Are you Retired from Active Duty (drawing a pension) and have one of these? Then it’s time to earn your Military Service Credit Deposit PhD!
Are you a Federal Employee drawing retired pay from Active Duty Military service? Think there is no way to to receive additional FERS retirement credit for your Active Duty Military service (Military Service Credit), since you are already drawing Active Duty retired pay? Think again- there is a path to have your cake and eat it, too.
Why should you do this?
First, you can obtain additional Fed ‘seniority’ credit for accruing Annual Leave. Annual Leave is valuable because:
(a) It’s paid vacation time and
(b) Upon retiring or resigning from federal service you can sell Annual Leave back “one for one” and get paid for each unused Annual Leave hour at your hourly rate. Continue reading
A few news nuggets from over the weekend regarding FERS benefits might seem unrelated to each other on the surface, but I believe they are all correlated.
First, a summary of the attacks on FERS: Continue reading
(Post updated 3/29/2013 based on comments from GubMints reader Brad- see Comments)
I’ve received many direct and search inquiries regarding how to perform a Military Service Credit Deposit- So with much fanfare, here is the
GubMints Comprehensive Military Service Credit Deposit Guide
Note: This entire guide assumes:
1) You are covered under FERS, not CSRS’ and
2) All of your Military Service took place after 1956.
(both reasonable assumptions).
If you go to the OPM website, here’s the terse guidance they provide on how to perform a Military Service Credit Deposit:
FERS Military Service Credit Deposit
Military Service Credit for Military Service performed after 1956-
To receive FERS credit for military service performed after 1956, you must pay a deposit. The amount of the deposit is:
Dates of Service Amount of Deposit Due
Through 12/31/98 3% of military basic pay
1/1/99 through 12/31/99 3.25% of military basic pay
1/1/00 through 12/31/00 3.4% of military basic pay
1/1/01 to the present 3% of military basic pay
You must make the deposit payment for your post-1956 military service before you stop working for the government. It is paid to your employing agency. You should ask your local servicing personnel center for help in determining whether to make this payment. They can provide personalized assistance because they have your employment records.
Sounds pretty simple, doesn’t it?
Well, there’s more to it than that. Here’s the Gouge / Dirty Purples / Poop Sheet on Military Service Credit Deposit:
The TSP just released a 3rd party study conducted by Hewitt EnnisKnupp to review the product offering of funds within the TSP.
I’m on record stating that I like the low fees and simplicity of the TSP, but I’ve always been an advocate for more TSP investment choices like REITs, foreign bonds, and commodities to provide complete diversification within the TSP. I would be OK with having these items available as either TSP index funds (with a ‘Letter’ assigned to each new fund) or as options within a self-directed (brokerage) TSP option.
Unfortunately, after reading through the full report, I’m not convinced this was truly an ‘independent’ review- most of the Hewitt findings parrot the TSP’s mission statement and report findings such as: Continue reading