United States 

Office of 

Personnel Management

The Federal Government’s Human Resources Agency

Benefits Administration Letter

Number 17 - 101 Date: 1-27-2017

Subject: Additional Guidance on Military Deposits 

Background 

This Benefits Administration Letter (BAL) replaces BAL 13-103 which was developed to

remind agencies of the fact that, generally, an employee must pay military service credit 

deposit under Civil Service Retirement System (CSRS) and Federal Employees 

Retirement System (FERS) to the agency before separation. 5 U.S.C. § 8334(j) or 5 

U.S.C. § 8422(e); see also 5 CFR 831.2104 and 842.307. However, 5 CFR §§ 

831.2104(a) and 842.307 also provide that in the event of administrative error related to 

the military service credit deposit, a former employee has the opportunity to make or 

complete the military deposit after separation.

What this BAL does

• Provides a general discussion of what constitutes an administrative error related to 

a military service credit deposit

• Reminds Human Resource Specialists of the necessity of counselling employees 

about paying military deposits when they have or return from military service.

• Notifies Human Resource Specialists of the procedures that must be followed by a 

former employee if the former employee believes an administrative error occurred 

and prevented them from being able to make or complete a military deposit before 

separation from Federal civilian employment. 

• Provides links to, and an analysis of several decisions that have impacted the 

treatment of military deposits.

What this BAL does not do

• Change any existing law or regulation

• Change any documentation necessary to determine the creditability of military 

service 

• Delegate to any agency the authority to allow an individual to complete a belated 

military service credit deposit due to administrative error. 
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General rules concerning military service

• In general, honorable, active duty military service is creditable for retirement 

purposes only when the employee pays a deposit for that service.

o Exceptions: 

 Military service performed before 1957 

 Military service performed after 1956 that is credited under CSRS 

(either in a CSRS annuity or in a CSRS component of a FERS annuity) 

for an employee who was first covered under CSRS before October 1, 

1982 if the employee is not eligible for social security benefits.

• Even if the employee pays a deposit for a period of military service, receipt of 

military retired pay may bar CSRS or FERS retirement credit for a period of military 

service, except as provided in 5 CFR 831.301(b)(2) and 842306(b). 

• The deposit must be paid in full to the employing agency on or before the separation 

date on which title to annuity is based. 

• Payments made via payroll deduction are considered to be made on or before the date 

of separation even if the date of the final salary payment is after the date of 

separation.

• Agencies are required to provide accurate and complete counseling to all employees 

who seek to make post-1956 military deposit; this includes counseling as to the effect 

of paying or not paying the deposit(s) as well as the proper calculation of the 

deposit(s). 

• Agencies and payroll providers should promptly forward the retirement package to 

OPM, documenting the deposit status (paid in full, partially paid, unpaid) for all 

separate periods of post-1956 military service. Documentation should include all 

military earnings information and worksheets and/or printouts used in the 

computation (or showing the computation). 

• Under no circumstances should the retirement package be delayed while awaiting an 

OPM decision on a claim of administrative error.

• A former employee who believes that an administrative error occurred and resulted in 

the inability to complete the military deposit before separation from federal civilian 

employment, may file a specific written request with OPM to make a belated post1956 military deposit. Such a request is initiated by the former employee and not by 

the agency). 

• Only OPM, U.S. Merit Systems Protection Board, and its reviewing court, may apply 

the administrative error regulations in any given retiree’s case.

• If a belated deposit opportunity is approved by OPM or a reviewing entity, the 

retiree’s last employing agency will be notified by OPM to provide the retiree with an 

opportunity to make or complete the deposit, to the employing agency, within the 

allotted time period. 
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Definition of Administrative Error for Military Service Credit Deposits

In response to an employee's inquiry, the employing agency provides material 

misinformation concerning the deposit and the consequences of not making the deposit 

prior to separation. 

