Allow Feds to Buy Credit Toward Their Retirement

Those who truly know federal service understand that working for the government is not just another job. You apply yourself to hard work, day after day.

You climb a little higher, maybe your pay increases a bit and you face different challenges. You manage the challenges because you know the mission is important above all else. You know after the decades of hard work that you put in, your service will be rewarded and the government will have your back. But what if you go into your Human Resources office to discuss retirement and they tell you that instead of having 18 months until retirement as you thought, you actually have four years until you can retire with expected benefits?

You may ask, “How is this possible, and am I the only one to whom this has happened?” Not only is it a possibility for feds, but it is a problem many federal employees are encountering as they get closer to retirement. Currently, a Federal Employee Retirement System (FERS) employee may make a deposit for non-deduction service performed before January 1, 1989, and receive credit toward his or her annuity computation; however, non-deduction service performed on or after January 1, 1989, generally is not creditable under FERS for any purpose. So this means that FERS employees who were put on intermittent or temporary time are unable to buy back that time towards their retirement. Many federal employees were on intermittent or temporary time, and they did not realize they would be temporary for months or even years, with none of that time credited towards their retirement.

Under the Civil Service Retirement System (CSRS), non-deduction civilian service performed after September 30, 1982, is creditable for retirement annuity computation purposes, other than average salary, if the employee pays a deposit for that service. Service on or before September 30, 1982, is creditable for annuity computation without a deposit; however, ten percent of the deposit owed will be permanently deducted from the annual annuity. FMA has been working to push legislation that would allow FERS employees a similar option. We thank Congressmen Derek Kilmer (D-WA) and Walter Jones (R-NC) who introduced bipartisan legislation, the Federal Retirement Fairness Act (H.R. 5389), which would do just that.

The legislation would allow feds to buy back years served as temporary or intermittent employees to credit toward their retirement. The employee would be responsible for their share, plus interest, in addition to the government’s share of the contribution. While the cost to the employee may seem high, it provides an option not currently available. The government’s costs will be minimal and should make the bill attractive to members of Congress. The Congressional Budget Office has not yet estimated the potential cost of this legislation.

Federal employees we have spoken to understand the high cost associated on their end, but they welcome the opportunity to buy back this time and be rewarded for their years of hard work. FMA will continue to work with Mr. Kilmer and Mr. Jones to get H.R. 5389 passed in the House and work to get companion legislation introduced in the Senate and signed into law.

The views reflected in this column are those of FMA and do not necessarily represent the views of FEDmanager. To learn more about the Federal Managers Association (FMA), visit their website: FedManagers.org.