CSRS Civil Service

Retirement 

System 

Retirement 

Facts 

10 

Voluntary 

Contributions 

Under the 

Civil Service 

Retirement 

System 

United States 

Office of 

Personnel 

Management 

Retirement and 

Insurance 

Service 

Previous edition is usable 

RI 83-10 

Revised April 1998 
Additional retirement information and all 

publications of the U.S. Office of Personnel 

Management listed in this pamphlet are available 

on the Internet. 

OPM Website — http://www.opm.gov/asd 
Table of Contents 

Page 

Introduction ............................................................1
 

Eligibility................................................................1
 

Amount of Additional Annuity ..............................1
 

Interest....................................................................2
 

Limitations on Voluntary
 

Contributions.....................................................3
 

Refund of Voluntary Contributions .......................3
 

Federal Taxation of Voluntary
 

Contributions.....................................................3
 

Expediting Refunds of Voluntary
 

Contributions.................................................... 4
 

Application Form and Payments ............................4
 

Additional Information...........................................5
 

i 
Introduction 

The pamphlet contains general information about 

voluntary contributions. For more detailed information, you should contact your current employing 

or personnel office. 

Eligibility 

If you are an employee covered by the Civil Service Retirement System (CSRS) or the CSRS Offset 

provisions and you want to receive a larger annuity 

than would be payable based on your service and 

“high-3,” you may establish a voluntary contribution account to purchase additional annuity. However, if you owe a deposit or redeposit for civilian 

service that wasn’t covered by retirement or for 

which you received a refund, you will be eligible 

to make voluntary contributions only after the 

deposit or redeposit is paid. Also, if you previously 

made voluntary contributions and received a 

refund of those contributions, you may not make 

voluntary contributions again, unless you had a 

break in service after receiving the refund. 

If you are covered by the Federal Employees 

Retirement System (FERS), you are not eligible to 

make voluntary contributions. You may, however, 

retain funds on account that you deposited while 

subject to the CSRS. 

Amount of Additional Annuity 

At retirement, each $100 in your voluntary contributions account (including interest earned) will 

provide an additional annuity of $7 a year, plus 20 

cents for each full year you are over age 55 at the 

time you retire. You may also choose to share the 

additional annuity by electing to provide a survivor 

annuity. However, your additional annuity would 

then be reduced by 10 to 40 percent depending on 

the difference between your age and the age of the 

person designated to receive the survivor annuity. 

1 
Any person, related or unrelated to you, may be 

designated, and need not be the same person for 

whom regular survivor annuity benefits were 

elected. 

Note: Voluntary contributions annuities are not 

increased by cost of living increases. 

Interest 

Voluntary contributions earn a variable interest 

rate determined by the Treasury Department each 

calendar year, based on the average yield of new 

investments purchased by the Retirement Fund 

during the previous fiscal year. The interest credited to each voluntary contributions account is 

compounded annually on December 31. 

Interest accrues to the date of the refund calculation, separation (including retirement), or transfer 

to a position not subject to CSRS or Federal 

Employees Retirement System, whichever is earliest. If you expect to be leaving Federal service, 

you can avoid having a period of time during 

which your funds are not earning interest by planning ahead. Use the expedited procedure described 

later in this pamphlet. 

If you separate from Federal service with entitlement to a deferred annuity at age 62, interest continues to accrue to the beginning date of your 

annuity or death, whichever is earlier. However, if 

you separate from Federal service with entitlement 

to a deferred annuity at age 62 and request a 

refund of your voluntary contribution account, 

interest will only be paid to the date of your separation regardless of whether you receive a deferred 

annuity. 

2 
Limitations on Voluntary 

Contributions 

Voluntary contributions may be made only in 

amounts of $25 or in multiples of $25 ($50, $75, 

etc.). Total contributions may not exceed 10 percent of the total basic pay you received during all 

of your Federal service. The 10 percent limit test 

applies at each point of time that a deposit is made 

and is not based upon a projection of life-time 

earnings. 

Refund of Voluntary Contributions 

You may withdraw all voluntary contributions 

with interest at any time before receiving an annuity based on those contributions. If you die while 

still in Federal service (or after leaving but before 

you begin to receive annuity benefits), the voluntary contributions account, plus interest, will be 

paid to your survivors as a lump-sum payment. 

Please see the information on expediting refunds 

of voluntary contributions below. 

If you die after retirement, but before having 

received additional annuity payments equal to your 

voluntary contributions plus interest, the difference 

will be paid either as a lump sum or in additional 

survivor annuity payments, depending upon your 

election at retirement. 

Federal Taxation of Voluntary 

Contributions 

If you take a refund of voluntary contributions, any 

accrued interest is taxable in the tax year in which 

you receive it. In addition, if you receive the 

refund before you reach age 591⁄2, the interest portion of the refund is subject to an additional 10 percent early distribution tax. 

3 
Payments to survivors are not subject to the 10 

percent tax. To determine whether the 10 percent 

tax applies, you should get the Internal Revenue 

Service Form 5329 (and instructions) from your 

local Internal Revenue Service office. The interest 

portion of the refund is eligible for rollover treatment. 

