Generally, both civilian and military service performed for the federal government is creditable for retirement purposes.
Generally, full–time credit is allowed for periods of government employment between the dates of an employee’s appointment and separation.
Full-time credit is not allowed, e.g., when an employee is serving on a “when–actually–employed” basis or when an employee is in nonpay status in excess of 6 months in a calendar year (see 562.255).
With certain exceptions, service creditable under the CSRS is federal and District of Columbia government employment that meets all of the following tests:
- The employee was engaged in the performance of federal functions under the authority of an act of Congress or an Executive Order.
- The employee was appointed or employed by a federal officer in his or her official capacity as such.
- The service was performed under the supervision and direction of a federal officer.
The National Defense Authorization Act (NDAA) for FY 2010 affects certain specified services performed in District of Columbia positions. Previously, these services were not creditable under CSRS or FERS. Under Section 1905 of the NDAA, such specified services, including the services of law enforcement officers, are creditable for retirement eligibility purposes, but such services are not creditable for the computation of the annuity benefits.
Individuals will obtain credit for such service as follows:
- The appropriate personnel official for the District of Columbia or other independent employing entity must: (1) certify that the individual performed qualifying service for the District of Columbia; and (2) certify the length of time that the individual served.
- Individuals will be eligible for credit only if they are employed under CSRS or FERS on or after October 28, 2009.
Breaks in service are treated as follows in the computation of creditable service:
- Periods of separation of 3 calendar days or less are not deducted in computing total creditable service.
- Periods of separation which total more than 3 days are deducted in computing total creditable service, except in certain instances when injury compensation benefits are received (562.252).
Service for which retirement deductions have been refunded to the employee is creditable in establishing eligibility for annuity. This service may also be used in computing high-3 average pay (566.25), if appropriate. If redeposit is not made, such service is not included in calculating length of service for annuity computation purposes
Civilian service covered by Social Security (FICA) is creditable for retirement purposes if such service is followed by employment which is subject to the retirement system.
Employees who serve on a part-time basis (non–full–time service with a prearranged regularly scheduled tour of duty) such as 4 hours a day, 5 days a week are allowed full calendar credit for all time elapsing between dates of appointment and separation.
The service of a part-time flexible schedule employee, including substitute rural carriers, is fully creditable from the date of original appointment to the date of separation. Periods during which the employee was on furlough are creditable only if the periods of absence in the aggregate do not exceed 6 months in any calendar year.
Calculation of retirement benefits for part-time employment is changed as follows:
- Before October 28, 2009. Individuals retiring under CSRS who were employed on a part-time basis during their final 3 years of service had their annuities computed using two different high-three average salaries. as follows:
- The annuity calculation for service performed on or after April 7, 1986, used a deemed high-three average salary that was computed using full-time equivalent rates of pay for the high-three period.
- The annuity calculation for service performed before April 7, 1986, used a high-three average salary based on the highest rates of pay received by the individual, which could be based on a period prior to the final 3 years of service.
- After October 28, 2009. The National Defense Authorization Act (NDAA) for Fiscal Year 2012 states that the deemed high-three average salary will be used for all service, regardless of when performed. Section 1903 of the NDAA does not change the other provisions applicable to calculation of annuities involving part-time service. The amendment applies only to annuities based on separation from service on or after October 28, 2009.
With the exception of service as a part-time flexible employee or substitute rural carrier (see 562.23), an employee serving on an intermittent basis (non–full–time service without a prearranged regularly scheduled tour of duty) receives credit, for retirement purposes, for only the actual days in a pay status. This type of service includes Rural Carrier Relief, Rural Carrier Associate, and Postmaster Relief Leave Replacement.
The following provisions apply:
- Conditions. Special retirement credit is granted to employees of Japanese ancestry who meet the following conditions:
- The employee must have been employed on July 15, 1952 by the federal government in a position covered by the CSRS.
- At some time during the period from December 7, 1941 to September 3, 1945, by reason of United States Policy or program or to enter the U.S. Armed Forces, the employee must have:
- Been separated from the federal service, or
- Lost opportunity for, or been denied, probational appointment from a Civil Service register, or
- Been denied reinstatement to a position in the federal service.
