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Non-Appropriated Fund Instrumentality (NAFI) Program

The Non-Appropriated Fund Instrumentality (NAFI) Program is a computer-based system that provides benefits specialists a tool to assist eligible employees with retirement coverage elections under Public law 104-106.

Public Law 104-106 is the National Defense Authorization Act for Fiscal Year 1996. Section 1043 of this legislation created a 1-year opportunity under which employees under the Federal Employees Retirement System (FERS) who meet criteria set out in the law could elect to receive FERS credit for prior nonappropriated fund instrumentality (NAFI) service, or to retroactively resume retirement coverage previously held as a NAFI employee. Likewise, certain NAFI employees at the Departments of Defense or Coast Guard with prior service under FERS or the Civil Service Retirement System (CSRS) could elect to return to retirement coverage under FERS or CSRS or to credit their FERS service in their current NAFI retirement plan.

The general purpose of this portion of section 1043 is to allow certain FERS and NAFI employees who had moved between the systems before the effective date of the regulations (August 10, 1996) the opportunity to combine all their service--both NAFI and regular civil service--in a single retirement benefit. The windows-based program described above has been jointly sponsered by the Department of Defense and the U.S. Office of Personnel Management to help eligible employees make these elections.

The program takes information about past service and the employees expectations of future employment to provide projections of future benefits under the options that are available to the employee.

The deadline for making these elections is August 11, 1997, unless an employee meets the criteria described later in this announcement for a waiver of the deadline.

Note: The legislation also provides that certain employees who move between NAFI employment and FERS/CSRS anywhere in the Federal government on and after August 10, 1996 may elect to retain their current retirement coverage in future employment. This computer model is not designed to assist employees with these elections.


Employees must satisfy the following eligibility criteria to make an election under section 1043 of Public Law 104-106:

  • A qualifying move from Appropriated Fund (APF) to Nonappropriated Fund (NAF) plan (or vice versa) was after 12/31/1965, and before 08/10/1996. The move is considered to have been made at the time of entering into the new position.

  • The employee or member is not currently covered under CSRS or FERS following a voluntary transfer from CSRS.

  • The employee or member was vested in the former retirement plan prior to the qualifying move.

  • The employee's or member's current retirement coverage began not more than one year after separation from the former retirement plan.

  • The employee or member has not had a break in service (more than 3 days) since the date of the qualifying move.

  • Additionally, employees or members who have previously had an opportunity under Public Law (PL) 101-508 (Portability Act), to elect to continue coverage following a move may now elect to combine service under the current retirement plan but may not return to the former plan.


Users' Guide. A user's guide is available in two ways. A stand-alone document can be printed out before you enter the transfer model. Within the model information for the User's Guide is available on Help! screens.

Eligibility Criteria. While there are a number of edits in the program that identify situations where an employee is not eligible to make an election, or where the election opportunities are limited, the program can not identify every such situation. The using personnelist must verify that each employee is eligible to make an election and also which options are available. An example of a situation which the program will not identify is whether or not the employee had a previous opportunity to make an election.


Public Law 104-106 requires that all employees eligible to make an election receive timely notice of the election opportunity. Therefore, any employee who did not receive timely notice of the election opportunity may make an election after the August 11, 1997, deadline. To avoid deadline waivers, we urge agencies to notify employees as soon as possible. The law also requires that employees receive any information or assistance needed to make the election. Section 847.304 of title 5, Code of Federal Regulations, grants agencies the authority to waive the election deadline if an employee did not receive timely notice or counselling concerning the election opportunity.

Download the NAF Program



Please contact the following offices for information about an employee's prior service or contributions to a retirement plan that are available for transfer. Note that the current employing agency has an employee's records of current service and retirement contributions.


For information about the Department of Defense regulations implementing this legislation, and assistance with the NAF retirement plan rules, please contact the Nonappropriated Fund Retirement Policy and Operations offices.

For assistance about the regulations and guidance governing employees in appropriated fund positions and general assistance on using this program, call (202) 606-0777, extension 954, or email Agency Services.

For assistance regarding the Federal Retirement Thrift Investment Board's policy, call (202) 942-1460.

For technical information about the programming and underlying assumptions in this program, contact the developer of this model at (703) 642-5225 or send an email to Economic Systems. Inc.

For comments on the OPM Federal Benefits Page, please contact: