United States

Office of 

Personnel Management 

The Federal Government’s Human Resources Agency 

Benefits Administration Letter 

Number 21-101 Date: April 2021

Subject: Payment of Interest on Post-56 Military Deposit or Peace Corp or VISTA 

Service Deposit with an Administrative Error 

Purpose 

This Benefits Administration Letter (BAL) provides guidance on the implementation of 

Section 2 of Public Law (P.L.) 115-352 “Correcting Miscalculations in Veterans’ 

Pensions Act”. This law amends title 5, United States Code, to provide for interest 

payments by agencies in the case of administrative error in processing certain annuity 

deposits for prior military service or certain volunteer service, and for other purposes.

Background

An administrative error generally occurs when the employing agency provides material 

misinformation concerning a post-1956 military service deposit. If an initial decision is 

made that a person cannot pay a belated deposit, the individual can file a request for 

reconsideration. In cases where the initial decision is reversed due to administrative error, 

the individual is given an opportunity to pay a belated deposit. Under prior law, there was 

no provision that allowed for the waiver of interest. Consequently, more money is owed 

than was initially billed because interest will continue to accrue on the remaining balance 

until the balance is paid in full. 

Under P.L. 115-352, an agency can pay the additional interest on the employee’s behalf. 

The amendments of P.L. 115-352 can be found in 5 U.S.C. §§ 8334(j)(6), 8334(l)(5)(A) 

and 5 U.S.C. § 8422(e)(7)(A), 8422(f)(5)(A) for CSRS and FERS respectively. 
2

Guidance

In calculating and processing deposits for service under 5 U.S.C § 8334(j)(1), and 5 

U.S.C. § 8422(e)(1), (military deposits under CSRS and FERS respectively): if an 

employing agency makes an administrative error that causes additional interest to accrue 

on the deposit, the employing agency may pay, on behalf of the employee, any additional 

interest assessed due to the administrative error. The agency payment of additional 

interest must be included in the “Paid In Full” IRR. OPM will not accept this as a 

separate payment. 

When the error is identified before the employee separates, the agency may pay, on 

behalf of the employee, the additional interest, and submit the correct amount of the 

deposit to the Office of Personnel Management (OPM).

When the administrative error is identified after the employee has separated, the last 

employing agency will be notified per the information in Benefits Administration Letter 

(BAL) 17-101. The agency may then, on behalf of the employee, pay the additional 

interest assessed due to the administrative error.

In calculating and processing deposits for service under 5 U.S.C § 8334(l)(1), and 5 

U.S.C. § 8422(f)(1), (Peace Corps and VISTA deposits under CSRS and FERS 

respectively): if an employing agency makes an administrative error that causes

additional interest assessed to accrue on the deposit, the employing agency may pay, on 

behalf of the employee, any additional interest assessed due to the administrative error.

Because Peace Corps and VISTA service credit deposits are processed by OPM, it would

be very rare that the administrative error occurred with the employing agency. In the 

event that an administrative error occurred at the employing agency that resulted in 

additional interest being assessed, for example, if an agency erroneously informed an

employee that deposits could not be made for Peace Corps or VISTA service, then the 

agency can, on behalf of the employee, pay any additional interest assessed due to the 

administrative error.

Kenneth J. Zawodny, Jr.

Associate Director 

Retirement Services