Financial Planning for Generation X & Y Women
 
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Expert Q&A Archive

07/30/2004
Whether to repay her debt to her retirement account.
Is it a safe investment to repay your debt to Civil Service Retirement Systems? Like if you had to draw money out and you need to repay it back before you retire?
Benefits Officer, U.S. Department of Labor:
There are a number of factors to consider when deciding whether to make a redeposit to the Civil Service Retirement System (CSRS), including the date of the refund and the amount of the redeposit. We suggest you visit your Human Resources Office and have them generate a retirement estimate for you, to include the effects of making or not making a redeposit. Basically, the effect of making a redeposit for refunded retirement contributions depends on whether the refunded service ended before October 1, 1990 and whether your nondisability annuity begins after December 1, 1990.

If the refunded service ended before October 1, 1990, and your nondisability annuity begins after December 1, 1990, then you do not have to make a redeposit to receive credit for the refunded service. Full credit will be allowed for the length of the refunded service; however, if you do not make the redeposit, the annuity will be "actuarially" reduced over the entire period of the annuity.

If the refunded service ended after September 30, 1990, you must pay the redeposit.

If you are a Federal Employee Retirement System (FERS) employee and took a refund of your FERS contributions, then this service will no longer be creditable for retirement purposes.