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How to Increase Your Annuity & Updates

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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 [2] Number 11 – 103. The current FERS Application (SF-3108) [3] 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 [4] for additional information on this subject and if you are a veteran explore your military credit [5] options.


Learn more about your benefits [14]employment [15], travel [16], and financial planning issues [17] on our site and visit our Blog frequently at https://fedretire.net [18] to read all forum articles.

Request a Retirement Benefits Summary Analysis [19] and receive a personal retirement analysis. A sample analysis [20] is available for your review. This service is provided by independent agents that are not affiliated with www.federalretirement.net [21] or Bookhaven Press LLC.

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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.

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