Redeposit FERS Refund After Returning
You Can Undo an SF 3106 Refund — But It Gets Expensive
If you previously took a refund of your FERS retirement contributions via SF 3106 and later return to a federal position covered by FERS, you have the option to redeposit the money. Completing the redeposit restores that prior service in your annuity calculation. Leaving it unpaid doesn't erase the service from your record — it just reduces your pension.
What the Refund Did to Your Record
The refund removes the service from your annuity calculation unless you complete a redeposit. When you return to federal service, the refunded service still counts toward eligibility — meeting the 5-year vesting threshold, the 10-year MRA+10 threshold, or the 20-year age-60 unreduced requirement.
What it doesn't count toward without a redeposit is the annuity calculation. The formula (1.0% × High-3 × years of creditable service) won't include the refunded service years unless you pay the money back.
The Redeposit Formula
The redeposit amount equals your original refund plus compound interest from the date the refund was issued until the date you pay in full. Interest accrues at variable market rates set annually based on Treasury securities yields.
The longer the period between the refund and full repayment, the more compound interest can increase the redeposit amount. OPM calculates the exact amount when you initiate the process through your new agency's HR office. You can pay in a lump sum or through payroll deductions — but the full amount must be paid before OPM completes your retirement adjudication. An unpaid redeposit does not restore those years in the annuity calculation.
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When the Redeposit Makes Financial Sense
The math depends on how many years of prior service the redeposit would restore and how close you are to retirement.
Say you're 52, returning to federal service with 8 previously refunded FERS years, and plan to stay until 62. Without the redeposit, your annuity uses only the new years of service. With it, your annuity calculation includes all years.
If your eventual High-3 is $100,000: those 8 restored years add $8,000 per year to your annuity for life. A redeposit cost of $9,000 (original refund plus interest) pays for itself in roughly 13 months of retirement. After that, every additional year of pension is pure gain.
The longer your expected retirement, the more clearly the redeposit wins. For someone returning at 55 who plans only 5 more years of service, the restored years still add significantly to the annuity — and FERS pensions come with cost-of-living adjustments, compounding the value.
The Process
- Contact your new agency's HR/payroll office and request a redeposit calculation
- HR sends the request to OPM, which calculates the exact amount owed (original refund plus compound interest to the payment date)
- Choose lump-sum payment or payroll deduction; ask your agency which options are available
- Complete payment before your retirement application is adjudicated
After returning to FERS-covered service, request the redeposit through your agency. If you separate again before finishing payment, you can still complete the redeposit before OPM finishes processing a later deferred annuity claim. The prior service is included in the annuity calculation only after the full amount is paid.
Your Contribution Tier May Change
If your original FERS coverage was at the 0.8% contribution rate (hired before 2013) and you return after having 5+ years of prior creditable service before January 1, 2013, you keep the original 0.8% rate. If your prior service didn't reach 5 years before that date and you're rehired after 2013, you'll be placed in FERS-RAE (3.1%) or FERS-FRAE (4.4%) depending on your rehire date. This doesn't affect the redeposit calculation — it affects your ongoing payroll deductions.
The Leaving Federal Service Early guide covers the full redeposit analysis alongside the initial refund decision, so you can evaluate the risk before taking the money out in the first place.
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