ATTACHMENT 1

RETIREMENT COVERAGE ERROR CORRECTION

Correcting Erroneous FERS Coverage 

BAL 02-103 Erroneous FERS Coverage in Effect for Less than 3 Years 

May 7, 2002 
BAL 02-103 May 7, 2002 

Attachment 1 Page 2 

ATTACHMENT 1—CORRECTING ERRONEOUS FERS COVERAGE 

TABLE OF CONTENTS 

 Page 

STEP 1 --Review coverage determination to decide if employee 

is in the correct retirement plan.................................................................. 3 

STEP 2 —Determine how long the employee was erroneously covered by FERS... 3 

STEP 3 —If the erroneous FERS coverage lasted for 3 years 

of service or more......................................................................................... 3 

STEP 4 —Determine whether the employee should have had a FERS 

election opportunity.................................................................................. 3-4 

STEP 5 —Determine whether the employee can be deemed to have 

elected FERS with an opportunity to decline FERS coverage................ 4 

 STEP 5.A.—If the employee would not have had a FERS election 

opportunity and the erroneous FERS coverage 

lasted for less than 3 years of service.............................................. 4-7 

 STEP 5.B.—If the employee would have had a FERS 

election opportunity and the erroneous FERS 

coverage lasted for less than 6 months......................................... 8 

STEP 5.C.—If the employee would have had a FERS election opportunity 

and the error lasted for less than 3 years of service 

(not within the 6-month election opportunity)................................... 9 

STEP 6 —Provide the employee with written notice of the 

opportunity to decline FERS coverage..................................................... 9 

STEP 7 –Counsel employees regarding the election opportunity............................ 9 

STEP 8 —Process the election.................................................................................... 10 

STEP 8.A.—If the employee elects to remain in FERS ....................................... 10-11 

STEP 8.B.—If the employee declines FERS in favor of CSRS Offset................. 11-13 

STEP 8.C.—If the employee declines FERS in favor of CSRS............................ 13-16 

STEP 8.D.—If the employee declines FERS in favor of 

Social Security (FICA)-only.............................................................. 16-17 

STEP 8.E.—If the employee does not return the election form 

by the due date or request an extension of the deadline.................. 17-19 
BAL 02-103 May 7, 2002 

Attachment 1 Page 3 

Correcting Erroneous FERS Coverage 

STEP PROCEDURE

1. Review coverage 

determination to 

decide if employee 

is in the correct 

retirement plan: 

Refer to the CSRS & FERS Handbook for Personnel and Payroll 

Offices (www.opm.gov/asd/htm/HOD.htm) for information about making 

retirement coverage determinations. 

Chapter 10 contains the rules for determining whether an employee is 

covered by the Federal Employees Retirement System (FERS) or the 

Civil Service Retirement System (CSRS). Chapter 10 also contains 

rules to determine whether an employee with CSRS coverage has 

regular CSRS coverage or CSRS Offset coverage. See also Chapter 

12, Special Coverage Rules. Chapter 11 explains the circumstances 

under which employees may elect FERS coverage. 

If you need help determining whether an employee is in the correct 

retirement system, contact your headquarters level benefits officer. A 

listing of all benefits officers is available at 

www.opm.gov/asd/htm/rc.htm. If you are a benefits officer and need 

assistance with a coverage determination, contact the Benefits Officers 

Resource Center. 

2. Determine how 

long the employee 

was erroneously 

covered by FERS: 

If the employee has been continuously employed with erroneous FERS 

coverage, subtract the effective date of the Personnel Action that first 

erroneously put the employee in FERS from today’s date. Note that 

the first action that erroneously put the employee in FERS may have 

been done at another agency. 

If there are breaks in service, you will need to compute the total time for 

each service period that was erroneously subject to FERS coverage. 

3. If the erroneous 

FERS coverage 

lasted for 3 years 

of service or 

more: 

The error correction is subject to the Federal Erroneous Retirement 

Coverage Corrections Act (FERCCA). Do not correct the error at 

this time. Notify the employee of the error (see Attachment 2 of this 

BAL for a sample notice) and enter the employee’s name and other 

information in the FERCCA File Database at https://www.fedestatement.com/fercca/fercca. Tell the employee that OPM will contact 

him or her and provide detailed information about the choices available.

4. Determine whether 

the employee 

should have had a 

FERS election 

opportunity: 

Look at the service history while the employee was erroneously in 

FERS. You need to determine if the employee would have had a 6-

month FERS election opportunity if the employee had been put in the 

correct retirement plan (CSRS, CSRS Offset, or Social Security (FICA)-

Only). 

An election of FERS coverage may be made by employees (including 

reemployed annuitants) who are reemployed after a break in service of 

more than 3 days, and: 

 Who are covered (or should be covered) by CSRS, including 
BAL 02-103 May 7, 2002 

Attachment 1 Page 4 

Correcting Erroneous FERS Coverage 

STEP PROCEDURE

4. Determine whether 

the employee 

should have had a 

FERS election 

opportunity: 

(continued)

CSRS Offset; or 

 Whose appointment is excluded from CSRS coverage but not 

from FERS coverage (for example, term appointments and 

certain indefinite appointments). 

