Key Takeaways
- Military service can often count toward your FERS retirement, potentially increasing your benefits if you follow the proper process.
- Recent changes eliminated the Windfall Elimination Provision, improving Social Security coordination for future federal retirees.
If you’ve served in the military and now work in a federal civilian role, understanding how your service years interact with the Federal Employees Retirement System (FERS) is an important part of retirement planning. This guide explains how both systems work, how service credit can be transferred, and how recent changes affect those retiring under FERS.
What Is the FERS Retirement System?
FERS components overview
The Federal Employees Retirement System (FERS) is the primary retirement plan for most civilian employees hired by the U.S. government since 1987. FERS works as a three-part system:
- FERS Basic Annuity: A pension benefit, calculated based on years of creditable service and your highest average salary over three consecutive years.
- Thrift Savings Plan (TSP): Similar to a 401(k), this tax-advantaged account allows contributions from both you and your agency, with multiple investment options.
- Social Security: FERS employees pay Social Security taxes and, upon eligibility, can receive Social Security retirement benefits alongside the FERS annuity and TSP withdrawals.
Who is covered by FERS?
FERS covers nearly all federal civilian workers who were hired after December 31, 1983, or who chose to transfer from the older Civil Service Retirement System (CSRS). This includes full-time, part-time, and some seasonal employees, but not contractors or those exclusively under CSRS.
How Do Military Retirement Benefits Work?
Types of military retirement plans
Active-duty military retirement is governed by several systems, depending on when you served:
- Final Pay: For those who entered service before September 8, 1980.
- High-3 System: For those who entered service on or after September 8, 1980.
- Blended Retirement System (BRS): Applies to service members who joined after January 1, 2018, combining a pension with automatic and matching contributions to the military’s defined contribution plan.
Each plan calculates the retired pay differently, but all are based on a combination of years served and your final or average basic pay.
Eligibility criteria for service members
Service members generally qualify for retirement after at least 20 years of active-duty service. Some reserve and National Guard members may also be eligible based on a combination of service time and age, subject to specific Department of Defense rules.
What Is Military Service Credit in FERS?
Definition of service credit
Military service credit refers to counting your active-duty or certain reserve time towards your FERS retirement eligibility and annuity calculation. This service is considered “creditable” if it is not being used to receive a military pension based on active-duty service (with some exceptions for combat or disability retirements).
Process for obtaining credit
To add your military time to your FERS service record, you must usually:
- Complete a request for military service credit through your agency’s human resources office.
- Provide your DD Form 214 or other official documentation verifying your service.
- Pay a deposit to cover the FERS cost for that period of military service, typically a percentage of your basic pay earned during active duty, plus interest if you don’t pay within a specific timeframe.
Once your deposit is complete, your agency updates your personnel record, and that service is included toward both retirement eligibility and your FERS annuity calculation.
Key Differences Between FERS and Military Pensions
Annuity calculation differences
FERS and military retirement use different formulas. FERS calculates your pension based on total creditable service (including qualified military time if bought back) and your highest average salary over any consecutive three-year period. Military retired pay typically depends only on your military service years and the pay formula for your entry date.
Vesting and eligibility requirements
Under FERS, you are “vested” (eligible for a pension benefit) after five years of creditable service. In contrast, military retirement usually requires at least 20 years of service for an immediate pension, unless separated due to medical disability.
Thrift Savings Plan and Social Security
FERS integrates with both the Thrift Savings Plan (TSP) and Social Security. All FERS participants can contribute to the TSP, and military personnel who joined under the Blended Retirement System also have access to the TSP. Both FERS and most military service members pay Social Security taxes, making Social Security retirement an additional benefit for eligible retirees.
Can You Combine Military and FERS Service?
Rules for combining service
Most former military members now in federal civilian positions may combine their active-duty time with their FERS service for retirement purposes—so long as they are not already drawing a regular active-duty military pension based on that same service. In some cases, you may combine reserve retirements, provided you meet certain criteria and make the required deposits.
Deposit requirements explained
To combine your military and FERS service, you must pay a deposit to the Office of Personnel Management (OPM), generally equal to a percentage of your military basic pay plus interest if you don’t pay within the established window. Paying this deposit enables your military time to count toward:
- Your FERS annuity calculation, potentially increasing your monthly benefit
- Meeting minimum eligibility service requirements
If you fail to pay the deposit, your military service will not count toward your FERS retirement.
What Are the Considerations for Buying Back Military Time?
Cost and payment methods
The cost for “buying back” military time under FERS is typically 3% of your military basic pay earned during your active-duty service, with interest added if payment is delayed past the two-year initial employment window. You can pay through payroll deduction, lump sum, or in installments—as long as the full amount (with any accumulated interest) is paid before you retire.
Potential impact on retirement benefits
Buying back your military service credit can result in:
- Reaching retirement eligibility sooner (by increasing your years of creditable service)
- Receiving a higher FERS annuity, since your pension will be based on both your civilian and credited military service
However, if you are already receiving a military pension (other than for reserve or disability retirements), your creditable military time may be limited or require waiving the military pension to use the service in FERS calculations.
What Changed for FERS and Social Security in 2026?
Repeal of the Windfall Elimination Provision
Previously, the Windfall Elimination Provision (WEP) could reduce Social Security benefits for individuals with federal or military retirement who didn’t pay into Social Security for part of their career. In 2025, Congress repealed the WEP, so as of 2026, it no longer applies to FERS participants or their Social Security benefits.
Implications for future retirees
The WEP repeal means that federal employees and military personnel who qualify for both FERS and Social Security now receive their Social Security benefits calculated in full, without WEP-related reductions. This can improve your overall retirement income compared to federal retirees before the policy change.
Frequently Asked Questions About Service Credit
Timelines for making deposits
To avoid interest, you should initiate a military deposit within your first two years of federal civilian service. Deposits made after this period accrue interest annually, increasing the required amount over time. Complete deposits before you retire to ensure your military time is properly credited.
Effect of disability retirement
If you separate from federal service due to disability retirement, military service credit may be counted similarly to regular federal service when calculating disability annuities. However, additional eligibility requirements or service exclusions may apply, so review the latest OPM guidance on disability retirement calculations involving prior military service.