Thomas v. Office of Pers. Mgmt., No. CH-0831-07-0040-I-1, 2007 WL 4239974 

(M.S.P.B. Dec. 4, 2007) 

Under the regulations for military service credit deposits, 5 CFR 831.2104 and 842.307, 

“administrative error” in the deposit process allows an individual to make a belated 

military deposit. Administrative error is only recognized as a basis for a belated military 

deposit and is cannot provide the basis for belated processing actions other than military 

deposits. What constitutes administrative error is not addressed in the regulations. The 

Merit Systems Protection Board has issued several decisions that establish a standard for 

administrative error. In general, an administrative error occurs when in response to an 

employee's inquiry, the employing agency provides material misinformation concerning 

the deposit and the consequences of not making the deposit prior to separation. Thomas 

v. Office of Pers. Mgmt., 107 M.S.P.R. 334 (2007). In addition, if an employee, at the 

time of election, affirmatively asks for information regarding the amount of the military 

deposit or the consequences of failing to make a deposit, the government commits 

administrative error if its response either misrepresents the dollar amounts in question, or 

is so indirect, inaccurate, or incomplete as to confuse the employee as to the amount of 

the deposit or the effect of any failure to make the deposit on the annuity recalculation. 

See McCrary v. Office of Pers. Mgmt., 459 F.3d 1344, 1349 (Fed.Cir.2006). 

Employee and Agency Responsibilities

In accordance with McCrary v. Office of Personnel Management agencies are required to 

provide direct, accurate, and complete information to employees about military service 

deposits. The responsibility of the employee is to initiate the request and assembly of 

evidence of creditable military service and to initiate a request to make a deposit through 

his or her employing agency. 

Employee 

• It is the employee’s responsibility to seek counseling from the employing agency 

about the post-1956 military deposit requirement. 

• It is the employee’s responsibility to assemble the pertinent supporting 

documentation of creditable active, honorable, military service as the term 

“military service” is defined at 5 USC §8331(13) and §8401(31). 

o The employee’s responsibility includes obtaining the actual or estimated 

military earnings for a given period of service from the military, through 
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the Defense Finance & Accounting Service (DFAS). Frequently the 

employing agency assists the employee to obtain this information. 

• It is the employee’s responsibility to ensure that his/her military deposit is paid in 

full by the final separation date from civilian employment. This includes 

separations other than for retirement (resignations, removals, abandonments and 

terminations of appointment). 

Agency

• Each Federal employing agency or entity, in conjunction with its payroll provider, 

must have the capacity to counsel, calculate, collect and to post all payments 

related to employees’ deposits for military service, and appropriate accounting 

support systems for the deposits and any applicable interest. 

• Any request for deposit counseling by an employee must be accurate and 

complete, and must include a determination as to whether the military service for 

which service credit is requested, is potentially creditable for civil service 

retirement purposes. The employee should be advised that OPM’s Retirement 

Service will ultimately decide if any particular period of military service is 

creditable for civil service retirement. 

• For deposits involving the special Uniform Services Employment and 

Reemployment Rights Act (USERRA) calculation, the agency must calculate the 

version of the deposit based on the civil service retirement contributions for the 

civilian employment rates of pay that would be applicable if the employee had not 

been on active duty. The agency also calculates the deposit in the usual way 

using military earnings for the period. Interest is added if applicable. The 

results of the two methods are compared and the lower of the two is the amount 

used for the deposit. Under both methods of calculation, the individual is still 

making a military service credit deposit. 

• Agencies are responsible for including accurate information about the accrual of 

interest on military deposits, and to accurately determine and apply the Interest 

Accrual Date in any given request to make deposit for a period of military service. 

• As an additional counseling point, if it appears that an employee will not be able 

to complete payment of a military deposit before the employee’s selected 

voluntary retirement date, the employee should be advised that he or she may 

accelerate payment to complete of the deposit before separation. Simply not 

having enough time to complete a military deposit based upon a voluntary 

separation does not constitute an administrative error. An employee who needs 
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more time to complete the deposit should consider selecting a later retirement 

date. 

Full Payment of Military Deposit as of the Date of Retirement/Separation

Military deposit payments must be completed at the employing agency/payroll provider 

before final separation from employment upon which the civil service annuity is based. 

“Completed” means the final payment has already been processed or will be processed in 

the final payroll closeout if done by payroll deduction. 

