Military Buyback

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ubascuba
Posts: 86
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Military Buyback

Post by ubascuba »

I am retired from the National Guard and I am now a FERS employee. Because I am retired from the Guard I will not be able to collect my retirement pay until 60. I've talked to several people about the military buyback program, but I can't find any concrete info. I've heard that if you have retired from the military, you do not want to buy buy your military time because you will give up your military retirement. I believe this is only for people who have retire from active duty, but I am not sure. My plan is to buy back my mil time, but I don't want to jeopardize my military pension. Can anyone point me in the right direction on how to proceed? Thanks!
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Billionair
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Re: Military Buyback

Post by Billionair »

100% positive that if you bought back your time and ARE receiving a pension, you don't qualify for the military buyback time.

I bought back my time, no pension, only receiving disability from the war, for the price of 7.2 years. Another co-worker, 20 years retired navy received 0 credit for years "bought," to retirement. Did receive credit for years worked at TSA. Military credit did increase him to 8 hours of leave a pay period. However his federal service is rated at 32 years. We are also on the LEO side at DHS.

So it is a little different that we have federal early retirement, however, across the board military retirees get that side/pension at that salary. If you didn't retire, than the years ARE eligible to be bought once you request it through your department HR, and they contact your DFAS gets your military earnings and years estimated to be bought back. Personally, I think it's not worth it, because over 10 is going to be seriously expensive, you also accrue interest after two years if you can't pay it off. Keep one pension/retirement, finish as high as you can now, and retire cumulatively with the federal pension, then receive NG at the same time at 60.
-What we do in Life, echoes in Retirement-

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ArrieS
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Re: Military Buyback

Post by ArrieS »

ubascuba wrote:I am retired from the National Guard and I am now a FERS employee. Because I am retired from the Guard I will not be able to collect my retirement pay until 60. I've talked to several people about the military buyback program, but I can't find any concrete info. I've heard that if you have retired from the military, you do not want to buy buy your military time because you will give up your military retirement. I believe this is only for people who have retire from active duty, but I am not sure. My plan is to buy back my mil time, but I don't want to jeopardize my military pension. Can anyone point me in the right direction on how to proceed? Thanks!
This is from the CRSR and FERS handbook.
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.

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).
page 15

https://www.opm.gov/retirement-services ... k/c022.pdf

Now you may have noticed it says CRSR and if you go to the FERS section that starts on page 31, it only covers what is different and states,
This subchapter explains how FERS differs from CSRS. It refers readers to the applicable CSRS rule or gives the FERS rule if different.
The FERS section doesn't address this topic so I take that to mean the same conditions for a reserve retirement apply.

Sooooooo, if your retirement is from a reserve component, you can have both. So, from my reading, you can buy back your active duty time and still receive your reserve retirement.
OCTOBER: This is one of the peculiarly dangerous months to speculate in stocks in. The others are July, January, September, April, November, May, March, June, December, August, and February. - Pudd'nhead Wilson's Calendar

23V23C
Posts: 72
Joined: Sun Sep 24, 2017 2:13 pm

Re: Military Buyback

Post by 23V23C »

Here is a good link that gives a simple explanation for when a retired military member should/should not buy back their time. http://www.federalretirement.net/milita ... d_military

The FERS formula if you retire before age 62 is “1% x avg high-3 salary x years of service” and after age 62 is “1.1% x avg high-3 salary x years of service”

When buying back your time you get to use your mil svc years toward your Civ retirement which is why you will no longer receive the mil ret pay check. Try the formula without your buy back years added in for FERS, then use it with your buy back years. Knowing you lose your military retired pay if you buy the years back, you’ll want to see if having separate 20 year Mil ret pay and 20 year Civ ret pay checks are bigger than a 40 year Civ ret pay check (estimating you have 20 years svc for each). If the separate ret pay check’s total is bigger than the single Civ ret pay check, don’t combine them. If the single check it bigger, BUY!!!

Just some food for thought: Your military pay gets the full COLA each year like Social Security recipients, while your FERS gets the reduced COLA (this year Mil ret got 2.8% and FERS got 2%). Also, COLA for FERS retirements doesn’t start until after age 62, so no COLA increases if you buy back your military time to retire at your MRA of 56 (or so).