An election of FERS coverage may also be made by employees who: 

 Convert from appointments excluded from FERS coverage 

(such as temporary appointments not to exceed 1 year) to 

appointments that are not excluded and who do not 

automatically have FERS coverage upon conversion; or 

 Become eligible for Social Security coverage; or 

 Enter a senior official position with mandatory Social Security 

coverage (see Handbook Chapter 101 for additional 

information). 

Caution: An employee has only one opportunity to elect FERS during 

continuous service. For example, an employee returns to work under a 

Term appointment under Social Security (FICA)-only and has an 

opportunity to elect FERS. The employee receives an excepted 

appointment 3 years later, with no break in service, and the coverage is 

CSRS Offset. The employee does not have another opportunity to 

elect FERS with the excepted appointment. 

5. Determine whether 

the employee can 

be deemed to 

have elected FERS 

with an 

opportunity to 

decline FERS 

coverage: 

If the employee would not have had a FERS election opportunity and 

the erroneous FERS coverage lasted for less than 3 years, go to Step 

5.A. 

If the employee would have had a FERS election opportunity and the 

erroneous FERS coverage lasted for less than 6 months, go to Step 

5.B. 

If the employee would have had a FERS election opportunity and the 

erroneous FERS coverage lasted for less than 3 years, go to Step 5.C. 

5.A. If the employee 

would not have 

had a FERS 

election 

opportunity and 

the erroneous 

FERS coverage 

lasted for less 

than 3 years of 

service: 

Correct the erroneous FERS coverage to the appropriate retirement 

system (CSRS, CSRS Offset, or Social Security (FICA)-Only) 

retroactive to the effective date of the error. The employee does not 

have an opportunity to choose to remain in FERS. Notify the 

employee of the error and of the correct retirement coverage. 

• Correct the personnel records. If the erroneous FERS coverage 

occurred with an appointment or conversion to appointment action, 

prepare an 002/Correction action effective on the original 

appointment or conversion to appointment date. 

 Show the correct retirement code in block 30 (1, 2, 6, C, or 

E). 

 Include remark C11 as follows: “Corrects item (number) from 
BAL 02-103 May 7, 2002 

Attachment 1 Page 5 

Correcting Erroneous FERS Coverage 

STEP PROCEDURE

5.A. If the employee 

would not have 

had a FERS 

election 

opportunity and 

the erroneous 

FERS coverage 

lasted for less 

than 3 years of 

service: 

(continued)

(K, L, M, or N).”

Prepare another 002/Correction action if there are any other actions 

during the appointment showing incorrect FERS coverage. Correct 

the most recent action during the appointment on which the 

erroneous FERS coverage appears, showing the correct retirement 

code in block 30. Include remarks C11: “Corrects item (number) 

from (K, L, M, or N)” and C12: “Also corrects same item on all 

previous actions from (date) to (date).” If there are multiple periods 

of service that were erroneously subject to FERS, you need to 

correct each period. Refer to the Guide to Processing Personnel 

Actions at www.opm.gov/feddata/persdoc.htm for additional 

assistance in preparing personnel actions. 

• Service Credit. If the employee later becomes subject to 

retirement coverage, any post-1956 military service or civilian 

service performed before the date of erroneous FERS coverage 

that becomes subject to CSRS deposit or redeposit rules may be 

considered paid by actuarial reduction. 

If the employee has any such service performed before the 

erroneous FERS coverage, you need to document the employee’s 

records to show that the employee was erroneously put in FERS 

and is eligible for the actuarial reduction. The documentation is 

necessary so that you can identify when the actuarial reduction 

applies and advise the employee during benefits counseling. 

Additionally, you need to be able to notify OPM that the employee 

was erroneously placed in FERS and is eligible for the actuarial 

reduction whenever the employee files an application for deposit 

and/or retirement. 

• Correct the Employee Retirement Withholdings. If the correct 

coverage is CSRS, the employee owes additional retirement 

deductions for CSRS coverage and has overpaid Social Security’s 

Old-Age, Survivors, and Disability Insurance (OASDI) tax. The 

additional retirement deductions can be recovered (in whole or in 

part) from the overpaid OASDI taxes. If the correct coverage is 

CSRS Offset, the employee owes additional monies for retirement 

deductions only if the basic pay is more than the taxable maximum 

for the OASDI contribution and benefit base. (See 

www.ssa.gov/OACT/COLA/CBB.html for the OASDI contribution 

and benefit base amounts.) The agency is responsible for paying 

the correct amount of retirement withholdings to OPM. If the 

amount of retirement withholdings owed exceeds the amount of 
BAL 02-103 May 7, 2002 

Attachment 1 Page 6 

Correcting Erroneous FERS Coverage 

STEP PROCEDURE

5.A. If the employee 

would not have 

had a FERS 

election 

opportunity and 

the erroneous 

FERS coverage 

lasted for less 

than 3 years of 

service: 

(continued) 

OASDI taxes withheld, the difference is an overpayment of salary to 

the employee. Overpayments of salary are subject to your agency’s 

regulations governing the collection of debts (see 5 CFR 550.1104). 