- Creditable Time. An employee meeting conditions in 562.251a receives retirement credit for:
- The period of internment;
- The period for which loss of opportunity for, or denial of, appointment occurred;
- The period which resulted from denial of reinstatement; or
- The period which resulted from separation from the service.
- Installation Head Responsibility. When, based on documented evidence, an employee is found eligible for such special retirement (and leave) credit, installation heads prepare personnel action forms to adjust personnel and retirement records.
The following provisions apply:
- Employee on Leave Without Pay (LWOP) Status. Credit is allowed for the entire period that an employee receives Office of Workers’ Compensation Program (OWCP) benefits if the employee is carried on the postal rolls in LWOP status.
- Employee Separated from Postal Service. Credit is allowed for a period of separation during which a former employee (not an annuitant) was in receipt of OWCP benefits, provided the employee is later reemployed in the Postal Service (or federal service). Annuitants who are reemployed after a period of separation during which they received OWCP benefits in lieu of an annuity receive credit for the separation only after they have qualified for a redetermination of the annuity. See 566.52, Redetermination of Annuity.
The following provisions apply:
- Policy. An employee whose separation or suspension is determined to have been improper and who is restored retroactively is considered for retirement purposes as having properly been in the service during the intervening period of erroneous separation or suspension.
- Determining Retirement Credit:
- If restoration is with entitlement to pay, the employee’s basic pay over the intervening period is subject to regular retirement deductions and the employee receives credit for the entire period.
- If restoration is without entitlement to pay, retirement credit is allowed for as much of the intervening period without pay as does not exceed 6 months in any calendar year.
- Redeposit Requirement. An employee who received a refund of retirement deductions before restoration must redeposit the refund in order to be eligible for any future annuity based on the period covered by the refund.
If an employee is granted LWOP to serve as a full–time officer or employee of an employee organization composed primarily of federal/postal employees, the following action is taken:
- Employing Office:
- Notifies the employee of the employee’s right to elect to continue retirement coverage. (The employee’s election must be in writing.)
- Sets up a follow–up system to remind employees that election must be filed within 60 days after employee enters LWOP status.
- Makes a final effort to urge employees to make an election.
- Documents the action taken if, after the employees have been contacted, they continue to refuse to make an election. Failure to make an election is considered an election not to continue retirement coverage. A copy of the election (or installation head’s documentation) is filed in the employee’s official personnel folder.
- Employee:
- Files an election to continue retirement coverage for as long as in LWOP status. The election must be filed with the installation head within 60 days after LWOP begins.
- Pays or arranges to have paid to the Eagan ASC (if elects to continue retirement coverage), on a current basis, both the current percentage of salary retirement deductions and the matching agency contribution which would be applicable if the employee were in pay status.
- Declination of Coverage:
- Credit Not Allowed. If an employee on LWOP serving in an employee organization declines to continue retirement coverage, this time is not creditable for retirement purposes. This time is also not allowed for any other purpose in which service creditable for retirement is used as a criterion (e.g., leave or job retention).
- Retirement/Death on LWOP. If the employee retires or dies while on LWOP, annuity or survivors’ annuity rights are determined as of the day preceding the one on which the employee entered on LWOP.
An employee on leave of absence is granted credit for:
- All leave with pay.
- Time on the rolls in a nonpay status (i.e., LWOP, suspension, furlough, and Absence Without Leave (AWOL)), not exceeding 6 months in the aggregate in any calendar year, except when the entire time is creditable as provided in 562.252, 562.254, and 562.3.
Retirement credit is allowed for honorable active service in the Army, Navy, Air Force, Marine Corps, Coast Guard and, after June 30, 1960, in the Regular or Reserve Corps of the Public Health Service of the United States, and, after June 30, 1961, as a commissioned officer of the National Oceanic and Atmospheric Administration (formerly Coast and Geodetic Survey and Environmental Science Services Administration).
Active duty for training in the reserve components of these services is also creditable. Inactive duty time while in the reserve components of these services is not creditable.
Service as a midshipman at the U.S. Naval Academy and as a cadet at the U.S. Military Academy, Air Force Academy, or Coast Guard Academy constitutes military service and is also creditable for retirement purposes.
