Table of Contents
- Can I collect military retirement and civil service pay?
- Civil Service Retirement and the Federal Employee Retirement System
- Does military service count towards civil service retirement?
- Military Buy Back Rule for Federal Retirement
- Buying Back Your Military Service Backdates Your Service Computation Dates
- Can I get FERS and Military Retirement?
- National Guard or Reserve Retirement with FERS
- Should I buy back my military service?
- Reader Question About Buying Back Military Service Credits
Many military veterans are drawn to federal service in their post-military careers. This opportunity allows veterans to continue serving their country, apply the valuable skills they acquired in the military, and secure financial stability for themselves and their families.
However, transitioning into and retiring from the civil sector requires new rules and knowledge. To maximize your benefits, you should understand how your civil service pension coincides with your military retirement pay.
Can I collect military retirement and civil service pay?
Yes, military retirees are eligible to work in civil service positions and receive both their military retirement pay and a salary from their civil service job. Unlike some other retirement systems, there is no offset or reduction in military retirement pay when you start receiving civil service pay. You are entitled to full benefits from both sources.
The same rule applies to those who served in the Reserves or National Guard and receive retirement pay based on points. You can receive your military retirement pay and work in a civil service job, earning a separate salary.
The most obvious benefit of this path is that after a full military career, you can augment your retirement pay with civil service income.
Federal compensation packages are excellent, including regular basic pay raises, a pension plan, health benefits, dental and vision insurance, and life insurance. Some agencies even help pay for student loans and offer other incentives, such as alternative work schedules and options to work at home.
The complications arise when determining how you want to handle your civil service retirement.
Civil Service Retirement and the Federal Employee Retirement System
If you begin a civil service career today, you’ll likely contribute to the Federal Employee Retirement System (FERS). FERS is separate from your military retirement and offers excellent benefits, including a pension, Social Security, and the Thrift Savings Plan (TSP).
FERS replaced the Civil Service Retirement System (CSRS) for employees who began their federal service after December 31, 1983. CSRS was a contributory retirement system that previously provided retirement, disability, and survivor benefits for most U.S. federal civil service employees and their families. When the FERS program came online, CSRS employees were given the option to switch to FERS.
Does military service count towards civil service retirement?
Yes, active military service can count as credit towards your civil service retirement*, but you must adhere to specific steps and conditions to take full advantage of this opportunity.
The process of making your military service count towards civil service retirement involves a “buy back” or making a deposit into FERS for the time you served in the military. This payment credits your active duty military service years towards your civil service retirement, increasing your FERS pension. Buying military service credits is a good option for many, but not all, veterans and military retirees.
*Periods of inactive military service, including AT and IDT, are not eligible for military service credits in the FERS system.
Military Buy Back Rule for Federal Retirement
To initiate the buy back process, you must complete specific forms and provide documentation of your military service, such as your DD Form 214, to your civil service human resources department. They will calculate the cost of buying back your military time, which is generally a percentage of the base pay you received while in the military.
The exact percentage varies depending on the dates of your military service:
| Year of Military Service | Buy Back Deposit (% of military pay) |
| 1957 – 1998 | 3% |
| 1999 | 3.25% |
| 2000 | 3.4% |
| 2001 – present | 3% |
It’s important to note that there is a deadline for completing the buy back process to receive full credit without accruing interest. Typically, you have three years from the start of your civil service employment to make this payment. After this period, interest may accumulate, increasing the cost of buying back your military time. FERS employees must buy back military service credits before retiring from the FERS system.
Buying Back Your Military Service Backdates Your Service Computation Dates
In addition to increasing your FERS pension, your military service credits also backdate two important service computation dates:
- Service Computation Date for Leave (SCD Leave): helps you to accrue annual leave more quickly than if you were starting your career without any service credits
- Service Computation Date for Reduction in Force (SCD RIF): increases your seniority date if a Reduction in Force causes layoffs.
Annual Leave accrues at the following rates:
| Years of Service | Annual Leave Accrued |
| 0 to 3 years | 4 hours per pay period |
| 3 to 15 years | 6 hours per pay period |
| More than 15 years | 8 hours per pay period |
Buying back your military service can take you to a higher SCD Leave threshold or accelerate your timeline to the next level.
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Can I get FERS and Military Retirement?
You can’t use the same period of active military service for both military and federal retirement unless you qualify for one of the exceptions listed below. This is known as double-dipping.
In other words, if you opt for a buy back to count your military service toward your federal retirement, you can’t “double dip” by receiving a military pension from the government for that same duration of military service.
You have two options when it comes to civil service retirement as a military retiree:
- Forfeit your military retirement pay and buy into the federal retirement plan
- Don’t buy back military service and start fresh with federal service with no credit for time served in the military
Retaining your military retirement means you start from year zero as a federal employee and begin building creditable civilian service toward federal retirement while maintaining your military pension.