If the correct coverage is Social Security (FICA)-Only, the 

employee is entitled to receive the retirement deductions withheld 

from salary. The employing agency is responsible for returning the 

retirement deductions it withheld from the employee’s pay. 

• Correct the Agency Retirement Contributions. If the correct 

coverage is CSRS or CSRS Offset, the agency has overpaid 

agency retirement contributions. You must make adjustments to 

credit the appropriate amount of agency CSRS contributions. 

If the correct coverage is Social Security (FICA)-Only, the agency 

has overpaid agency retirement contributions. You may recover 

the agency FERS contributions. 

• RITS reporting. Agency payroll offices must compute the amount 

that should have been remitted to OPM for the correct retirement 

coverage. If the correct retirement coverage is CSRS or CSRS 

Offset, adjust the amounts that have been remitted to OPM by 

reducing FERS agency contributions and employee withholdings 

and increasing CSRS agency contributions and employee 

withholdings on a subsequent RITS submission. 

If the correct retirement coverage is Social Security (FICA)-Only, 

adjust the amounts that have been remitted to OPM by reducing 

FERS contributions and employee withholdings on a subsequent 

RITS submission. 

• Correct the Individual Retirement Record (IRR). When the 

employee separates (or the IRR is otherwise created), an SF 2806, 

not an SF 3100, must be created if the correct coverage is CSRS or 

CSRS Offset. If a hard-copy SF 3100 has already been created 

and submitted to OPM, it must be voided. 

If the correct coverage is Social Security (FICA)-Only, you need to 

void the SF 3100, if created. Do not separate the IRR to OPM. 

• Correct the Social Security records. No adjustments are 

necessary unless the coverage is corrected to CSRS. 
BAL 02-103 May 7, 2002 

Attachment 1 Page 7 

Correcting Erroneous FERS Coverage 

STEP PROCEDURE

5.A. If the employee 

would not have 

had a FERS 

election 

opportunity and 

the erroneous 

FERS coverage 

lasted for less 

than 3 years of 

service: 

(continued

If the correct coverage is CSRS, you need to determine whether 

you can recover some or all of the Old-Age, Survivors, and 

Disability Insurance (OASDI) taxes withheld from the employee. 

You can recover OASDI taxes erroneously paid for a given year up 

to 3 years after that year’s filing deadline. For example, the filing 

deadline for tax year 1999 was April 17, 2000. You can recover 

OASDI taxes that were erroneously paid in calendar year 1999 up 

to April 17, 2003. 

Recover the OASDI taxes erroneously paid for each year that you 

are permitted to recover by completing IRS form 941c. See 

www.irs.gov/pub/irs-pdf/f941c.pdf for instructions on completing 

form 941c. Recover both the employee and employer OASDI 

taxes. You should refund to the employee any recovered OASDI 

taxes that are not needed to pay the employee’s CSRS retirement 

withholdings. 

For each calendar year that you were permitted to recover 

erroneous OASDI tax, complete and submit a form W-2c, 

Corrected Wage and Tax Statement, showing the employee’s 

Social Security wages to be $0.00. Note that although the 

Medicare wages are not being changed, you must indicate what 

was previously reported for Medicare and indicate that same 

amount as being the correct information. See www.irs.gov/pub/irspdf/fw2c.pdf for instructions on completing form W-2c. 

• Correct the TSP records. Correct TSP eligibility prospectively to 

show the correct status. Obtain a new TSP Election Form (TSP-1) 

or reduce employee contribution to the maximum CSRS limit if the 

correct coverage is CSRS or CSRS Offset. If the correct coverage 

is Social Security (FICA)-only, future TSP contributions stop. 

You need to remove the Agency Automatic (1%) and any Agency 

Matching Contributions, plus associated earnings, from the 

employee’s TSP account. Do not remove employee contributions 

unless the employee chooses to have the contributions refunded. 

Refer to Attachment 4 of this BAL for more specific instructions on 

TSP adjustments. See also www.tsp.gov/bulletins/index.html for 

additional information. 
BAL 02-103 May 7, 2002 

Attachment 1 Page 8 

Correcting Erroneous FERS Coverage 

STEP PROCEDURE

5.B. If the employee 

would have had 

a FERS election 

opportunity and 

the erroneous 

FERS coverage 

lasted for less 

than 6 months: 

In this scenario, the erroneous FERS coverage is discovered during the 

time that the employee would otherwise be eligible to elect FERS (i.e., 

during the first 6 months of employment following a break in service). 

Correct the erroneous FERS coverage to the proper retirement system 

(CSRS, CSRS Offset, or Social Security (FICA)-Only) retroactive to the 

effective date of the error. Follow the instructions in Step 5.A. to 

correct the retirement coverage error. 

In addition to correcting the error, notify the employee of the FERS 

election opportunity. Provide the employee with the Election of 

Coverage form (Standard Form 3109) and the appropriate FERS 

Transfer Handbook (RI 90-3 if the correct coverage is CSRS, or RI 90-

3-Offset if the correct coverage is CSRS Offset). 