For FERS employees and CSRS employees who began covered service on or after 

October 1, 1982, if military service is needed for title to a retirement, then these 

employees must pay the military service credit deposit in full before retirement in order 

to meet the eligibility requirements for immediate retirement. 

Employing agencies and the supporting payroll provider are responsible for administering 

the agency’s military service credit deposit program, including any necessary corrections 

of civilian retirement documents (including Individual Retirement Records IRRs), and 

estimates for counseling. Payroll providers should include with the retirement package

(or upon separation of an employee): 

• Any fully paid or partially paid Military Deposit IRRs; or

• If there was no deposit with that agency in that period of employment, the final 

SF 3100 or SF 2806 clearly annotated with “No post-1956 military service deposit 

made with this agency.” This statement should also appear on the IRRs for all 

employees who did not have, or who did seek to claim credit for, military service.

OPM/Retirement Service Responsibilities

Upon receipt of an application for retirement, OPM determines the creditability of 

military service. If military service is potentially creditable, OPM determines whether 

the individual has completed the appropriate military service credit deposit with interest 

for the period. In making its determination about a particular deposit, OPM primarily 

relies upon the submissions of records from the employing agency and its payroll 

provider, especially the Individual Retirement Records. 

OPM finalizes an annuity claim with military service, subject to receipt of a fully paid 

deposit. In the absence of a fully paid deposit record, OPM cannot allow credit for the 

military service. In those instances where the retirement records include evidence of an 

incomplete (partial) deposit payment, OPM uses the partial payment to satisfy the deposit 

for one or more separate distinct periods of military service. If the partial deposit is 
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sufficient to pay the cost of one or more separate periods, any remaining portion of the 

deposit is returned to the employee. 

If an employee alleges to OPM after retirement that his or her employing agency took an 

action, or neglected to take an action involving the military deposit, that influenced or 

caused the individual to not initiate or complete the deposit, then OPM will determine if 

the circumstances constitutes an administrative error. OPM will decide if the 

circumstances warrant allowing the individual to make a belated deposit to his or her 

former employing agency. If approved, or if denied but then subsequently ordered 

approved by Merit Systems Protection Board (MSPB) or a reviewing court, OPM will 

issue a notice to the individual describing a time limit by which he or she must complete 

his or her deposit through his or her former agency. 

Upon payment of the belated deposit, the employing agency remits the deposit to OPM, 

and submits evidence of individual deposit to the Retirement Operations Center within 

the original time limit set by OPM. After receipt of the belated deposit, OPM approves 

or re-issues the annuity at the appropriate rate. 

OPM will only consider individual requests for belated deposit due to administrative 

error. 

Deemed Administrative Errors

There are limited circumstances in which OPM will deem administrative errors to have 

occurred, and which would automatically enable an individual to belatedly complete 

payment of his or her military deposit to his or her prior employing agency after 

separation from employment. 

• Federal Erroneous Retirement Coverage Correction Act (FERCCA): If a 

retirement plan coverage error that qualifies for correction is discovered after 

separation, and: 

o The deposit was not paid in full because the agency enrolled the employee 

in the wrong retirement plan, and/or, 

o The amount of deposit was misstated, then, 

a request for belated military deposit can be granted, to be administered by the 

agency in conjunction with the FERCCA remedy. 

• Deposit calculation errors discovered after separation. (e.g., a FERS deposit was 

computed instead of a CSRS deposit; failure to account for higher deduction years 
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in 1999/2000; the employing agency commenced interest as of the wrong Interest 

Accrual Date, etc.) 

Request for Individual Finding of Administrative Error

If an employee who did not complete payment of the military deposit, believes that the 

failure to pay was caused by an employer’s administrative error, and wants to complete 

the payment after retirement, the employee/retiree may request a finding of 

administrative error.

Submitting the request with the retirement package:

The employee may submit the request with the retirement package. The request should 

include: 

 

• A signed statement from the employee asserting in detail, in his or her own 

words: (a) what he or she believes the administrative error was, (b) how the error 

caused the employee to fail to make the timely deposit payment, and, (c) why the 

employee chose not delay his or her retirement separation in order to complete the 

deposit. 

