COMDTINST 12831.1
24 JUL 1987
3.d. Post-1956 military deposits are made directly to the servicing civilian personnel office. The
deposit amount is 7 percent of base military pay for the period, plus interest. Interest is computed
at a variable rate. Interest began on 1 October 1985, or 2 years after the employee was first hired
in a position subject to CSRS, whichever is later. However, since Office of Personnel
Management's (OPM) method of computing the deposit calls for adding interest only at the end of
the year after it begins, no interest is charged if the deposit was paid in full by 30 September 1986,
or within 3 years after first coming under CSRS, if later.
4.
DEPOSIT REQUIREMENTS UNDER FERS. The following categories of employees are
subject to the FERS rules on military deposits:
a.
Employees who are automatically subject to FERS on 1 January 1987;
b.
Employees who are automatically covered by FERS upon reentering after 1 January 1987;
and
c.
Employees who elect FERS coverage sometime after 30 June 1987, if they have less than
5 years of civilian service (not counting any civilian service covered simultaneously by
both Social Security and CSRS after 31 December 1983) before the effective date of the
election. For example, if an employee who had 4 years of civilian service separated in
1981, was rehired in August 1984 under CSRS and Social Security, and transferred to
FERS in July 1987, the employee's military service would be treated under FERS rules.
This is because the employee had less than 5 years of civilian service which was not under
CSRS and Social Security when the employee elected FERS coverage. Employees in
these categories pay a deposit of 3 percent (instead of 7 percent) of base military pay and
are not distinguished from those who became subject to CSRS before 1 October 1982.
Also, military service cannot be credited unless the deposit is completed before
retirement.
5.
EMPLOYEES SUBJECT TO CSRS DEPOSIT RULES WHO CONVERT TO FERS.
Employees not subject to FERS deposit rules for military service remain subject to the CSRS
rules. For these employees the deposit is 7 percent and the interest-free period is unchanged.
Also, those first hired subject to CSRS on and after 1 October 1982, are distinguished from
those who became subject to CSRS earlier, as explained in paragraph 3.c above. Employees
who convert to FERS (other than those described in paragraph 3.c. above) continue to be
under the CSRS rules for military deposits, as well as CSRS for annuity computation rules.
6.
REFUNDS OF MILITARY SERVICE DEPOSITS. If an employee subject to FERS deposit
rules has already made a deposit under CSRS rules, a refund is payable beginning in 1987.
The refund will be the difference between the 7 percent deposit and the 3 percent deposit. The
OPM will provide the necessary processing forms and instruction to implement the refund
provisions.
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