What is Your FERS Military Deposit Worth in Retirement?

Jul 13, 2018

depositHaving active duty military service and an honorable discharge may help you receive more money each month and reduce the number of years you must work to become eligible for retirement.

How to Increase Your FERS Pension with Military Service

A provision in the Federal Employees Retirement System allows you to make a deposit, or “buy back”, your active duty military service and that time will count towards your FERS retirement. Creditable service is used to determine when you can retire and to calculate how much your monthly pension will be. Military service with a deposit counts as though you worked under FERS during that time—years, months, and even days are added to creditable service.

How Much is the Deposit?

The deposit is calculated based on 3% of your basic military pay, plus interest. If you pay your deposit within the first 3 years as a FERS employee, you won’t owe any interest on the deposit. However, if you’re past the 3-year mark, interest on the deposit builds each day you delay paying it.

How Much More Do You Get?

For each year of military service you “buy back”, your pension will increase by 1% of your High 3 salary under FERS, and even more if you’re at least 62 with 20 years of service at retirement (1.1%).

Here’s an example:

If you’re a FERS employee and retire at age 60 with 20 years of service, plus you buy back 4 years of military service, and you have a High 3 salary of $60,000, you will receive an additional $2,400 a year. So, in 10 years, that’s an extra $24,000; 20 years, $48,000; and 30 years, $72,000! That’s worth the buyback in this scenario.

Who Can Make a Deposit?

Any current FERS employee who has active duty military service with an honorable discharge—including reservists with active duty periods.


If you’re receiving or will receive, an active duty military pension, it’s generally not advantageous to buyback military time. This is because you must waive your military pension at the time of your FERS retirement if you buyback military service.

Reservist retirements don’t follow this rule.

How to Make a Deposit

Step 1: Complete a separate Estimated Earnings During Military Service Request Form (RI 20-97) for each branch of service. Attach your DD-214 and send to the appropriate military finance center.

Step 2: After the military finance center receives your estimated military earnings form, complete the Application to Make Service Credit Payment (SF 3108). Return all documents to your human resource office. That office will calculate the cost of the deposit and you’ll receive a Military Service Deposit Estimate. You can either pay with a one-time lump sum payment or have automatic deductions from your pay each pay period.

Remember, you don’t have to make any deposit; it’s your choice. And be sure to keep ALL documentation. You’ll receive a final receipt once you’ve completed all payments. This is proof you’ve made the deposit.

Buying back military service can be very advantageous to your FERS retirement so long as you follow these rules.

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