The employee’s opportunity to elect FERS is based on the date of the 

event that permits an election (appointment, transfer, conversion, etc.) 

and not on the date you notify the employee of the election opportunity. 

Agencies have the authority to accept a belated FERS election during 

the 6-month period following the expiration of the employee’s initial 6-

month election opportunity. Agencies should exercise their authority to 

allow the employee 6 months to make his or her election. However, in 

no case may an agency extend the deadline beyond the 1-year from 

the date of the event permitting the election opportunity. 

If the employee elects FERS coverage, the effective date of the 

election is the first day of the pay period after the valid election is 

received by the agency. The election is not retroactive. The FERS 

election should be processed just as any other FERS election made by 

an employee with no retirement coverage error. 
BAL 02-103 May 7, 2002 

Attachment 1 Page 9 

Correcting Erroneous FERS Coverage 

STEP PROCEDURE

5.C. If the employee 

would have had 

a FERS election 

opportunity and 

the error lasted 

for less than 3 

years of service 

(not within the 6-

month election 

opportunity): 

Add 75 days to the total time the employee was erroneously covered 

by FERS. The 75 days gives you 15 days to get the notice to the 

employee and also allows for the 60-day time limit the employee has to 

make a decision. If you think it will take more than 15 days to notify the 

employee, adjust the time accordingly. 

If after adding 75 days the total time is 3 years or more, then do not 

correct the error at this time. The error correction is subject to the 

Federal Erroneous Retirement Coverage Corrections Act (FERCCA). 

Notify the employee of the error (see Attachment 2 of this BAL for a 

sample notice) and enter the employee’s name and other information in 

the FERCCA File Database at https://www.fedestatement.com/fercca/fercca. Tell the employee that OPM will contact 

him or her and provide detailed information about the choices available.

If after adding 75 days the total time is less than 3 years, you need to 

notify the employee of the error and provide the employee with an 

opportunity to decline FERS coverage. See step 6 for additional 

instructions. 

6. Provide the 

employee with 

written notice of 

the opportunity to 

decline FERS 

coverage: 

Only proceed with steps 6-8 if the total time of erroneous FERS 

coverage is less than 3 years and the employee would have had a 

FERS election opportunity. 

Use the model notice in Attachment 3 of this BAL to notify the 

employee of the error and election opportunity. Also give the employee 

Standard Form 3109, Election of FERS, and a copy of the appropriate 

***“Error Handbook”*** in Attachments 5 and 6 of this BAL. 

Document that the employee was given notice of the opportunity to 

decline FERS in the Official Personnel Folder. You should file copies 

of the notification letter and the SF 3109 in the employee’s Official 

Personnel Folder. 

The employee has 60 days from the date of notice to decline FERS 

coverage. The employee can request additional time if he or she 

demonstrates that an election can’t be made within the time limit due to 

causes beyond the employee’s control. See 5 CFR 

846.204(b)(2)(ii)(C). 

7. Counsel 

employees: 

Assist employees in estimating the amount of retirement, Social 

Security, and TSP benefits. Provide any other information the 

employee may need to make an election. 
BAL 02-103 May 7, 2002 

Attachment 1 Page 10 

Correcting Erroneous FERS Coverage 

STEP PROCEDURE

8. Process the 

election: 

 Go to step 8.A. if the employee decides to stay in FERS. 

 Go to step 8.B. if the employee chooses CSRS Offset. 

 Go to step 8.C. if the employee chooses CSRS. 

 Go to step 8.D. if the employee chooses Social Security (FICA)-

only. 

 Go to step 8.E. if the employee fails to return the election form. 

8.A. If the employee 

elects to remain 

in FERS: 

• Correct and document the personnel records. If the erroneous 

FERS coverage occurred with an appointment or conversion to 

appointment action, prepare an 002/Correction action effective on 

the original appointment or conversion to appointment date. 

 Include remark C18 as follows: “Corrects item (number 45) 

to read: M94 - “Employee elected deemed FERS coverage 

under 5 CFR 846.204(b)(2)(i) on __________ (insert date 

employee made the election)”; and M38 - “Frozen service: 

(enter years and months)”. 

Refer to the Guide to Processing Personnel Actions at

www.opm.gov/feddata/persdoc.htm for additional assistance in 

preparing personnel actions. 

• Service Credit. Any post-1956 military service or civilian service 

performed before the date of erroneous FERS coverage that 

becomes subject to CSRS deposit or redeposit rules 

may be considered paid by actuarial reduction. 

If the employee has any such service performed before the 

erroneous FERS coverage, you need to document the employee’s 

records to show that the employee was erroneously put in FERS 

and is eligible for the actuarial reduction. The documentation is 

necessary so that you can identify when the actuarial reduction 

applies and advise the employee during benefits counseling. 

Additionally, you need to be able to notify OPM that the employee 

was erroneously placed in FERS and is eligible for the actuarial 

reduction whenever the employee files an application for deposit 

and/or retirement. 