Exceptions for Reserve Component and Certain Medical Retirees
Most military retirees are subject to the double-dipping policy and must waive their military pension to count their service towards FERS. However, there are some exceptions to this rule.
Military retirees may be granted an exception if they were awarded the retirement pay:
- Due to a service-connected disability either incurred in combat with an enemy of the United States or caused by an instrumentality of war and incurred in the line of duty during a period of war, or
- Under the provisions of Chapter 1223, Title 10, U.S.C. for those retiring from a reserve component of the Armed Forces.
In other words, traditional Guard and Reserve retirees who typically receive retirement pay at age 60 are an exception and can use their active military service toward both a military and FERS retirement.
Detailed information regarding creditable military service for retirement purposes is in the Federal Employees Retirement System Transfer Handbook on the Office of Personnel Management’s website.
National Guard or Reserve Retirement with FERS
Reserve Component (RC) members are eligible for three types of military retirement that can impact how their military retirement works with a FERS retirement:
- Active-Duty Retirement: 20 years (or more) of active duty
- Reserve/Guard Retirement: 20 years (or more) of combined active duty and RC military service (pay can be collected at age 60)
- Military Medical Retirement: due to a service-connected disability either incurred in combat with an enemy of the United States or caused by an instrumentality of war and incurred in the line of duty during a period of war.
In the first scenario, Active Guard Reserve (AGR) retirees receiving an active duty pension can only buy back their military time if they waive their military retirement pay. This is rarely a good option.
The second and third scenarios allow the RC retiree to “double-dip” and buy back their active military service and have it count toward a military and FERS retirement. These are the two exceptions covered by federal law. This is a great deal in almost every situation.
Should I buy back my military service?
Buying military service credits allows veterans to increase their FERS pension and backdate their Service Computation Dates for Leave and Reduction in Force calculations.
But it’s not always the best solution.
Let’s look at some common situations veterans encounter when they join the civil service and FERS system to help you understand the impact of buying back your military service credits.
1. Non-retired military veterans: There is no downside to buying back military service credits for this group.
2. Active duty retiree: Active-duty retirees must forfeit their active-duty military pension to buy back their military service credits. This is rarely worth it. However, they can still file their DD Form-214 with their human resources department. They may be eligible to earn military service credits that will backdate their SCD Leave and SCD RIF dates if they had qualifying service in a campaign or expedition for which a campaign badge has been authorized. This is a situation in which qualifying deployments can provide powerful benefits years later.
3. Reserve Component retiree: RC members should almost always buy back their military service credits. In many cases, Guard and Reserve members will still be serving in the RC when they join the civil service. In this case, you should immediately buy back your time to increase your FERS pension, begin accruing leave more quickly, and backdate your SCD RIF date.
4. Retirement due to a combat-related service-connected disability: These members should buy back their military service credits.
Note: It’s best to start the military service credit buy back as soon as you join the civil service. The Civil Service HR department may take some time to run the cost estimate, and you only have three years to buy back your military time without paying interest. Once three years have passed, you will pay interest on the remaining buy back amount.
You can pay for the service credits in a lump sum or through monthly payroll deductions.
Reader Question About Buying Back Military Service Credits
Let’s take a deeper look at how you can use your military service toward your civil service career with a real example from one of our readers.
The reader asks:
“I served 14 years of active duty and six years in the National Guard. I received my 20-year letter. I began working for the postal service and ‘bought back’ my 14 years of active duty towards my postal service retirement. For example, I have 12 years of actual time with the U.S. Postal Service but 26 years on the books due to the buy back option.
My question is, how does this affect my retirement through the National Guard when I reach age 60? Will I receive retirement pay for only my six years served in the National Guard or for the entire 20 years of military service?
I guess I am asking if it was ‘beneficial’ for me to buy back my military time. Do I lose the six years of National Guard time if I buy back my 14 years of active duty time? I am a little confused about what happens to the six years for National Guard time since the time spent in the Guard after the buy back would be less than 20 years.”
These are great questions on a very confusing issue.
Thankfully, I have great news for you! Your military service is eligible for dual credit because you qualify for a traditional National Guard retirement. You can’t use the same active military service to count toward both an active duty military pension (vesting immediately after 20+ years of active duty service) and a FERS pension.
However, your active military time can count toward both a Reserve Component pension and a FERS pension starting at age 60. You receive the credit for your entire 20 years of military service, and the 26 years you have in the books with the U.S. Postal Service.
Buying back your military service was a great financial move. Not only did you maintain your military pension and boost your FERS pension, but you also backdated your Service Computation Leave and RIF dates, helping you accrue annual leave more quickly and giving you more seniority in the event of a Reduction in Force Layoffs.
In this case, you get to have your cake and eat it too!
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Ricky L Lemons says
Can my spouse who is a 29 year CSRS civil service retiree receive any part of my Army military E7 retirement upon my death?
Ryan Guina says
Ricky, please read about the Survivor Benefit Plan, which provides a portion of a service member’s retirement pay to his or her survivors. Best wishes!
David kiser says
can you tell me how i can get my military retirement to count as federal retirement. I had to retire because of a injury. I did do 20 yrs but they made me retire cuz i couldnt do anything anymore
Dr. Lonny Wortham says
David,
Was it an active-duty retirement.
chris says
I just want to verify. I did 4 years AD and now in the national guard. I want to buy back my military time for my government job. Now if I buy back that 4 years, that 4 years will still be used towards my national guard retirement? So hypothetically if i never went on another deployment, I would have 16 years of how many points I made from drill and the 4 years of active duty, even though i did the buy back?
Justin Heil says
I will be drawing a Reserve retirement based on a mix of active duty and Reserve time. I bought back my active duty time towards FERS and will be applying for deferred retirement soon using Form R1 92-19. How do I fill out sections 4, 4a, 4b, and 4c? The questions are:
4. Are you receiving or have you ever applied for military retired or retainer pay (including disability retired pay)?
Yes, complete items 4a-4c.
No, go to section D.
4a. Was your military retired or retainer pay awarded for disability incurred in combat or caused by an instrumentality of war and incurred in the line of duty during a period of war?
Yes, if available, attach a copy of notice of award.
No.
4b. Was your military retired or retainer pay awarded for Reserve service under Chapter 1223, Title 10, U.S. Code?
Yes, if available, please attach a copy of notice of award.
No.
4c. Are you waiving your military retired pay in order to receive credit for FERS?
Yes, see instruction for information about how to request a waiver.
Yes, a copy of my waiver is attached.
No
I assume that I would answer
4. Yes
4a. No
4b. Yes
I don’t know the proper answer for 4c, since I don’t want to waive my military reserve retired pay, and do want to receive credit for FERS.
Thank You! Justin
Dip says
1. I am interested in the answer to this very question!!
2. Doug…thanks very much for you help to this community.
Doug Nordman says
You’re welcome, Dip, I’m glad it’s helping! I’m paying it forward.
Justin Heil says
Thanks Doug!
I have already applied for a Reserve Pension, and will apply for a deferred FERS pension. Both would start paying when I hit age 60 this summer.
Therefore, would I check as follows, and include my Reserve Retirement Authorization letter:
4. Yes
4a. No
4b. Yes
4c. No
or could I just check No for 4. and move on?
Thanks again!
Justin
Doug Nordman says
If you’ve already applied for your Reserve pension then, as you’ve written, you could answer “Yes” to questions 4 and 4b and “No” to 4a & 4c.
I’m not sure what HR or OPM mean by “notice of award”, but you could include copies of your Notice Of Eligibility, your latest DD-2656, and whatever correspondence you’ve received back from your Reserve HQ.
Doug Nordman says
Justin, you might be overthinking the answers, but I can help parse the vocabulary.
If you’ve retired from the Reserves or Guard and you are not yet receiving that pension, then you’re technically “retired awaiting pay.” When you’re 9-12 months away from the start date of your pension (age 60 for most) then you apply (all over again on DD Form 2656) for your Reserve pension.
I think Q4 is asking whether you’re currently receiving your pension, not whether you’re retired awaiting pay. You’d answer “No” for your situation, skip 4a-4c, and move on to section D.
Even if you were receiving a pension, Q4a is checking for a military disability pension while Q4b is checking for a Reserve pension. Both of those can be concurrently received with a FERS pension, as waived in federal law and referenced in the post.
Q4c is asking whether you’re waiving an active-duty pension in order to buy all of your military service credit deposit for a FERS pension. This is generally only a good idea if you retired from active duty at a very junior military rank and achieved a very high civil-service grade. In nearly two decades of writing about the military service credit deposit, I’ve only seen one active-duty retiree waive their pension.
Tim Ekola says
I’m not sure if you know the answer, but I thought I’d run this question by you…
I have worked for the VA for 3 years. Before that I worked for DoD (Army Civilian) for 5 years and 3 months.
I did not “sell” my active-duty time back to the VA, as I retired from the Navy Reserve and will be collecting my reserve retirement at age 60 (just a few more years away). My understanding is that – one cannot draw both “active duty” retirement and FERS (doubling dipping), but that one can draw both reserve retirement and FERS.
Can you confirm?
Also, if I can “double dip” what do I need to do to “sell” back my active duty years?
Thanks in Advance.
Best Regards,
Tim
Doug Nordman says
Tim, this post cites the links to the federal law and regulations that allow you to buy your military service credit deposit from OPM for your FERS pension. They’re in the last few paragraphs of the post.
You’d have to waive an active-duty pension if you had one, but you’ve earned a Navy Reserve pension. Those quotes from federal law and the FERS Handbook are the references which let you receive both your Reserve pension and your FERS pension.
Contact your HR office at the VA to start the process of buying your military service credit deposit. The GubMints post “Comprehensive Military Service Credit Deposit Guide” shows you how. It’s in the Related Articles section of the bottom of the post.