Firefighter Military Buyback: How to Buy Back Military Time for FERS Retirement

Why Military Time Matters for Firefighter Retirement

Many federal firefighters came to the job through the military. Active duty service in the Army, Marines, Air Force, Navy, or Coast Guard does not automatically count toward your FERS retirement — but it can, if you make the required deposit. For a firefighter who needs 20 years of covered service to retire at age 50, four years of military time can increase the annuity calculation but does not count toward that covered-service threshold.

For FERS, the deposit is 3% of military basic pay for service through 1998 and from 2001 onward, 3.25% for 1999 service, and 3.4% for 2000 service, plus interest at variable Treasury rates. The interest accrual makes early action the financially smart move — the longer you wait, the more the deposit costs.

What Counts and What Does Not

Creditable military service includes active duty time under honorable conditions. Reserve and National Guard time counts only for periods of active duty (including active duty for training under certain conditions), not for weekend drills or inactive duty training alone.

The military buyback adds to your total creditable service for annuity computation, but it does not count as 6(c) covered service and cannot be used to meet the 20-year or 25-year firefighter retirement thresholds.

This means your military years accrue at the standard 1.0% rate (or 1.1% if you retire at age 62 with 20+ years total service), not the enhanced 1.7% firefighter rate. They still increase your total annuity, but at the lower multiplier.

The Deposit Process

1. Obtain your DD-214: You need a copy of your DD-214 (Certificate of Release or Discharge from Active Duty) for each period of military service you want to credit. If you have lost your copy, request one from the National Personnel Records Center.

2. Request estimated earnings: Your agency HR office will use your DD-214 to request your military earnings records from the Defense Finance and Accounting Service (DFAS). DFAS provides a certified record of your military basic pay for each service period.

3. Calculate the deposit: HR computes the deposit using the rate for each service period plus interest. You will receive a billing statement showing the total amount owed.

4. Make the payment: You can pay in a lump sum or through payroll deductions. Payments go to OPM through your agency's payroll system or directly through Pay.gov. Complete the deposit through your agency before final separation from federal service; post-1956 military service generally will not be credited if the deposit is unpaid when you separate.

Interest and the Cost of Waiting

For FERS military deposits, OPM provides a two-year interest-free period. Interest generally starts two years after entry into FERS-covered service, or two years after returning to covered service if the military service came later; for employees first employed before January 1, 1987, interest started January 1, 1989. Interest is assessed at variable Treasury rates and compounded annually. Four years of service at the 3% rate with $40,000 in military basic pay per year would have $4,800 in principal and could cost $7,000 or more after 15 years, depending on the rates.

If you are early in your federal firefighting career, making the deposit now — even through small payroll deductions — locks in a lower total cost.

The Social Security Interaction

If you are receiving or will receive a military retirement pension (as opposed to just having completed a period of active duty), there is an additional consideration. Under FERS rules, you can credit military service toward your FERS retirement only if you waive your military retired pay when you retire. Exceptions apply to certain combat-related disability retired pay and reserve-component retired pay under 10 U.S.C. Chapter 1223.

For most firefighters who served a single enlistment and then entered federal civilian service, this does not apply — you are not receiving military retired pay. If you completed 20 years of active military service and draw a military pension, the waiver requirement may apply, subject to the statutory exceptions above.

The Federal Firefighter Retirement Guide includes the complete military buyback calculation method, Pay.gov payment instructions, and a cost comparison showing how interest accumulation affects the total deposit at different career stages.

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