I developed the eBook based on personal experience, research, and input from readers here at GubMints.com.
Some 30 percent of Federal Employees are Veterans, and Veterans receive additional Federal Service Credit depending on their military retired status and time in military service. This enhances your federal ‘seniority’- what Uncle Sam refers to as your Service Computation Date. Maximizing your federal Service Computation Date is critical, as mistakes can cost you thousands of dollars in:
Your future FERS Annuity Payout.
Annual Leave Accrual.
This GubMints Gouge Book will give you the tools you need to maximize your Service Computation Date, including sample forms, actual correspondence to and from Defense Finance Accounting Service (DFAS), plus a FREE calculation spreadsheet to help you determine the potential value of your Military Service Credit Deposit.
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 →
(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 DepositMilitary 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:
Do you have too Much Life Insurance for your… ‘Survivors’?
When was the last time you heard that advertised during your favorite cable news program? I’ll bet you a paycheck that nobody has ever run this advertisement during a commercial break from the news . Most of the ads tout Reverse Mortgages, Mesothelioma, Walk-In Bathtubs, and GOOOOOOOOOOOOOLD!
Even worse, do a web search for “OPM Federal Employee Life Insurance Benefit” and you’re directed to adverts for FEGLI or Life Insurance Salesmen, thinly-disguised as ‘benefits counselors’.
Sorry, back to my regularly scheduled blog.
If you’re a Federal Employee with a few years’ worth of tenure, you’ve already got a lump sum Life Insurance benefit worth ~$75K, plus a possibe a life annuity for your survivors (depending on your time in service). This is a FERS policy that covers you while you are in the employ of the Federal Government, and it DOES NOT require a fatality to take place on the job or in the workplace (i.e. you don’t need to be a Smoke Jumper for the Forest Service who parachutes directly in to a wood chipper- Your demise could take place away from the workplace and/or outside of working hours as long it is not judged to be ‘misconduct’).
Here’s how to calculate your ‘gratis’ Federal Employee Life Insurance benefit provided by FERS. While not advertised, the Government actually provides you with Life Insurance benefits in ADDITION to what is offered to you for purchase through FEGLI. This ‘gratis’ FERS Life Insurance benefit includes:
Most agencies pay an optional “Death Gratuity Payment” of $10K upon death of an employee (see FERS Handbook ch 70, page 75).
In addition, FERS Life Insurance Pays your surviving beneficiaries:
(Employees w/ 18 mo. to 10 yrs of CIVILIAN service):
Lump sum payment of $29K, PLUS
Lump sum of GREATER of (a) 50% salary or (b) 50% x High-3 Average Salary.
(Employees w/ > 10 years CIVILIAN service):
The two-part benefit listed above, PLUS
50% of what your FERS annuity would be based on your years of service (i.e. years of service x ‘High-3’ Average Salary x 50%).
Know this:
The above benefit goes away when you retire or resign from Federal Employment- Benefits for survivors in retirement are covered by your applicable FERS annuity/FERS survivor annuity.
Action Plan for you and your Survivors (“Eye of the Tiger, Rocky. Eye of the Tiger”):
Check your Service Computation Date (SCD Civilian) to verify which FERS Life Insurance Formula above applies to you.
Now that you know your FERS Life Insurance benefit, subtract this value from whatever you have determined to be your ‘Top Line’ dollar requirement for Life Insurance coverage. If the FERS Life Insurance benefit calculation above appears to be a Windfall, consider reducing your 3rd-party Life Insurance Coverage.
Shop your 3rd-party supplemental life insurance policy with a reputable outfit like FEGLI, USAA, or Navy Mutual Aid Association.
Life/Estate Planning- Make sure you have current Beneficiary designations (i.e. Spouse PRIMARY, ‘All my Children’ CONTINGENCY) on the following forms:
SF 3102, FERS retirement (also covers death while in-service)
SF 2823 - FEGLI (if participating in FEGLI).
TSP-3 - TSP Beneficiary designation.
SF 1152 - Unpaid Compensation (Lump sum Payout of Annual Leave and Unpaid Salary upon death in-service).
