United States 

Office of 

Personnel Management

The Federal Government’s Human Resources Agency 

Benefits Administration Letter 

Number: 03-104 Date: April 15, 2003 

Subject: Retirement Coverage Error Correction: Correction of Errors that do not 

Provide an Election 

Introduction 

This Benefits Administration Letter (BAL) provides information on retirement coverage errors 

that agencies should now be correcting and instructions for correcting errors involving erroneous 

retirement coverage where the individual has no choice in what retirement system to be in. 

Categories of errors that should be corrected 

Agency Personnel/Human Resource offices should correct the following types of retirement 

coverage errors. 

•	 Administrative corrections. Administrative corrections are corrections where there is no 

error in the coverage determination but the person must be moved from one type of 

coverage to another. An example of this type is to and from law enforcement 

officer/firefighter coverage within a retirement system (correcting retirement code 1 to 6, 

or 6 to 1). Attachment 1 is a chart of “Common Retirement Plans and Corresponding 

Codes.” 

•	 Erroneous FERS coverage that lasted for less than 3 years of service. BAL 02-103 

provides detailed instructions for making these corrections. 

•	 Errors that do not provide an election. 

Errors that do not provide an election 

The Federal Erroneous Retirement Coverage Corrections Act (FERCCA) legislation and OPM 

regulations do not give every individual who had a retirement coverage error a choice about 

which retirement system to be under. There are five types of retirement coverage errors that must 

be corrected. The following chart summarizes the types of errors that do not trigger an election: 

Civil Service 

Retirement 

System 

Federal Employees’ 

Group Life 

Insurance Program 

Federal Employees 

Health Benefits 

Program 

Federal Employees 

Retirement 

System 

Long Term 

Care Insurance 

Program 
The employee is in: And the employee belongs 

in: 

Employee’s coverage must 

be corrected to: 

CSRS CSRS Offset CSRS Offset 

CSRS Offset CSRS CSRS 

Social Security Only CSRS CSRS 

Social Security Only CSRS Offset CSRS Offset 

Social Security Only FERS FERS 

Barred vs. non-barred years 

The Internal Revenue Service retroactive tax adjustment statute of limitations limits corrections 

of social security tax records (OASDI) to three years, three months, and 15 days after the year in 

which the wages were paid. Adjustments made during these years are known as the non-barred 

years. Years beyond this limit are known as the barred years. One of the major issues that 

complicated corrections of retirement coverage errors was the absence of a way to correct the 

retirement contributions that involved social security and extended into the barred years. 

FERCCA provides a method for making corrections during the barred years by allowing 

agencies to pay social security taxes (FICA) to OPM who in turn will transfer them to the 

General Fund. 

Below is a schedule for IRS Retroactive Tax Adjustments Statute of Limitations. 

For Tax Year With Tax Return Due Date 

of: 

Adjustments Can Be Made 

Until: 

1999 April 17, 2000 April 17, 2003 

2000 April 16, 2001 April 16, 2004 

2001 April 15, 2002 April 15, 2005 

2002 April 15, 2003 April 15, 2006 

For Errors Corrected Between: Corrections Can Be Made for Tax Years: 

April 17, 2002 – April 15, 2003 1999, 2000, 2001, 2002 

April 16, 2003 – April 16, 2004 2000, 2001, 2002, 2003 

When making corrections, the retirement contributions (both social security and the Civil 

Service Retirement System (CSRS) or the Federal Employees Retirement System (FERS)) 

during the barred years and the non-barred years must be treated separately. Calculate the 

amount of agency and employee contributions previously made for the barred and non-barred 

years. The two “pots of money” must be dealt with independently and not commingled. 

Previous contributions that are available for correcting social security taxes and retirement 

contributions must be kept within the same category, i.e. barred year contributions and nonbarred year contributions. 