The following provisions apply:
- National Guard Service is creditable only when:
- The organization is activated into the actual services of the United States, or
- The employee is ordered to active duty service or training as a member of the United States Armed Forces Reserves under one of the following authority:
- Section 233(d) Armed Forces Reserve Act of 1952.
- A provision of Title 10, United States Code.
- National Guard service or training periods are not creditable under the following circumstances:
- Service performed before January 1, 1953, and not directly under a call by the President of the United States.
- Service performed for a state government or duty called for by a governor of a state.
Military service performed prior to January 1957 is creditable for retirement purposes. Full credit is allowed without making contributions to the retirement fund to cover such service.
The following provisions apply:
- Employed On or After October 1, 1982. Employees who are first employed in a position subject to the CSRS on or after October 1, 1982 will not receive credit for their post–1956 military service unless a service credit deposit is made for that military service. (See 562.34.)
- Employed Before October 1, 1982. Employees who were first employed in a position subject to the CSRS before October 1, 1982 have the option of either:
- Making the service credit deposit for their post–1956 military service as specified in 562.34; or
- Receiving credit for their post–1956 military service, and having their annuity recomputed at age 62 to eliminate post–1956 military service if they are eligible for Social Security Old–Age or survivor benefits. See Handbook EL–504, Post–1956 Military Service Credit Deposits, for procedures on making deposits for post–1956 military service.
Military service must have been performed before the date of separation on which title to annuity is based and must have been terminated by honorable discharge or terminated under other honorable conditions.
Military service is not creditable if the employee receives retired pay unless the retired pay is awarded under conditions listed in 562.35. An employee may not receive credit for both civilian service and military service covering the same periods of time.
The deposit for post–1956 military service for CSRS purposes is 7 percent of basic military pay plus interest.
The following provisions apply:
- Grace Period. No interest is charged if a deposit for post–1956 military service was completed by September 30, 1986 or within 3 years after the date the employee was first hired in a position subject to CSRS, if later.
- Rate of Interest. The rate of interest is a variable rate which is compounded annually. The variable rate of interest is determined by the Secretary of the Treasury each calendar year on the basis of the average yield of new investments purchased by the Civil Service Retirement and Disability Fund during the previous year.
The receipt of military retired pay bars the crediting of military service toward CSRS annuity except when:
- The retired pay is awarded because of a disability incurred in combat with an enemy of the United States or caused by an instrument of war and incurred in line of duty during a period of war, or
- The retired pay is granted under 1331 through 1337 of Chapter 67, Title 10, U.S. Code, which pertains to retirement from a reserve component of the armed forces on the basis of service instead of disability.
- The employee waives the retired pay.
The following provisions apply:
- General. An applicant for annuity receiving military retired pay which bars the use of the military service in the computation of a CSRS annuity may elect to give up military retired pay. The military service may then be added to the civilian service in computing the CSRS annuity.
- Procedures. An employee retiring from the Postal Service who decides to waive military retired pay:
- Notifies the Military Finance Center at least 60 days before the retirement date of the decision to waive military retired pay in order to receive credit for the military service for computing the CSRS annuity. The notice includes: (a) the employee’s full name, military rank, and serial number; (b) the desired date that retired pay is to stop (the day before annuity begins); and (c) a request that the Military Finance Center notify OPM of the effective date of the waiver.
- Attaches a copy of the waiver request to SF 2801, Application for Immediate Retirement, so that OPM knows a waiver has been requested. If the retired pay finance center’s acknowledgment of the waiver is received before the retirement application is submitted to OPM (through the Eagan ASC), attaches a copy of the Military Finance Center’s acknowledgment of the waiver.
Unused sick leave to an employee’s credit is used in computing service for annuity purposes if the employee: (a) retires on an immediate annuity or (b) dies leaving a survivor entitled to an annuity.
After it is determined that an employee meets the minimum length of service required for retirement, any unused sick leave to the employee’s credit is converted to years, months, and days on the basis of a 260–day work year and added to the employee’s total service time. (See 562.5.) The employee’s high–3 average pay is then determined and annuity is computed.
Credit for unused sick leave is allowable only for annuity purposes. It is not allowable for other purposes in which service creditable for retirement is used as a criterion, such as leave or job retention.
Total service on which an annuity is based, including periods of military service and unused sick leave, is counted in full years and months. Any fractional part of a month is not counted.