• No RITS reporting adjustments are necessary to employee 

withholdings or agency contributions. 

• Document the Individual Retirement Record (IRR). Document 

the SF 3100, when created, to show the employee made a deemed 

election of FERS coverage. Insert the following remark in column 4 

of the SF 3100: “Employee elected deemed FERS coverage under 

5 CFR 846.204(b)(2)(i) on ________ (insert date employee made 
BAL 02-103 May 7, 2002 

Attachment 1 Page 11 

Correcting Erroneous FERS Coverage 

STEP PROCEDURE

8.A. If the employee 

elects to remain 

in FERS: 

(continued) 

election).” Also, insert the unused sick leave balance as of the 

effective date of the FERS election. Do not separate the IRR to 

OPM. 

• No adjustments are necessary to the Social Security Records. 

• Correct the TSP records. The agency needs to make up Agency 

Automatic (1%) Contributions. Because the employee now elected

FERS (rather than being automatically placed in FERS), the 

employee is immediately eligible for Agency Automatic (1%) 

contributions. Make up Agency Automatic (1%) contributions are 

due for the period beginning with the date of FERS coverage 

through the date that Agency Automatic (1%) Contributions actually 

began. The employee is also entitled to lost earnings on these 

agency contributions. 

If the earliest date the employee could have begun contributing to 

TSP changes (because the employee changed from being 

automatically put in FERS to electing FERS), you must give the 

employee an opportunity to makeup TSP contributions. The makeup period begins on the date the employee was put in FERS and 

ends on the date the employee was previously eligible to begin 

contributing to TSP. No lost earnings are payable on these 

employee make-up contributions. If the employee makes up 

contributions, the agency must also make matching contributions 

with lost earnings. NOTE: For employees hired on or after July 1, 

2000, there is no waiting period for employee participation in TSP. 

See Attachment 4 for additional TSP instructions. See also 

www.tsp.gov/bulletins/index.html for additional information. 

8.B. If the employee 

declines FERS in 

favor of CSRS 

Offset: 

• Correct and document the personnel records. If the erroneous 

FERS coverage occurred with an appointment or conversion to 

appointment action, prepare an 002/Correction action effective on 

the original appointment or conversion to appointment date. 

 Show the correct retirement code in block 30 (C or E). 

 Include remark C11 as follows: “Corrects item (number) from 

(K, L, M, or N).” 

 Include remark M96 as follows: “Employee declined deemed 

FERS coverage under 5 CFR 846.204(b)(2)(ii) on _______ 

(insert date employee made the election).”

Prepare another 002/Correction action if there are any other actions 

during the appointment showing incorrect FERS coverage. Correct 

the most recent action during the appointment on which the 
BAL 02-103 May 7, 2002 

Attachment 1 Page 12 

Correcting Erroneous FERS Coverage 

STEP PROCEDURE

8.B. If the employee 

declines FERS in 

favor of CSRS 

Offset: 

(continued) 

erroneous FERS coverage appears, showing the correct retirement 

code in block 30 (C or E). Include remarks C11 (Corrects item 

(number) from (K, L, M, or N)) and if necessary, C12 (Also corrects 

same item on all previous actions from (date) to (date)). If there are 

multiple periods of service that were erroneously subject to FERS, 

you need to correct each period. Refer to the Guide to Processing 

Personnel Actions at www.opm.gov/feddata/persdoc.htm for 

additional assistance in preparing personnel actions. 

• Service Credit. Any post-1956 military service or civilian service 

performed before the date of erroneous FERS coverage that 

becomes subject to CSRS deposit or redeposit rules 

may be considered paid by actuarial reduction. 

If the employee has any such service performed before the 

erroneous FERS coverage, you need to document the employee’s 

records to show that the employee was erroneously put in FERS 

and is eligible for the actuarial reduction. The documentation is 

necessary so that you can identify when the actuarial reduction 

applies and advise the employee during benefits counseling. 

Additionally, you need to be able to notify OPM that the employee 

was erroneously placed in FERS and is eligible for the actuarial 

reduction whenever the employee files an application for deposit 

and/or retirement. 

• Correct the Employee Retirement Withholdings. The employee 

owes additional monies for CSRS Offset withholdings only if the 

basic pay is more than the taxable maximum for the Old-Age, 

Survivors, and Disability Insurance (OASDI) tax. (See 

www.ssa.gov/OACT/COLA/CBB.html for the OASDI contribution 

and benefit base amounts.) The agency is responsible for paying 

the correct amount of retirement withholdings to OPM. If the 

amount of retirement withholdings owed exceeds the amount of 

OASDI taxes withheld, the difference is an overpayment of salary to 

the employee. Overpayments of salary are subject to your agency’s 

regulations governing the collection of debts (see 5 CFR 550.1104). 

• Correct the Agency CSRS Contributions. The agency has 

overpaid agency retirement contributions. You must make 

adjustments to credit the appropriate amount of agency CSRS 

contributions. 
BAL 02-103 May 7, 2002 

Attachment 1 Page 13 

Correcting Erroneous FERS Coverage 

STEP PROCEDURE

8.B. If the employee 

declines FERS in 

favor of CSRS 

Offset: 

(continued)

• RITS reporting. Agency payroll offices must compute the amount 

that should have been remitted to OPM for CSRS Offset coverage. 

