[Code of Federal Regulations]
[Title 5, Volume 2]
[Revised as of January 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 5CFR842.307]

[Page 293-294]
 
                    TITLE 5--ADMINISTRATIVE PERSONNEL
 
          CHAPTER I--OFFICE OF PERSONNEL MANAGEMENT (Continued)
 
PART 842--FEDERAL EMPLOYEES RETIREMENT SYSTEM--BASIC ANNUITY--Table of Contents
 
                      Subpart C--Credit for Service
 
Sec. 842.307  Deposits for military service.

    (a) Eligibility to make a deposit. (1) An employee or Member subject 
to FERS may make a deposit for any distinct period of military service 
by filing an application in a form prescribed by OPM.
    (2) An application to make a deposit is filed with the appropriate 
office in the employing agency, or, for Members and Congressional 
employees, with the Secretary of the Senate, or the Clerk of the House 
of Representatives, as appropriate.
    (3) An employee's or Member's deposit for military service must be 
completed before separation from service. If a deceased employee or 
Member was, at the time of death, eligible to make a deposit, the 
employee's or Member's survivor may make the deposit in one lump sum to 
the former employing agency, the Secretary of the Senate or the Clerk of 
the House of Representatives, before OPM completes adjudication of the 
survivor annuity application. A person who was eligible to make a 
deposit for military service but failed to complete the deposit within 
the time limits provided in this paragraph, may complete the deposit in 
a lump sum within the time limit set by OPM when it rules that an 
administrative error has been made.
    (b) Amount of deposit. (1) The amount of a deposit for military 
service equals 3 percent of the basic pay for the service under 37 
U.S.C. 207, or an estimate of the basic pay (see paragraph (c)(1)(iii) 
of this section), plus interest, unless interest is not required under 
paragraph (b)(4) of this section.
    (2) Interest is charged at a rate as determined by the Secretary of 
the Treasury for each calendar year that equals the overall average 
yield to the Fund during the preceding fiscal year from all obligations 
purchased by the Secretary during such fiscal year under 5 U.S.C. 
8348(c), (d), and (e).
    (3) The computation of interest is on the basis of 30 days to the 
month. Interest is computed for the actual calendar time involved in 
each case; but whenever applicable, the rule of average applies.
    (4) Interest is computed from the mid-point of each full period of 
service

[[Page 294]]

included in the computation. The interest accrues annual on the 
outstanding portion beginning on the second anniversary of the 
employee's or Member's beginning date of coverage under FERS, and is 
compounded annually, until the portion is deposited. Interest is charged 
to the date of deposit. No interest will be charged if the deposit is 
completed before the end of the year after interest begins. For example, 
if an employee becomes subject to FERS on March 1, 1988, interest begins 
to accrue on March 1, 1990; however, no interest would be included in 
the deposit due if the deposit is completed by February 28, 1991.
    (c) Processing deposit applications and payments. (1) The agency, 
Clerk of the House of Representatives, or Secretary of the Senate will 
have the employee or Member--
    (i) Complete an application to make deposit;
    (ii) Provided a copy of his or her DD Form 214 or its equivalent to 
verify the period(s) of service; and
    (iii) Provide copies of all official military pay documents, as 
identified in instructions issued by OPM, which show the exact basic pay 
he or she received for full period of service; or, if such evidence is 
not available, obtain a statement of estimated earnings from the 
appropriate branch of the military service and submit the statement.
    (2) Upon receipt of the application, the DD Form 214, and either the 
evidence of exact basic pay or the statement of estimated earnings, the 
agency, Clerk of the House of Representatives, or Secretary of the 
Senate will establish a deposit account showing--
    (i) The total amount due, including interest, if any;
    (ii) A payment schedule (unless deposit is made in a lump sum); and
    (iii) The date and amount of each payment.
    (3) Deposits may be made in a single lump sum or in installments. 
The agency, Clerk of the House of Representatives, and Secretary of the 
Senate are not required to accept installment payments in amounts less 
than $50.
    (4) Payments received by the employing agency, the Clerk of the 
House of Representatives, or the Secretary of the Senate will be 
remitted to OPM for deposit to the Fund in accordance with payroll 
office instructions issued by OPM.
    (d) Distinct periods of service. A deposit is not considered to have 
been made for any distinct period of service unless the total amount due 
for the period is paid in full. A ``distinct period'' for this purpose 
is the total years, months, and days from the date of entry on active 
duty (or from January 1, 1957, if later) to the date of final discharge 
for enlisted military personnel, or to the date of final release from 
active duty for officers and reservists. A ``distinct period'' also 
includes consecutive periods of service where there is no break in 
service, but does not include any lost time.