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ERRONEOUS CSRS COVERAGE, EMPLOYEE BELONGS IN CSRS OFFSET 

Actions by Human Resource Office 

Personnel/Human Resource Office must correct the retirement coverage from CSRS to CSRS 

Offset, retroactive to the effective date of the error. Attachment 1 is a chart of “Common Retirement 

Plans and Corresponding Codes” for your use in determining the correct codes to include on the 

personnel action. Include in remarks, “Correction due to Public Law 106-265 (FERCCA).” Refer to 

the Guide to Processing Personnel Actions at www.opm.gov/feddata/persdoc.htm for additional 

assistance in preparing personnel actions. Notify the employee of the correction needed. Using the 

example in Attachment 2 as a guide, explain to the employee the distribution of money from the 

Retirement Fund and Social Security. 

Actions by Payroll Office 

Servicing Payroll Office must correct the retirement deductions and Social Security. 

Non-Barred Years for Social Security taxes 

1. Back out the full 7% employee contributions via the RITS/2812 system, following 

current procedures. 

2. Calculate and submit the appropriate retirement deductions based on the new retirement 

coverage via the RITS/2812 system, following current procedures. 

3. Calculate the Social Security’s Old-Age, Survivors, and Disability Insurance (OASDI) 

taxes due for the non-barred years. You can determine the taxes due 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 determine the OASDI taxes due in calendar year 1999 

up to April 17, 2003. Use the balance of excess retirement deductions for the non-barred 

years to cover in whole or in part the employee’s cost of the OASDI taxes. If the 

individual owes additional taxes due to awards and bonuses, etc, above his or her base 

pay, collect the additional OASDI taxes from the individual. Once billed for the 

additional taxes, the employee can submit a claim for reimbursement of the out-of-pocket 

expense from OPM. 

4. The agency should submit both employer and employee social security taxes to the 

Internal Revenue Service (IRS), following current procedures. 

3 
Barred Years for Social Security 

1. Back out the full 7% employee contributions via the RITS/2812 system, following 

current procedures. 

2. Calculate and submit the appropriate retirement deductions based on the new retirement 

coverage via the RITS/2812 system, following current procedures. 

3. Calculate the OASDI taxes that would have been payable for the barred years. 

4. Return the excess retirement deductions for the barred years to OPM via OPAC/IPAC 

with these remarks: “Amount submitted for NAME, SSN, AGENCY, ALC, on DATE is 

being done in accordance with the FERCCA”, in the appropriate field to identify the 

payment as a FERCCA payment. Submissions would be on a periodic basis (monthly, 

quarterly, or other to be established). If the excess retirement deductions do not cover the 

full amount of the OASDI taxes that the employee would have owed for the barred years, 

no additional OASDI tax is owed. Return only the excess retirement deductions to OPM, 

who will in turn send that money to the General Fund for payment of Social Security 

taxes. Return only what is needed to pay the OASDI tax for the barred years. If there is 

any money remaining, refund it to the employee. 

5. Correct the employee’s Social Security earnings record for all years (barred and nonbarred), using current procedures (W-2C/W-3C). 

6. Correct the employee’s Individual Retirement Record (IRR) (for all years) to reflect the 

correct retirement deduction amount. Annotate the record to show that, “Correction is in 

accordance with FERCCA”. 

The employee worked at more than one agency during the period of the coverage error. 

The current agency (or last employer) must correct the personnel records for the entire period. 

The current payroll office will adjust the retirement deductions, OASDI taxes and Social 

Security earnings records for the period of time the employee was at the current agency. If the 

period of service in the other agencies was during the barred years, OPM will compute the 

excess retirement deductions and adjust the retirement records already on file at OPM. OPM 

will contact the former employing agencies (through the agencies’ benefits counselors), and 

advise them that they must adjust the employee’s Social Security earnings record. 

The employee worked at another agency during the non-barred years. 

The current agency (or last employer) must notify the prior agency (through that agency’s 

benefits counselor) so they can ensure that the corrections are made. That agency’s payroll office 

must take the same steps outlined above. 

4 
 

The agency has already corrected the employee’s records and has escrowed social security 

deductions for barred years awaiting guidance from OPM. 