Adjust the amounts that have been remitted to OPM by reducing 

FERS agency contributions and employee withholdings and 

increasing CSRS agency and employee withholdings on a 

subsequent RITS submission. 

• Correct the Individual Retirement Record (IRR). When the 

employee separates (or the IRR is otherwise created), an SF 2806, 

not an SF 3100, must be created. If a hard-copy SF 3100 has 

already been created and has not been submitted to OPM, it must 

be voided. Document the SF 2806 with the following statement: 

“Employee declined deemed FERS coverage under 5 CFR 

846.204(b)(2)(ii) on _______ (insert date employee made the 

election)”. 

• No adjustments are necessary to the Social Security records. 

• Correct the TSP records. Correct TSP eligibility prospectively to 

reflect the maximum contribution a CSRS employee is eligible to 

contribute. Obtain a new TSP Election Form (TSP-1) or reduce 

employee contribution to the maximum CSRS limit. 

You need to remove the Agency Automatic (1%) and any Agency 

Matching Contributions, plus associated earnings, from the 

employee’s TSP account. Do not remove any employee 

contributions unless the employee chooses to have contributions 

refunded. Refer to Attachment 4 for more specific instructions on 

TSP adjustments. See also www.tsp.gov/bulletins/index.html for 

additional information. 

8.C. If the employee 

declines FERS in 

favor of CSRS: 

• Correct and document the personnel records. If the erroneous 

FERS coverage occurred with an appointment or conversion to 

appointment action, prepare an 002/Correction action effective on 

the original appointment or conversion to appointment date. 

 Show the correct retirement code in block 30 (1 or 6). 

 Include remark C11 as follows: “Corrects item (number) from 

(K, L, M, or N).” 

 Include remark M96 as follows: “Employee declined deemed 

FERS coverage under 5 CFR 846.204(b)(2)(ii) on _____ 

(insert date employee made the election)”. 

Prepare another 002/Correction action if there are any other actions 

during the appointment showing incorrect FERS coverage. Correct 

the most recent action during the appointment on which the 
BAL 02-103 May 7, 2002 

Attachment 1 Page 14 

Correcting Erroneous FERS Coverage 

STEP PROCEDURE

8.C. If the employee 

declines FERS in 

favor of CSRS: 

(continued) 

erroneous FERS coverage appears, showing the correct retirement 

code in block 30. Include remarks C11 (Corrects item (number) 

from (K, L, M, or N.)) and if necessary, C12 (Also corrects same 

item on all previous actions from (date) to (date)). If there are 

multiple periods of service that were erroneously subject to FERS, 

you need to correct each period. Refer to the Guide to Processing 

Personnel Actions at www.opm.gov/feddata/persdoc.htm for 

additional assistance in preparing personnel actions. 

• Service Credit. Any post-1956 military service or civilian service 

performed before the date of erroneous FERS coverage that 

becomes subject to CSRS deposit or redeposit rules 

may be considered paid by actuarial reduction. 

If the employee has any such service performed before the 

erroneous FERS coverage, you need to document the employee’s 

records to show that the employee was erroneously put in FERS 

and is eligible for the actuarial reduction. The documentation is 

necessary so that you can identify when the actuarial reduction 

applies and advise the employee during benefits counseling. 

Additionally, you need to be able to notify OPM that the employee 

was erroneously placed in FERS and is eligible for the actuarial 

reduction whenever the employee files an application for deposit 

and/or retirement. 

• Correct the Employee CSRS Withholdings. The employee owes 

additional retirement deductions for CSRS coverage and has 

overpaid Old-Age, Survivors, and Disability Insurance (OASDI) 

taxes. The additional retirement deductions can be recovered (in 

whole or in part) from the overpaid OASDI taxes. Generally, the 

employee has been overpaid salary if the basic pay is more than 

the taxable maximum for the OASDI contribution and benefit base. 

See www.ssa.gov/OACT/COLA/CBB.html for the OASDI 

contribution and benefit base amounts. The agency is responsible 

for paying the correct amount of CSRS withholdings to OPM. If the 

amount of CSRS withholdings owed exceeds the amount of OASDI 

taxes withheld, the difference is an overpayment of salary to the 

employee. Overpayments of salary are subject to your agency’s 

regulations governing the collection of debts (see 5 CFR 550.1104). 

• Correct the Agency CSRS Contributions. The agency has 

overpaid agency retirement contributions. You must make 

adjustments to credit the appropriate amount of agency CSRS 
BAL 02-103 May 7, 2002 

Attachment 1 Page 15 

Correcting Erroneous FERS Coverage 

STEP PROCEDURE

8.C. If the employee 

declines FERS in 

favor of CSRS: 

(continued) 

contributions. 

