Federal Agency Outlines Military Deposits Process
By Army Sgt. 1st Class Tyrone C. Marshall Jr.
American Forces Press Service
WASHINGTON, Jan. 16, 2014 The U.S. Office of Personnel Management conducted a webcast today to explain the process of applying military service time toward civil service retirement.
“In order for the [military] service to be creditable, you have to make a deposit,” said OPM’s Karen McManus “The deposit has to be made on service that was performed after 1956. Before 1956, they can just get credit for it.”
McManussaid key to the process is the DD-214 form, a military service record document, which is used to determine status and eligibility.
“You’ve got to go to that DD-214 and figure out beginning dates and ending dates,” she said. “You’re giving them total years, months and days. The other thing that you’re using the DD-214 for is to determine the periods of military service.”
There can be more than one DD-214, McManus said, and more than one period of service as long as there is a break of at least one day.
“If they have a break of one day, they have more than one military period, and they’ll pay a deposit for each of their periods of military service,” she noted.
While examining the DD-214, McManus said the issue of whether military service is creditable is a necessary step in the process.
“The first thing before you even start talking about a deposit is you have to start talking about the creditability of the military service,” she said.
“So what happens here is you have an employee and they’re either under the [Civilian Service Retirement System] or the [Federal Employees Retirement System],” McManus said. “And they have prior military service or they have military service that interrupts their federal career.
“In either case, they would like to make a deposit so that that service can also be creditable in their CSRS or FERS annuity,” she added.
McManus emphasized the employee’s agency will play a large role in assisting with the military deposit process.
“They’re going to get a copy of their service record and bring it to their agency,” she said, “and this is where the agency is going to start.”
McManus added, “They’re going to look at that military service record, and they’re going to try to figure out, based on looking at that DD-214, ‘here’s where we’re starting – is that service creditable?’”
What the agency is looking for, McManus said, is if the service is active and if it’s honorable, as well as the beginning and ending dates of service.
“If the employee has an honorable discharge that’s a good place to start,” she said. “That’s looking good -- they’re probably going to get credit for this service.”
“But if the discharge on that DD-214 has any of these other things written there – dishonorable discharge, clemency discharge, neutral uncharacterized discharge, officer dismissal -- it starts raising questions and they’re probably not going to be creditable,” McManus said.
McManus ensured the audience was clear that this portion of the process is legally mandated.
“I think it’s important to note this is not a policy decision on the part of the retirement service; this is the law,” she stated. “The law says that in order to get credit for service, it has to be honorable.”
“The person in those situations has to go back to the military and ask for a different discharge,” McManus said. “They have to get that honorable discharge on the DD-214 in order for us to give them credit for that service.”
The other important aspect of the DD-214, she said, is determining how the service is characterized on the DD-214 since there are two types == Title 10, federal service, and Title 32, working for the state.
“So when you pick up a DD-214 and it says Title 10, you’re probably going to get credit for that service,” McManus said. “You’re going to check all these boxes, but that’s really a good indicator.”
“When it’s Title 32, now you have to stop and take a look at the service,” she said. “Title 32 service is only creditable if it’s performed under [Uniformed Services Employment and Reemployment Rights Act] and it interrupts someone’s federal career. If it doesn’t do that, it’s not creditable.”
McManus also explained how much a military deposit would cost an employee based on what system they are operating in.
“We have to get their total earnings from the military,” she said. “If they’re under CSRS, the deposit amount is seven percent, and if they’re FERS, their deposit amount is three percent. So that’s what we’re basing the deposit on.”
McManus also noted Congress adjusts these rates from time to time, as they did from 1999 to 2001, and as a result, those individuals will be charged a higher amount.
It is also really important, she said, knowing who is eligible to make a deposit.
“The person has to be under deductions,” McManus said. “They have to be under CSRS or FERS, or CSRS offset.
”Can a retiree make a military deposit?” she continued. “No, because they’re not under deductions right? Military deposits must be paid to the agency. Its structured way in the law; it’s been that way since 1956. It’s still that way today.”
McManus also stressed that as an employee, everyone must work through their personnel offices to pay their military deposits.
“You cannot go through OPM,” she said. “We do not accept deposit payments; we do not calculate the payments. That’s why your first step is to always go to your agency, and your agency will be doing everything.”
This includes survivors of a deceased employee, said McManus, noting they will still have to make the military deposit in the same manner that the employee would.
“The survivor can go ahead and make a military deposit as long as their entitled to a survivor annuity,” she said.
McManus also explained who should make a military deposit based on their age and date they were hired.
“If you are under CSRS and you were hired before [Oct. 1, 1982], then you can [elect to] not make your military deposit if you retire before the age of 62 and use that service in the computation of your CSRS annuity,” she said.
“However, if at the age of 62, you’re eligible for social security, we will remove the military deposit from your CSRS calculation,” McManus said, “and you will not have an opportunity at that point to pay your military deposit, because you’re an annuitant now.”
So this is a decision that has to be made before the person separates, she said, noting if an employee was hired after Oct. 1, 1982, even under FERS, they don’t have an option.
“You either pay it and get credit, or don’t pay it and don’t get credit,” she said.
(Follow Sgt. 1st Class Tyrone Marshall on Twitter: @MarshallAFPS)