• An agency statement, should the agency wish to submit one with the retirement 

package at its discretion, explaining what action it took with respect to counseling 

the employee on making the military deposit. It may also include information on 

why the employee chose not to delay his or her retirement separation in order to 

complete the deposit. Any statement forwarded by the agency in this context 

becomes part of the retirement record and is reviewable in any subsequent 

litigation. 

• Input from the agency that may support or dispute allegations by the employee

of administrative error by the agency. 

Agency input pertaining to administrative error is not required unless the agency issued a 

written decision to the employee denying eligibility to make deposit for one or more 

periods of military service. 
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Submitting the request after retirement:

Alternatively, a separated employee may submit a request alleging administrative error 

directly to OPM. In such cases, the retirement applicant should wait until he or she has 

been assigned an OPM claim number so that his or her request can be associated 

correctly with his or her retirement file. 

The request should be sent to: 

OPM Retirement Operations Center

P.O. Box 45 

Boyers, PA 16017-0045 

Actions Taken by OPM Upon Receipt of Allegation of Administrative Error 

OPM/Retirement Operations will carefully evaluate an allegation of administrative error 

and determine the proper course of action based on policy guidance in the following 

section. There are three potential actions the Legal Administrative Specialist could take:

a. Belated Deposit Approved 

b. Belated Deposit Denied

c. Belated Deposit Referred for Clearinghouse Review

Involuntary Retirement, Disability Retirement and Survivor Annuities Resulting 

from Deaths in Service

Because employees who retire under involuntary and disability retirements are not in 

control of their final separation date, a different standard for approving belated deposits 

applies. 

A separating employee who asks OPM to make a belated deposit may qualify to complete 

a belated deposit, if:

• The fact that retirement was involuntary or as a result of a disability 

• Documentation showing that it was not possible to have paid the military deposit 

in full by the time of the separation.
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Opportunity to Complete Military Service Credit Deposits After Employee’s Death 

in Service: 

The surviving spouse or former spouse of an employee who died in service as an 

employee is allowed to make or complete the deposit for military service of the 

employee. If the employee died while absent to perform Federal active duty (not 

National Guard under title 32, because such service is only potentially creditable if 

followed by reemployment in accordance with chapter 43 of title 38 U.S.C.), then the 

surviving spouse, or former spouse in some cases, may make the deposit for the 

employee’s final period of military service. No special approval from OPM is required in 

such cases. However, survivors in such cases should be encouraged to obtain detailed

counseling on post-death benefits from all Federal entities that may be involved (Military 

Retired Pay Center, Department of Veterans Affairs, Social Security Administration and 

the Federal civilian employer). The interplay of benefits upon the death of a military 

member can be quite complex. One key factor for the survivor is that payment of the 

military deposit does not always increase that person’s benefit from OPM, due to 

statutory offsets of civil service survivor benefits due to military survivor benefits, and so 

forth.

Agency

At its discretion, the agency may provide a statement saying it did not provide direct, 

accurate, or complete information to the deceased employee regarding the effects of 

making and not making a military deposit upon an employee’s request for such 

information. The agency must support this statement with any documentation showing 

inaccurate or incomplete counselling.

OPM Actions Based on Determination of Administrative Error 

OPM will not delay processing retirement packages due to an applicant’s allegation of 

administrative error with respect to a military deposit, unless it is determined that an 

administrative error exists (see below).

• If a belated deposit is approved, OPM will notify the employee/applicant for 

retirement of the specific time period granted to exercise the belated deposit 

option, and for the agency to complete its actions. 

• OPM will also send a letter to the last employing agency. 

• If a belated deposit is denied, the employee/applicant must be given an initial 

OPM decision, with reconsideration rights, and a copy of the denial will be 

forwarded to the Benefits Officer at the last employing agency after due process is 

exhausted. 
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Payroll/Shared Service Center Actions

• Any deposit must be administered by that agency’s payroll provider. 

• If completed, the military deposit must be remitted to OPM as soon as possible, so 

as to be received by OPM no later than the expiration date of the belated deposit 

election timeframe specified by OPM.

 Kenneth J. Zawodny, Jr. 

 Associate Director 

Retirement Services