• RITS reporting. Agency payroll offices must compute the amount 

that should have been remitted to OPM for CSRS coverage. Adjust 

the amounts that have been remitted to OPM by reducing FERS 

agency contributions and employee withholdings and increasing 

CSRS agency and employee withholdings on a subsequent RITS 

submission. 

• Correct the Individual Retirement Record (IRR). When the 

employee separates (or the IRR is otherwise created), a SF 2806, 

not a SF 3100, must be created. If a hard-copy SF 3100 has 

already been created and has not been submitted to OPM, it must 

be voided. Document the SF 2806 with the following: “Employee 

declined deemed FERS coverage under 5 CFR 846.204(b)(2)(ii) on 

_____ (insert date employee made the election)”. 

• Correct the Social Security records. You need to determine 

whether you can recover some or all of the Old-Age, Survivors, and 

Disability Insurance (OASDI) taxes withheld from the employee. 

You can recover OASDI taxes erroneously paid for a given year up 

to 3 years after that year’s filing deadline. For example, the filing 

deadline for tax year 1999 was April 17, 2000. You can recover 

OASDI taxes that were erroneously paid in calendar year 1999 up 

to April 17, 2003. 

Recover the OASDI taxes erroneously paid for each year that you 

are permitted to recover by completing IRS form 941c. See 

www.irs.gov/pub/irs-pdf/f941c.pdf for instructions on completing 

form 941c. Recover both the employee and employer OASDI 

taxes. You should refund to the employee any recovered OASDI 

taxes that are not needed to pay the employee’s CSRS 

withholdings. 

For each calendar year that you were permitted to recover 

erroneous OASDI tax, complete and submit a form W-2c, 

Corrected Wage and Tax Statement, showing the employee’s 

Social Security wages to be $0.00. Note that although the 

Medicare wages are not being changed, you must indicate what 

was previously reported for Medicare and indicate that same 

amount as being the correct information. See www.irs.gov/pub/irspdf/fw2c.pdf for instructions on completing form W-2c. 
BAL 02-103 May 7, 2002 

Attachment 1 Page 16 

Correcting Erroneous FERS Coverage 

STEP PROCEDURE

8.C. If the employee 

declines FERS in 

favor of CSRS: 

(continued) 

• Correct the TSP records. Correct TSP eligibility prospectively to 

show the correct status. Obtain a new TSP Election Form (TSP-1) 

or reduce employee contribution to the maximum CSRS limit. 

You need to remove the Agency Automatic (1%) and any Agency 

Matching Contributions, plus associated earnings, from the 

employee’s TSP account. Do not remove employee contributions 

unless the employee chooses to have the contributions refunded. 

Refer to Attachment 4 for more specific instructions on TSP 

adjustments. See also www.tsp.gov/bulletins/index.html for 

additional information. 

8.D. If the employee 

declines FERS in 

favor of Social 

Security (FICA)-

Only: 

• Correct and document the personnel records. If the erroneous 

FERS coverage occurred with an appointment or conversion to 

appointment action, prepare an 002/Correction action effective on 

the original appointment or conversion to appointment date. 

 Show the correct retirement code in block 30 (2). 

 Include remark C11 as follows: “Corrects item (number) 

from (K, L, M, or N)”. Include remark M96 as follows: 

“Employee declined deemed FERS coverage under 5 CFR 

846.204(b)(2)(ii) on ______ (insert date employee made the 

election).” 

Prepare another 002/Correction action if there are any other actions 

during the appointment showing incorrect FERS coverage. Correct 

the most recent action during the appointment on which the 

erroneous FERS coverage appears, showing the correct retirement 

code in block 30 (2). Include remarks C11 (Corrects item (number) 

from (K, L, M, or N)) and if necessary, C12 (Also corrects same 

item on all previous actions from (date) to (date)). If there are 

multiple periods of service that were erroneously subject to FERS, 

you need to correct each period. Refer to the Guide to Processing 

Personnel Actions at www.opm.gov/feddata/persdoc.htm for 

additional assistance in preparing personnel actions. 

• Service Credit. If the employee later becomes subject to 

retirement coverage, any post-1956 military service or civilian 

service performed before the date of erroneous FERS coverage 

that becomes subject to CSRS deposit or redeposit rules 

may be considered paid by actuarial reduction. 

If the employee has any such service performed before the 

erroneous FERS coverage, you need to document the employee’s 

records to show that the employee was erroneously put in FERS 

and is eligible for the actuarial reduction. The documentation is 
BAL 02-103 May 7, 2002 

Attachment 1 Page 17 

Correcting Erroneous FERS Coverage 

STEP PROCEDURE

8.D. If the employee 

declines FERS in 

favor of Social 

Security (FICA)-

Only: (continued) 

necessary so that you can identify when the actuarial reduction 

applies and advise the employee during benefits counseling. 

Additionally, you need to be able to notify OPM that the employee 

was erroneously placed in FERS and is eligible for the actuarial 

reduction whenever the employee files an application for deposit 

and/or retirement. 

• Correct the Employee Retirement Withholdings. The employee 

is entitled to receive a refund of retirement deductions withheld from 

salary. The employing agency is responsible for returning the 

retirement deductions it withheld from the employee’s pay. 

