Posted on Tuesday, 29th March 2011 by

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Robert worked for the Federal government for 4 years under FERS. He resigned in 1995 and withdrew his FERS retirement contributions and then returned to government in 1998. He now holds a career position and was not sure if he could obtain credit for his prior service that he withdrew in 1995. We receive many questions about the redeposit process and eligibility. Significant changes to the redeposit process were enacted in 2009 under the National Defense Authorization Act (NDAA), Public Law 111-84. The provisions of section 1904 of the NDAA only apply to employees covered under FERS on or after October 28, 2009.

Prior to enactment of the NDAA, FERS employees who separated from Federal service and were refunded their retirement deductions permanently forfeited all retirement credit for the service covered by the refund.  Section 1904 of the NDAA now permits individuals who are subsequently reemployed to make a redeposit of the amount refunded, plus interest, and to have credit for the service reinstated.

OPM issued updated guidance on 2/25/2011 in their Benefits Administration Letter Number 11 – 103. The current FERS Application (SF-3108) is now being accepted to make a redeposit. Employees must indicate on the application that the period of service was refunded and send the completed application through their agency for certification.

Don’t submit a payment with the application. If a payment is sent to OPM before the service credit account is established, OPM will not be able to identify where to apply the payment. As soon as the Service Credit office processes the application, a bill and instructions for making payments will be sent to the employee.

Buying back your previously refunded federal service time will increase your annuity for life. The sooner you make the repayments the less you will have to pay in interest and for each year you buy back, your annuity will increase another 1 to 1.1% of your average high three salary in retirement. If your high three average salary was $50,000, and the calculation is 1% additional per year of service, your annuity would increase $500 a year. With 10 years restored service your annuity would increase $5,000 a year in this example!  Some only look at the annual increase and say why bother for $500 to $1000 a year when I have to pay so much back. You have to factor in the years you estimate you will collect which can be up to 30 years or more. Visit our FERS Annuity page for additional information on this subject and if you are a veteran explore your military credit options.


  • TSP – FERS employees can dramatically increase their total retirement income by contributing at least 5% to their THRIFT plan to obtain a full match from Uncle Sam. It pays to put as much into the TSP as possible to increase your potential income in retirement. The closer to retirement the more conservative you need to be with your investment mix. I personally kept most of my TSP in the G and L2010 funds the last five years of employment to preserve capital.
  • COLA for 2012! – A small 2012 COLA is expected next year, the first since 2009.  AARP reports that as much as 75 percent of the COLA increase will be used to pay for higher Medicare premiums next year.  Retirees must economize in retirement to maintain their standard of living. It is best to learn how to live on less while you are still working and I devised a plan that worked for me the last ten years I was employed. The process allowed me to pay off my mortgage while I was working so that I would have more disposable income in retirement. It is a painless process and worth reviewing now that retirees must ultimately live on less.  If your mortgage is already paid off the process will simply help you save more for retirement.
  • Correction – I received a number of messages concerning my last article where I talked about the SF-50 and military buyback time. I incorrectly stated that your military deposit is annotated on your retirement SF-50. I meant to say that your military deposit is often listed on your Leave and Earnings Statement and to keep a copy of your last Leave and earnings statement with your retirement paperwork when you retire. It can be used to verify that your deposit was made. I also stated that I received my retirement personnel action (SF-50) on my last day of employment and that you typically receive this document several weeks after submitting your retirement paperwork. Several personnel specialists reported that their agency typically sends out the retirement SF-50 after the retirement date.
  • More Job Listings – We received more new job postings in March and as before many are from federal agencies and private sector companies looking for talented federal retiree’s.   The United States Graduate School posted several new  diverse instructor positions to teach scheduled classes at their facilities around the country and in Washington.  Visit our Jobs Board often to check on new listings.
  • March Travel Article – If you ever dreamed about visiting Greece and exploring the Greek islands you will enjoy Nancy Holston’s new article titled A Greek Holiday.

Learn more about your benefitsemployment, travel, and financial planning issues on our site and visit our Blog frequently at to read all forum articles.

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The information provided may not cover all aspect of unique or special circumstances, federal regulations, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our articles are not intended nor should they be considered investment advice. Our reply is time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change.

Last 5 posts by Dennis Damp


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