Refund of Retirement Contributions
If you were covered under the Federal Employees Retirement System (FERS)
and 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
- 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:
FERS Deferred Retirement
Payment of a refund of your FERS deductions will permanently eliminate your
retirement rights for the period of service that the refund covers. You
will not be permitted to pay the money back, even if you are later reemployed
in the government. The refunded FERS service cannot be used in computing
annuity benefits that you may later become entitled to receive under FERS and
it cannot be used in determining the length of service for future annuity eligibility
purposes. Refer to information about retirement
eligibility.
If you transferred to FERS and also have service under the CSRS retirement
system-
When you apply for a refund, OPM will refund all retirement deductions to your
credit under both FERS and CSRS. Unlike your FERS refund, you can pay
back the amount of the CSRS deductions, plus interest, if you are later reemployed
in the Federal Government. When you apply for the refund, you can specify
that you only want a refund of your CSRS deductions.
If you are covered under the Civil Service Retirement System (CSRS)
and 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 CSRS
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. Click on the link shown
below:
- If you are covered under FERS, use Application for Refund of Retirement
Deductions (FERS), Standard
Form (SF) 3106 [415 KB]
- If you are covered under CSRS, use Application for Refund of Retirement
Deductions (CSRS), Standard
Form (SF) 2802 [1 MB]
If you have been separated for 30 days or less, submit your application to
your servicing personnel office. If you have been separated more than
30 days, submit your application to the Office of Personnel Management (OPM).
U.S. Office of Personnel Management
Retirement Operations Center
Post Office Box 45
Boyers, PA 16017
Interest payable on the lump sum payment of your retirement
contributions
For service under the Federal Employees Retirement System (FERS), you will
get interest on the refund of those contributions if you worked more than one
year. Interest is paid at the same rate that is paid for government securities.
For service under the Civil Service Retirement System (CSRS), 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 Internal
Revenue Service website:
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.