• Correct the Agency Retirement Contributions. The agency has 

overpaid agency retirement contributions. You may recover the 

agency retirement contributions you made. 

• RITS reporting. The agency payroll office must refund all 

retirement deductions withheld to the employee and may recover 

the amount of agency retirement contributions. Adjust the amounts 

that have been remitted to OPM by reducing FERS agency 

contributions and employee withholdings on a subsequent RITS 

submission. 

• Correct the Individual Retirement Record (IRR). You need to 

void the SF 3100, if created. Do not separate the IRR to OPM. 

• Correct the TSP records. Correct the TSP eligibility prospectively 

to show the correct status. Future TSP contributions stop. 

You need to remove the Agency Automatic (1%) and any Agency 

Matching Contributions, plus associated earnings, from the 

employee’s TSP account. Do not remove employee contributions 

unless the employee chooses to have the contributions refunded. 

Refer to Attachment 4 for more specific instructions on TSP 

adjustments. See also www.tsp.gov/bulletins/index.html for 

additional information. 

8.E. If the employee 

does not return 

the election form 

by the due date or 

request an 

extension of the 

deadline: 

Agencies are strongly encouraged to follow up on all cases involving 

FERS elections and to obtain and document written elections whenever 

possible. If, despite your efforts the employee fails to return the 

election form, the employee is deemed to have elected FERS. 

Document the employee’s failure to return the election form on the SF 

3109. Make sure you file the SF 3109 in the Official Personnel Folder. 
BAL 02-103 May 7, 2002 

Attachment 1 Page 18 

Correcting Erroneous FERS Coverage 

STEP PROCEDURE

8.E. If the employee 

does not return 

the election form 

by the due date or 

request an 

extension of the 

deadline: 

(continued)

• Correct and document the personnel records. Prepare an 

002/Correction action effective on the original appointment or 

conversion to appointment date. 

 Include remark C18 as follows: “Corrects item (number 45) 

to read: M95 - “Employee was given Deemed FERS election 

notice on _______ (insert date of notice) and did not 

respond. Employee is deemed to have elected FERS 

coverage under 5 CFR 846.204(b)(2)(i)”; and M38 - “Frozen 

service: (enter yrs. and mos.)”. 

Refer to the Guide to Processing Personnel Actions at 

www.opm.gov/feddata/persdoc.htm for additional assistance in 

preparing personnel actions. 

• Service Credit. Any post-1956 military service or civilian service 

performed before the date of erroneous FERS coverage that 

becomes subject to CSRS deposit or redeposit rules 

may be considered paid by actuarial reduction. 

If the employee has any such service performed before the 

erroneous FERS coverage, you need to document the employee’s 

records to show that the employee was erroneously put in FERS 

and is eligible for the actuarial reduction. The documentation is 

necessary so that you can identify when the actuarial reduction 

applies and advise the employee during benefits counseling. 

Additionally, you need to be able to notify OPM that the employee 

was erroneously placed in FERS and is eligible for the actuarial 

reduction whenever the employee files an application for deposit 

and/or retirement. 

• No adjustments are necessary to the employee withholdings or 

agency contributions.

• No adjustments are necessary to the Social Security Records. 

• Document the Individual Retirement Record (IRR). Document 

the SF 3100, when created, to show the employee made a deemed 

election of FERS coverage. Insert the following remark in column 4 

of the SF 3100: “Employee was given deemed FERS election 

notice on ________ (insert date of notice) and did not respond. 

Employee is deemed to have elected FERS coverage under 5 CFR 

846.204(b)(2)(i).” Also, insert the unused sick leave balance as of 

the effective date of the FERS election. 
BAL 02-103 May 7, 2002 

Attachment 1 Page 19 

Correcting Erroneous FERS Coverage 

STEP PROCEDURE

8.E. If the employee 

does not return 

the election form 

by the due date or 

request an 

extension of the 

deadline: 

(continued)

• Correct the TSP records. The agency needs to make up Agency 

Automatic (1%) Contributions. Because the employee now elected

FERS (rather than being automatically placed in FERS), the 

employee is immediately eligible for Agency Automatic (1%) 

contributions. Make up Agency Automatic (1%) contributions are 

due for the period beginning with the date of FERS coverage 

through the date that Agency Automatic (1%) Contributions actually 

began. The employee is also entitled to lost earnings on these 

agency contributions. 

If the earliest date the employee could have begun contributing to 

TSP changes (because the employee changed from being 

automatically put in FERS to electing FERS), you must give the 

employee an opportunity to makeup TSP contributions. The makeup period begins on the date the employee was put in FERS and 

ends on the date the employee was previously eligible to begin 

contributing to TSP. No lost earnings are payable on these 

employee make-up contributions. If the employee makes up 

contributions, the agency must also make matching contributions 

with lost earnings. NOTE: For employees hired on or after July 1, 

2000, there is no waiting period for employee participation in TSP. 

See Attachment 4 for additional TSP instructions. See also 

www.tsp.gov/bulletins/index.html for additional information.