Former Employees
If you leave your Government job before becoming eligible for retirement
Options-
• You can ask that your retirement contributions be returned to you
in a lump sum payment, or
• If you have five or more years of civilian service, you can wait until
you are retirement age to apply for monthly retirement benefit payments.
This is called a deferred retirement. For detailed information about
deferred retirement, click on the following link: CSRS
Deferred Retirement
If you get a refund of your retirement contributions now, you will no longer
be eligible to receive monthly payments when you reach retirement age, unless
you are later reemployed subject to the Civil Service Retirement System or the
Federal Employees Retirement System. Refer to information about retirement
eligibility.
Procedures for having your retirement contributions refunded to you-
If you are leaving your Federal job and want a refund of your retirement contributions,
you can get an application from your personnel office, complete it, and return
it to them. If you are no longer in the Federal service, you can acquire
the appropriate application from our website. The application is shown
below:
"Application for
Refund of Retirement Deductions (CSRS)," Standard Form (SF) 2802 [1000 KB]
If you are still working, submit your application to your servicing personnel
office. If you have left Federal service, submit your application to the
Office of Personnel Management (OPM). See
Address.
Interest payable on the lump sum payment of your retirement contributions-
For service under the Civil Service Retirement System, interest will be included
in the refund of those contributions if you have more than one but less than
five years of service. Interest is paid at three percent.
Taxability of refund payment-
Your retirement contributions are not taxable, but interest included in the
payment is taxable. You should contact the Internal Revenue Service for additional tax information.
Rollover of refund payment to IRA or Employer Sponsored Plan-
You can roll over lump sum payments representing your retirement contributions,
including voluntary contributions, and applicable interest.
An eligible payment can be paid either to you or directly to an individual retirement
account or other employer sponsored plan. Your choice will affect the amount
of taxes you owe.
We are required to withhold Federal income tax from taxable payments over $200
at the rate of 20 percent. However, you may choose to take all or part of these
payments in a direct rollover to an individual retirement account or an employer-sponsored
retirement plan that accepts rollovers. The taxable portion can be rolled over
into the Thrift Savings Plan. If you make this election, we will not withhold
the Federal income tax from the taxable payments.
You can open an individual retirement account to receive a direct rollover.
You must contact the individual retirement account sponsor to find out how to
have your payment made to your account. If you are unsure of how to invest your
money, you may wish to temporarily establish an account to receive the payment. However, you may wish to consider whether or not you may move any or all of
the monies to another account at a later date without penalties or limitations.
If you choose to have the payment made to you and it is over $200, the taxable
portion is subject to the 20 percent Federal income tax withholding. The payment
is taxed in the year in which it is received unless within 60 days after receiving
it, you roll it over to an individual retirement account or retirement plan
that accepts rollovers. You can roll over up to 100 percent of the eligible
distribution, including the 20 percent withholding. To do so, you must replace
the 20 percent withholding within the 60 day period. You will be taxed on any
amount that you do not roll over. For example, if you roll over only the 80
percent of the distribution, you will be taxed on the remaining 20 percent.
You can find more information about the taxation of payments from qualified
retirement plans from the following Internal Revenue Service publications:
• IRS Publication 575, "Pension and Annuity Income",
•
IRS Publication 590, "Individual Retirement Arrangements",
•
IRS Publication 721, "Tax Guide to U.S. Civil Service Retirement
System Payments", and
•
Form 4972 [312 KB], "Tax on Lump Sum Distributions".
We will not withhold any amount for Federal income tax if your total taxable
lump sum is less than $200. We will request a rollover election when you are
eligible for a payment of $200 or more.