Can I Earn A Military Pension And A Civil-Service Pension

You can earn a military pension and a civil-service pension. But there are specific requirements to meet.
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Table of Contents
  1. Does Military Service Count Towards Civil Service Retirement?
  2. Can I Collect Military Retirement and Civil Service Pay?
  3. Let’s Take a Closer Look
  4. Guard or Reserve Retirement with a Civil Service Pension
  5. The Benefits of Serving in the Civil Service After the Military
  6. The Disadvantages of The Civil Service

Many military veterans are drawn to government service in their post-military careers. There is often a desire to continue serving our nation, a sense of continuity for many, and a continuation of respectable pay and benefits. And, you may also be able to apply your military service toward a government pension. Let’s take a deeper look at how you can use your military service to supercharge your civil service career.

A 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 actual with the 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 National Guard, or for the full 20 years of military service?

I guess what 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 suppose I am a little confused as to 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.

Does Military Service Count Towards Civil Service Retirement?

The short answer is YES if you want it to.

Federal employees who are veterans can receive retirement credit for military service once they make a deposit into a civilian service annuity covering their military service. This blended retirement system is known as a military buy-back rule and varies based on the year the veteran became employed by the federal Government.

There are some important things to know about how a military pension and civil service pension work together

Most military retirees are barred from receiving credit toward a civilian annuity unless they waive their military retired pay. You can’t receive credit for any active service in your Federal Employees Retirement System (FERS) civil service retirement system computation if you are receiving military retired pay, unless you were awarded the retired 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. (pertaining to retirement from a reserve component of the Armed Forces).

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.

Can I Collect Military Retirement and Civil Service Pay?

Yes, you can collect military retirement benefits and work in the civil service as well. The complications arise when determining how you want to handle your civil service retirement.

Military retirement pay does not completely replace military income, which is why some military members look at a civil service career. Retiring in a federal service job can enhance retirement pay, but there are factors that require the employee to consider some important alterations to their retirement plans. You can’t draw both military and federal retirement for the same span of time. This is known as double-dipping.

You have two options:

  • Forfeit military retirement pay and buy into the federal retirement plan.
  • The other option is not to buy in, and to start fresh with federal service with no credit for time served in the military. This means you start from year zero as a federal employee and begin building creditable civilian service toward federal retirement while maintaining your military pension.

Let’s Take a Closer Look

This is a great question on a very confusing issue. (If there’s anything more complicated than retiring from the military, it’s retiring from federal civil service.) Federal law entitles military veterans who become federal civil service employees to receive credit for their military service by “buying back” their active duty time. The money they pay to the Federal Employees Retirement System pension fund for each year of their active-duty time gives them an additional year of credit toward their FERS pension.

For veterans entering federal civil service after active duty, the military service credit deposit is a fantastic way to boost the civil service pension. When our reader left active duty after 14 years, they were not eligible for a military pension. The only way to receive some sort of retirement benefit for those years of active duty is to transfer to the Reserves or National Guard… or start a bridge career with the federal civil service.

In this case, the reader paid a meaningful sum of money (out of their own savings) to be credited with an additional 14 years of time for their civil-service pension. In most cases, that investment is a great move! They’re eligible for a larger pension (because they paid for it) and they receive additional credit toward two more civil-service seniority benefits.

Note: this reader made a smart choice. If you’re a military veteran in the federal civil service, it’s almost always a good idea to buy your military service credit deposit. Read the Gubmints.com comprehensive guide to the military service credit deposit, and scrape up the money to boost your retirement. You can’t get this return from the stock market or in real estate. If you’re already retired from active duty and you’re in the federal civil service, you can still get a couple of free deals on your federal Service Computation Date.

Guard or Reserve Retirement with a Civil Service Pension

Now the reader has a good deal on federal civil-service retirement. But what happens when they continue to drill with the National Guard and then qualify for that pension as well?

The issue behind the reader’s National Guard retirement question is the type of military service:

  1. less than 20 years of active duty without qualifying for an active-duty pension, or
  2. 20 years (or more) of active duty resulting in an active-duty pension, or
  3. a combination of active duty and more years in the Reserve or National Guard, resulting in a Reserve/Guard pension at age 60.

1. In the first case, the veteran could buy back that time toward a federal civil service pension with the military service credit deposit.

2. In the second case, federal laws against “double dipping” would require the military retiree to waive their military retirement pay if they buy the civil service’s military service credit deposit. This is a bad financial move. Military retirees could still request two other civil-service benefits which are based on their active-duty service, and those benefits are worth applying for.

3. Federal law makes an exception! The federal civil service employee can still make a military service credit deposit for their years of active duty, and they can also receive a Reserve/Guard pension. They’ve earned that Reserve/Guard pension on their own and they haven’t bought it as a credit, even though they took the credit for their active-duty service.

I realize that this looks too good to be true. (A great deal from both the military and the federal civil service?!?A Reserve/Guard retirement is handled under Chapter 1223 of federal law (10 U.S.C. 12731). The details of the civil-service exception are in Chapter 22 of the CSRS/FERS Handbook. Here’s the quote from Chapter 22 section 22A4.1-1 of the CSRS/FERS Handbook.

The specific rule from the “Receipt of Military Retired Pay” section is in the third bullet point:

In determining eligibility for CSRS retirement or in estimating the amount of annuity for an employee (special rules for survivors of employees who die in service are covered in Chapter 70), who receives military retired or retainer pay, do not give credit for any military service at the date of separation for civilian retirement unless one of the following is true.

2. The employee is receiving military retired pay that was awarded:
On account of a service-connected disability incurred in combat with an enemy of the United States; or

On account of a service-connected disability caused by an instrumentality of war and incurred in the line of duty during a period of war; or
Under the provisions of 10 U.S.C. 12731-12739 (Chapter 1223) which grants retired pay to members of reserve components of the armed forces on the basis of age and service (active and reserve).

For those who’ve noted that the section refers to the old CSRS pension system, not the current FERS pension, it’s covered under section 22B1.1-1.C “Applicable CSRS Provisions”:

The following sections and parts of subchapter 22A apply to FERS employees:
Part 22A4: Receipt of Military Retired Pay .

The Benefits of Serving in the Civil Service After the Military

The most obvious benefit is that you can augment your retirement with civil service pay after a full military career.

Compensation packages are excellent and most include regular basic pay raises, a pension plan, health benefits, long term health insurance, dental and eye insurance, life insurance, alternative work schedules, and options to work at home. Some agencies even help pay for student loans and offer other incentives.

There are only five executive core qualifications (ECQs) when you apply for a position, and they are exactly the same for every position:

  • Leading People
  • Leading Change
  • Business Acumen
  • Results
  • Building Coalitions

The Office of personnel management (OPM) has specific guidance on how to write ECQs, including format and length

There are two types of job announcements: Merit Promotion and Delegated Examining Unit (DEU).

  • Merit Promotion announcements recruit from existing or former civil servants.
  • DEU announcements are used to recruit from the general public. Military personnel and veterans can apply for Merit Promotion announcements under a law called VEOA – the Veterans Employment Opportunity Act.

For many DEU applications, Veterans’ Preference (VP) – gives you an advantage because of your veteran status. Veterans with a service-related disability rating from the VA are eligible for additional preferences.

If the job announcement says “relocation expenses will be paid,” or similar language, then the agency will pay for some or all of your move.

The Disadvantages of The Civil Service

You’ll have lots of competition when you apply for a job. The process isn’t quick or easy.

A Federal resume is not the same as a typical corporate resume. It’s a lot more comprehensive and requires additional information.

If you’re hired, civil service salaries are set, although there is some room for negotiation. Expect the offer to be at the minimum amount (Step 1) of the appropriate grade.

While there are no restrictions on applying for civil service positions in other federal agencies, if you are a retired member of the armed forces, you cannot be appointed to a civilian position in DoD within 180 days after retirement, with a few select exceptions.

You should also know that you will probably be dismissed from civil service if your application is falsified. Also, on your first day, you will take an oath of office. It’s similar to the oath you took while on active duty.

One other thing, all federal jobs require a National Agency Check and some positions require clearances or trust investigations.

Bottom line: if you serve in the Reserve or National Guard and also work in the federal civil service, then you can take your military service credit deposit and still receive your full Reserve/Guard pension. You’ve earned both of them!

Military Guide to Financial Independence

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About Doug Nordman

Doug Noordman is a United States Navy submarine force veteran with 20 years of service. Noordman retired in 2002 and wrote "The Military Guide to Financial Independence and Retirement" to share the stories of over 50 other financially independent servicemembers, veterans, and families. Noordman donates 100% of the revenue from his book sales to military-friendly charities.

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  1. 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

  2. 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?

  3. 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.

      • 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.

  4. 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.

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