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ArrieS
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Re: Military Buyback

Post by ArrieS »

You should get an answer from HR and make sure they address the reserve retirement point. The posts above all provide information that seems related to an active duty retirement which doesn't fit a reservist.

Because one, only very limited time counts for a buyback. For example, you did twenty years as a reservist, but you wouldn't have spent all 20 years active. As an example, you only spent a total of 4 years that are credible for a buyback. Which means you spent 16 years drilling and making your points.

If you can't receive both and you buy back your 4 years, you lose the 16 years you spent drilling. That is why I think the FERS and CRSC handbook have that exception listed.

Have your HR specifically answer to your reserve retirement and when you ask them, quote that section of the handbook in case they are tempted to give you the active duty answer off the top of their head.
OCTOBER: This is one of the peculiarly dangerous months to speculate in stocks in. The others are July, January, September, April, November, May, March, June, December, August, and February. - Pudd'nhead Wilson's Calendar

rgoodin66
Posts: 23
Joined: Fri Nov 19, 2010 9:14 pm

Re: Military Buyback

Post by rgoodin66 »

when you are buying back your time. you are only buying back the time for active duty title 10. Not title 32

yes, as a retired reservist or a retired national guard. you can collect both

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Aitrus
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Re: Military Buyback

Post by Aitrus »

ubascuba,

I'm in your exact position: a retired Guardsman and current Civil Service employee. I did 10 years AD time before switching over to Guard. I bought back my AD time while still in the Guard, completing the full buyback a few years ago. I retired (transferred to the Retired Reserves) last year with 4,600 points. Here's how it works:

- You can buy back only your AD time, not your Guard time. Time that you can purchase back is any Title 10 time you've earned. Your Title 32 time isn't eligible for buyback. If you retired as a Title 32 due to Sanctuary / having over 7,200 points, then you are already receiving a paycheck. The math says that it's not worth buying back your AD time in that case because the only time you're allowed to buy back AD time is if you're not already receiving a paycheck from it. That's why a full AD retiree can't buy back his 20 years to apply it to the civil service job he got after he retired from AD service.

- Your Title 10 time will be added to your years of civil service the moment you start paying it back (even if you don't have the entire amount paid off), effectively rewinding the clock for leave accrual and seniority purposes, but not for pay scale step promotion purposes. I'm unsure if it counts for the time needed to qualify for the Social Security Supplement if you retire early, or if the SSS requirements are for actual years worked only.

- The amount you have to pay to buy back time is determined by a few things. First, how much were you paid on AD? Second, how much do you currently contribute to FERS? You'll have to pay your AD pay x FERS contribution %, just as if you were contributing to FERS while on AD. So if you made $100k during your AD years, and currently contribute 4% to FERS, then you'd have to pay $4,000. That amount is interest free for the first two years you work in a civil service status, regardless of whether or not you initiated the buyback process. After that, the amount you owe accrues interest similar to that of the G Fund. If you wait 10 years to initiate the buyback, then you'd have $4,000 plus 10 years of G Fund interest to pay.

- The process is a tedious chore to get through. The buyback system doesn't accept email submissions, and I can't recall if they accept snail mail. I had to fax mine in, and then it took a further 3 or 4 months to get the calculation back, and another month to get the debt added to my civil service account, at which point I chose to make paycheck allotments to pay it off. You also have the option of paying it off in a lump sum by taking a check to the payroll office.
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Aitrus
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Re: Military Buyback

Post by Aitrus »

ArrieS wrote:You should get an answer from HR and make sure they address the reserve retirement point. The posts above all provide information that seems related to an active duty retirement which doesn't fit a reservist.

Because one, only very limited time counts for a buyback. For example, you did twenty years as a reservist, but you wouldn't have spent all 20 years active. As an example, you only spent a total of 4 years that are credible for a buyback. Which means you spent 16 years drilling and making your points.

If you can't receive both and you buy back your 4 years, you lose the 16 years you spent drilling. That is why I think the FERS and CRSC handbook have that exception listed.

Have your HR specifically answer to your reserve retirement and when you ask them, quote that section of the handbook in case they are tempted to give you the active duty answer off the top of their head.
My HR didn't know squat about it. I had to do all the digging myself.
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