If you will receive an additional annuity as a result 

of your voluntary contributions, it will be taxed 

under the “General Rule.” Please refer to IRS Publication 721 — “Comprehensive Tax Guide to U.S. 

Civil Service Benefits” for further information or 

call IRS at (800) 829-3676. 

Expediting Refunds of Voluntary 

Contributions 

You can elect to roll over the interest to an Individual Retirement Account (IRA), or other qualified 

retirement plan, to defer income tax. To expedite 

payment, you may submit your rollover election 

with your refund request. Complete a Voluntary 

Contributions Election form, RI 38-124 and send it 

directly to the U.S. Office of Personnel Management (OPM) to the address given on the form. 

Contact your agency personnel office to obtain this 

form, and the explanation form RI 38-125, Voluntary Contributions Notice. Since interest accrual 

generally stops at separation, if you are retiring 

you should submit your refund request to OPM at 

least 60 days before retirement. 

Application Form and Payments 

If you want to make voluntary contributions, you 

must file a Standard Form 2804 (Application to 

Make Voluntary Contributions) with your agency 

personnel office. After the application is forwarded 

to the U.S. Office of Personnel Management 

(OPM) by your agency and approved, OPM will 

assign you an account number, and send instructions for making contributions. 

4 
Do not send money with your application. Contributions will not be accepted until the application is 

approved. OPM will not approve an application 

from you if (1) you have not deposited amounts 

covering all civilian service, or (2) you have previously received a refund of voluntary contributions, 

unless you were separated for more than 3 calendar 

days, and were again employed under the Civil 

Service Retirement System after the refund was 

paid. 

Additional Information 

You may obtain copies of the pamphlets listed 

below from your personnel office, from OPM’s 

Website (http://www.opm.gov/asd), or from OPM 

ONLINE (OPM’s electronic bulletin board) at 

202-606-4800. To access OPM ONLINE, your 

communications software should be set to the following: 

Baud: Up to 28,800
 

Parity: None
 

Data bits: 8
 

Stop bit: 1
 

The pamphlets in the Retirement Facts Series, 

which provide more detailed information about the 

Civil Service Retirement System (CSRS), are: 

	 Retirement Facts #1 - The Civil Service 

Retirement System (RI 83-1) 

	 Retirement Facts #2 - Military Service Credit 

Under the Civil Service Retirement System 

(RI 83-2) 

	 Retirement Facts #3 - Deposits and Redeposits 

Under the Civil Service Retirement System 

(RI 83-3) 

	 Retirement Facts #4 - Disability Retirement 

Under the Civil Service Retirement System 

(RI 83-4) 

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�	 Retirement Facts #5 - Survivor Benefits 

Under the Civil Service Retirement System 

(RI 83-5) 

	 Retirement Facts #6 - Early Retirement 

Under the Civil Service Retirement System 

(RI 83-6) 

	 Retirement Facts #7 - Computing Retirement 

Benefits Under the Civil Service Retirement 

System (RI 83-7) 

	 Retirement Facts #8 - Credit for Unused Sick 

Leave Under the Civil Service Retirement 

System (RI 83-8) 

	 Retirement Facts #9 - Refunds Under the Civil 

Service Retirement System (RI 83-9) 

	 Retirement Facts #10 - Voluntary Contributions Under the Civil Service Retirement 

System (RI 83-10) 

	 Retirement Facts #11 - Information for 

Separating Civil Service Retirement System 

Employees Who Are Not Eligible for an 

Immediate Annuity (RI 83-13) 

	 Retirement Facts #12 - Information About 

Reemployment for Civil Service Retirement 

System Annuitants (RI 83-18) 

	 Retirement Facts #13 - CSRS Offset 

Retirement (RI 83-19) 

	 Retirement Facts #14 - Law Enforcement and 

Firefighter Civil Service Retirement System 

Retirement (RI 83-20) 

Pamphlets applicable to employees in both the 

Civil Service Retirement System and Federal 

Employees Retirement System are: 

	 Court-Ordered Benefits for Former Spouses 

(RI 84-1) 

	 Work-Related Injuries and Fatalities — What 

You and Your Family Need to Know About 

Your Benefits (RI 84-2) 

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�	 Life Events and Your Retirement and 

Insurance Benefits (For Employees) 

(RI 84-3) 

Thinking About Retirement? (RI 83-11) 

Publications for employees who are under the 

Federal Employees Retirement System (FERS) 

are: 

	 FERS Brochure (An Overview of Your Benefits) 

(RI 90-1) 

	 FERS Facts #1 - Information for Separating 

FERS Employees Who Are Not Eligible for an 

Immediate Annuity (RI 90-11) 

	 FERS Facts #2 - Information About 

Reemployment for FERS Annuitants 

(RI 90-18) 

For employees who are eligible to transfer to the 

FERS: 

	 FERS Transfer Handbook (A Guide to 

Making Your Decision) (RI 90-3) 

Pamphlets on the Federal Employees Health and 

Life Insurance Programs are: 

	 Federal Employees Health Benefits Guide 

(RI 70-1) 

	 Temporary Continuation of Coverage (TCC) 

under the Federal Employees Health 

Benefits Program (RI 79-27) 

	 Federal Employees Group Life Booklet 

(RI 76-21) 

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