by clicking on the page. A slider will appear, allowing you to adjust your zoom level. Return to the original size by clicking on the page again.
the page around when zoomed in by dragging it.
the zoom using the slider on the top right.
by clicking on the zoomed-in page.
by entering text in the search field and click on "In This Issue" or "All Issues" to search the current issue or the archive of back issues respectively.
by clicking on thumbnails to select pages, and then press the print button.
this publication and page.
displays a table of sections with thumbnails and descriptions.
displays thumbnails of every page in the issue. Click on a page to jump.
allows you to browse through every available issue.
Federal Employees News Digest : May 6, 2013
May 6, 2013 Vol. 62, No. 40 7 Visit us on the Internet at www.FederalDaily.com Adeposit is an optional payment made by an employee to the CSRS or FERS retirement system that may affect the employee's retirement eligibil- ity date and the calculation of the employee's CSRS or FERS annuity. There are two types of deposits: (1) civilian deposit for federal service in which an employee when previously employed did not con- tribute to either CSRS or FERS, such as a temporary appointment; and (2) military deposit for prior or current military service. This week's and next week's columns will discuss civilian deposits. An employee's decision to pay or not to pay a civil- ian deposit depends on: (1) how much is owed for the deposit; and (2) the effect on the employee's retirement if a deposit is not made; in particular, on the employee's retirement eligibility date and on the calculation of the employee's CSRS or FERS annuity. Before discussing the specifics of a CSRS or FERS deposit, it is important to review the types of temporary service for which a CSRS employee and a FERS employee can make a deposit. If an employee thinks they can make a deposit for prior service, then they should con- tact their human resources benefits specialist. CSRS and FERS deposits may be made for federal service that was not covered by a retirement deduction via payroll deduction, some- times called "non-deduction" service. Examples of such service are a temporary appointment, a summer job with a federal agency, "when actually employed" (WAE) service, and casual service with the Postal Service. Under FERS, a deposit can only be made for temporary service occurring before Jan. 1, 1989. Non-covered service performed after Dec. 31, 1988, is not creditable under FERS. A FERS employee may make a deposit for refunded CSRS contributions if the prior CSRS- covered service is now credited as FERS. This generally applies to refunds of CSRS contributions for less than five years of service. How much is owed? The table below summarizes what is owed for non-deduction service performed by a CSRS or CSRS-Offset employee or by a "TransFERS" employee who can make a deposit for the CSRS component of their retirement, and what FERS employees owe for a deposit for non-deduction service performed before Jan. 1, 1989. The next table summarizes the variable interest rates by year, starting in 1985 and through 2013. Unless there is a specific statutory provision to the con- trary, inter- est is com- puted on the deposit from the midpoint of each period of non-deduction service. To avoid addi- tional interest charges on a civilian service credit account balance, pay- ments must be received by the OPM official or agent authorized to receive service credit payments by the close of business on the last business day of the calendar year. A deposit may be paid in installments. But interest charges will continue to accrue on the unpaid deposit balance. Payments are posted to the individual's account as of the day they are received by OPM. To receive federal service credit for a deposit, an employee must make a full deposit - this includes all interest charges - no later by the employee's retirement date. Employees do not receive credit for partial deposits. The next "Informed Investor" column will discuss whether it makes financial sense for an employee to make a deposit for non- deduction service. Edward A. Zurndorfer is a Certified Financial Planner and Enrolled Agent in Silver Spring, MD. He is also a registered representative with FSC Securities Corporation, branch address: 833 Bromley St. - Suite A, Silver Spring, MD 20902. Phone: (301) 681-1652. Securities offered through FSC Securities Corporation,member FINRA/SIPC. EZ Accounting and Financial Services and FSC are independent companies. Informed Investor Eligible employees should make deposits: Part I Interest Rates -“Non-deduction” Service Deposits year Interest Rate (%) year Interest Rate (%) 1985 13.00 2000 5.875 1986 11.125 2001 6.375 1987 9.00 2002 5.50 1988 8.357 2003 5.00 1989 9.125 2004 3.875 1990 8.75 2005 4.375 1991 8.625 2006 4.125 1992 8.125 2007 4.875 1993 7.125 2008 4.75 1994 6.25 2009 3.875 1995 7.00 2010 3.875 1996 6.875 2011 2.75 1997 6.875 2012 2.25 1998 6.75 2013 1.625 1999 5.75 Retirement System amount of Retirement Deposit Interest Charges CSRS, CSRS-Offset, CSRS Component of TransFERS 7 percent of the base pay earned during the non-deduction service (6.5 percent if service performed between 11/1/1956, and 12/31/1969). Service performed through 12/31/1984 charged 3 percent interest (accrued daily and compounded annually). After Dec. 31, 1984, variable interest rate (see table above). FERS For service performed prior to 1/1/1989 not covered by retirement contributions and for service covered by refunded contributions that is now creditable under FERS, 1.3 percent of the base pay earned during the period for which the deposit is made. The 1.3 percent rate applies no matter when the service was performed. For service performed between 10/1/1982 and 12/31/1984, interest charge of 3 percent accrued daily and compounded annually. After 12/31/1984, interest is at a variable rate (see table above).
April 29, 2013
May 13, 2013