid refunded service is not worthless, which distinguishes it from unpaid pre-1989 deposit service. You still receive credit toward your eligibility to retire, but not toward computing your benefit. So the loss shows up in the size of your annuity rather than your ability to claim one.

The cost is the refund you received plus interest. The clock has been running since you took the money, so the amount owed on an old refund can be considerably more than the check you cashed.

The arithmetic tends to favor paying, and the reason is a timing mismatch. What you owe is based on what you earned back then. What you gain is based on your High-3, which reflects what you earn now.

Consider the shape of it. A year of temporary work early in a career might have paid a fraction of what the same person earns three decades later, yet buying that year adds a full year of service to a pension computed on the higher salary.

Interest works against you, and waiting is what makes it expensive. OPM charges interest that accrues over time, so the same period of service costs more the longer you leave it. The rate changes from year to year, which is why we point you to your own statement rather than quoting a figure.

The deadline is later than people assume. A civilian deposit or redeposit can be paid any time before OPM finalizes your retirement claim, which is well after your last day. Military deposits are the strict ones and must be paid before you separate.

Start by identifying the service, not by guessing at a number. Look through your personnel records for any period where you were paid by a federal agency but were not in a regular covered appointment, and for any refund you took after leaving.

Your records are the evidence, and you lose access to them when you leave. Download your personnel file while you are still employed, since reconstructing a temporary appointment from the 1980s without paperwork is genuinely difficult.

From there the process runs through your HR office, which certifies the SF 3108 and forwards it to OPM. OPM computes the amount and sends you a statement, and that step alone can take several months.

None of this obligates you. To see how another year or two of creditable service would change your projected pension before you decide, run your free readiness score and compare the result with and without the service.