Commandant
2100 Second Street, S.W.
United States Coast Guard
Washington, DC 20593-0001
(202) 267-1706
COMDTINST 12831.1
24 JUL 1987
COMMANDANT INSTRUCTION 12831.1
Subj: Military Service Deposits for Retirement
1.
PURPOSE. This Instruction provides information on the provisions of the Federal
Employees' Retirement System (FERS) concerning deposits for military service performed
after 1956.
2.
DISCUSSION. Employees who are automatically covered by FERS beginning 1 January
1987, have a new interest-free period. The required deposit is 3 percent of military pay plus
interest, as compared to 7 percent plus interest for employees under Civil Service Retirement
System (CSRS) rules.
3.
DEPOSIT REQUIREMENT UNDER CSRS.
a.
Under CSRS, military service is generally creditable. However, most military retirees are
barred from receiving credit toward CSRS annuity unless they waive their military
retirement pay. (See FPM Supplement 831-1, subchapter S3-5 a.(1), available in your
servicing civilian personnel office, for exceptions.)
b.
Beginning in 1957, military service became subject to Social Security, and treatment of
military service under CSRS depends on whether it was performed after 31 December
1956. A 1982 civil service law change also distinguishes between pre-1 October 1982
hires, and those employees who first become subject to CSRS on or after that date.
c.
Employees first hired in positions subject to CSRS after 30 September 1982, can receive
post-1956 military service credit only if they make a deposit covering the service.
Employees hired in positions subject to CSRS before 1 October 1982, can receive credit
for post-1956 military service without making the deposit. They will be subject to
elimination of this service credit if they become eligible (or would be eligible upon proper
application) for Social Security old-age benefits at age 62. This group of employees can
avoid the age 62 recomputation (or lowered computation of the initial rate, if retiring
later) only if they make the deposit.