Your service to your country doesn't have to end when you hang up your uniform. Joining the federal civil service is a great way to continue serving your country while earning a respectable living and valuable retirement benefits. And if you formerly served on active duty, your military service can provide you with additional benefits under the Federal Employees Retirement System (FERS).
These benefits can be incredibly valuable and can help you earn a more lucrative FERS retirement. The best part is that you may be able to apply your active-duty service time toward both a Guard/Reserve retirement and FERS retirement. Unfortunately, federal law prohibits counting your military time toward both an active-duty retirement pension and a FERS retirement pension.
Let's take a look at some of the more valuable benefits of transitioning into the civil service after leaving active duty.
1. Veterans Preference Points
In some circumstances, certain veterans are given hiring preference over non-veterans through Veterans Preference Points.
"By law (Title 5 USC, Section 2108), veterans who are disabled or who serve on active duty in the Armed Forces during certain specified time periods or in military campaigns are entitled to preference over non-veterans both in Federal hiring practices and in retention during reductions in force (RIF)."
This doesn't mean that veterans will always be hired for all available job openings. The veteran must still apply for the job, interview and be qualified before being hired. But all things being equal, Veterans Preference Points can help veterans get hired faster.
2. Buying Military Service Credits
Veterans with active-duty service time may be eligible to buy military service credits after they join the civil service. Buying military service credits allows you to apply your military time toward the FERS pension system and gain other benefits. Each year of military service that you buy back is applied on a one-to-one basis toward your FERS retirement. This equates to an earlier retirement and increased FERS pension.
You can buy your military service credits at a rate of 3% of your active-duty base pay at the time you served, not your final pay grade, with the exception of military service during 1999-2000, which has a slightly higher buyback rate (more info).
Buying service credits works in your favor, since your early military years are generally the lower-paying portion of your career. The FERS retirement is based on the average of your high-three years of pay, which are typically your highest-earning years of service.
This allows you to buy retirement credits based on your lowest years of pay and receive retirement benefits on your highest years of pay.
*Note: You can receive dual credit for the same period of service if you retire from the Guard/Reserve and the FERS system. However, you cannot receive credit for the same periods of service if you receive an active-duty military retirement pension and a FERS pension. That said, there can be additional benefits for active-duty retirees who served in named conflicts. Read this article for more information or speak with your human resources department if you are retired from active duty.
3. Increased Leave Accrual
Buying your military service may give you an immediate 50% to 100% increase in your leave accrual rate.
Veterans who buy back their military service credits will see a change in their Service Computation Date for Leave. Under the FERS system, employees' leave dates are based on the date they entered federal civil service. Buying your military service credits changes your service computation date in your favor, allowing you to accrue leave at a high rate upon entering the FERS system.
For example, members under the FERS system accrue four hours of annual leave per two-week pay period for their first three years of service. FERS employees with between three and 15 years of service earn six hours of leave per two-week pay period. And they earn eight hours of leave with 15+ years of service.
If you buy back four years of military service, you will be bumped up to the level where you accrue six hours of leave every two weeks instead of getting only four hours of leave every two weeks.
4. Additional Protections Against Reductions in Force (RIF)
Buying your military service credits can also change your Service Computation Date for Reduction in Force (SCD RIF date).
From time to time, the federal civil service may go through involuntary Reductions in Force in order to meet budgetary guidelines, end-force numbers or other targets. In short, some members will involuntarily lose their jobs.
These decisions are complicated, but one of the factors is the employee's SCD RIF date. Buying your military service credits gives you more seniority as it applies to Reductions in Force.
5. Potential to Earn Retirement Earlier
The FERS retirement system can be complex, and a full overview is outside the scope of this article. So we will provide a brief overview and show how your military service can help you achieve full retirement earlier than those who join the civil service without prior military service.
There are several classifications of FERS retirement that impact how and when you can collect your retirement benefits. These are immediate retirement, early retirement or deferred retirement.
Each of these has different requirements based on when you joined the FERS system, your number of years of service, your age at retirement and other factors.
FERS members must serve a minimum of five years in the civil service to be eligible for any FERS retirement benefits.
The most important factor for former military members to know is that each year of military service credits you buy back adds a year of service credit to your FERS retirement benefits.
Once you have your five years of creditable federal service, your military service credits can help you reach the various retirement milestones more quickly. And of course, each year of additional service increases your FERS pension.
See this article for a full overview of FERS retirement eligibility and when FERS members can receive a deferred annuity.
In summary, the federal civil service can be a great career opportunity for former active-duty military members, especially those who go on to serve in a dual-status role as a technician and a drilling member of the Guard or Reserve. The latter career choice allows these members to apply their active-duty service toward two retirement plans, something you will be hard-pressed to find anywhere else.
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