Answering listener questions about Medicare Advantage and retirement. Listen to the Full Episode: Enjoy the show? Use the Links Below to Subscribe:Read More
Simply put, the Creditable Service is the amount of time a federal employee has worked for the federal government that counts towards their retirement, or FERS. Specifically, this is the sum of the years, months, and days of all civilian time, “bought-back” military time, and any unused sick leave rounded DOWN to the nearest month. Note that unused sick leave doesn’t count towards a person’s eligibility to retire, but it does increase the pension received.
The amount of Creditable Service doesn’t always line up exactly with someone’s Service Computation Date (SCD). The SCD is only used for calculating leave, while someone’s Retirement Service Computation Date (RSCD) is s what OPM uses to compute an employee’s Creditable Service. An estimate of the RSCD can be found on a Personal Statement of Benefits, since OPM will only calculate a federal employee’s official RSCD until AFTER they have retired. The SCD and the RSCD can be the same, but a lot of times they aren’t.
Typically each day of full or part-time service worked is counted as a day of Creditable Service, as long as the employee is contributing to their FERS retirement. Additionally, unused sick leave will count towards increasing the pension amount. There are also exceptions to this rule that would NOT count towards someone’s Creditable Service, including:
Yes, it will count if it is “bought back,” which means a deposit was paid for military service performed after 1956. The following chart from OPM’s website describes how much is required to buy back your military time and have it count towards FERS:
Dates of Service Amount of Deposit Due Through 12/31/98 3% of military basic pay 01/01/99 through 12/31/99 3.25% of military basic pay 01/01/00 through 12/31/00 3.4% of military basic pay 01/01/01 to the present 3% of military basic pay
In order to have military time count towards FERS, the deposit payment must be made out to the specific agency before retirement.
As estimate of creditable service can be found by subtracting the current date from the estimated RSCD found on the Personal Statement of Benefits. Again, this is only an estimate, and the official RSCD will be calculated by OPM only after retirement. OPM will review the SF-50s that a federal employee has post retirement to calculate their RSCD and Creditable Service. An employee who is trying to calculate their own creditable service would start by reviewing every SF-50 they had to count up the years, months, and days of service. Under Box 30 on the SF-50, if FERS and FICA is checked, that would mean the time worked qualified for Creditable Service. If it says FICA only, it may not count towards retirement!
Before our clients retire, we recommend that they all download all of the files they have in their Electronic Official Personnel File (EOPF). Once retired, federal employees no longer have access to their EOPF, so it’s important that they have a copy of all of their information. This is especially true for all of their SF-50s, since the SF-50 is the only official form that OPM uses to verify a federal employee’s Creditable Service for retirement. If there ever is an issue with what OPM calculates for Creditable Service, it would be handy to have this info saved so it can be disputed if there is a discrepancy. We’ve seen this happen too many times before where OPM calculates the wrong amount of Creditable Service, and our clients were able to go back and have this changed.
Another file we recommend our clients get a copy of before they retire is a Certified Summary of Federal Service, found inside the SF-3107. This form will be used to “check your work” so that the amount of Creditable Service a federal employee calculates from their SF-50s will match what HR will calculate when they go through the OPF of that employee.
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Get the most out of your federal retirement benefits by taking advantage of the FERS resources created by Micah Shilanski, CFP®, and the team of independent financial advisors at Shilanski & Associates, Inc. Join the thousands of federal employees who trust us to guide them in their retirement planning journey because of our unique perspective of how your FERS benefits contribute to your comprehensive financial plan.
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