It should transfer those excess deductions to OPM using the OPAC/IPAC system described 

above. If the agency has not already done so, it should correct the employee’s Social Security 

earnings record. 

ERRONEOUS COVERAGE WAS CSRS OFFSET, CORRECT COVERAGE IS CSRS 

Actions by Human Resource Office 

Personnel/Human Resource Office must correct the retirement coverage from CSRS Offset to CSRS 

retroactive to the effective date of the error. Attachment 1 is a chart of “Common Retirement Plans 

and Corresponding Codes” for your use in determining the correct codes to include on the personnel 

action. Include in remarks, “Correction due to Public Law 106-265 (FERCCA).” Refer to the Guide 

to Processing Personnel Actions at www.opm.gov/feddata/persdoc.htm for additional assistance in 

preparing personnel actions. Notify the employee of the correction needed. Using the example in 

Attachment 2 as a guide, explain to the employee the distribution of money from the Retirement 

Fund and Social Security. 

Actions by Payroll Office 

Servicing Payroll Office must correct the retirement deductions and Social Security. 

Non-Barred Years for Social Security taxes 

1. The employee owes additional retirement deductions for CSRS coverage and has 

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

whether you can recover some or all of the 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. The agency is responsible for any difference between the employee 

retirement contributions withheld and the full CSRS contribution. The employee does not 

get social security credit for these years. 

2. 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. 

3. For each calendar year that you are permitted to recover erroneous 

OASDI taxes, 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 

5 
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/irs-pdf/fw2c.pdf for instructions on completing form W-2c. 

4. Calculate and submit the appropriate retirement deductions based on the new retirement 

coverage via the RITS/2812 system, following current procedures. 

Barred Years for Social Security 

1. Calculate and submit the appropriate retirement deductions based on the new retirement 

coverage via the RITS/2812 system, following current procedures. The agency is 

responsible for any difference between the employee retirement contributions withheld 

and the full CSRS contribution. Do not bill the employee for any retirement 

contributions. 

2. Correct the employee’s Individual Retirement Record (IRR) (for all years) to reflect the 

correct retirement deduction amount. Annotate the record to show that, “Correction is in 

accordance with FERCCA.” 

3. The agency may not recover the social security taxes paid during the barred years. Notify 

the employee that the Social Security taxes for the barred years remain credited to Social 

Security. The employee receives credit for the service for Social Security benefits and 

Civil Service Retirement benefits. 

The employee worked at more than one agency during the period of the coverage error. 

The current agency (or last employer) must correct the personnel records for the entire period. 

The current payroll office will adjust the retirement deductions, OASDI taxes and Social 

Security earnings records for the period of time the employee was at the current agency. If the 

period of service in the other agencies was during the barred years, OPM will compute the 

retirement deductions owed and notify the agency of the amount owed to the Retirement Fund. 

The employee worked at another agency during the non-barred years. 

The current agency (or last employer) must notify the prior agency (through that agency’s 

benefits counselor) so they can ensure that the corrections are made. That agency’s payroll office 

must take the same steps outlined above. 

6 
 

ERRONEOUS SOCIAL SECURITY-ONLY COVERAGE, EMPLOYEE BELONGS IN 

CSRS 

Actions by Human Resource Office 

Personnel/Human Resource Office must correct the retirement coverage from Social Security-Only 

to CSRS retroactive to the effective date of the error. Attachment 1 is a chart of “Common 

Retirement Plans and Corresponding Codes” for your use in determining the correct codes to include 

on the personnel action. Include in remarks, “Correction due to Public Law 106-265 (FERCCA).” 

Refer to the Guide to Processing Personnel Actions at www.opm.gov/feddata/persdoc.htm for 

additional assistance in preparing personnel actions. Notify the employee of the correction needed. 

Using the example in Attachment 2 as a guide, explain to the employee the distribution of money 

from the Retirement Fund and Social Security. 

Actions by Payroll Office 

Servicing Payroll Office must correct the retirement deductions and Social Security. 

Non-Barred Years for Social Security 

1. The employee owes retirement deductions for CSRS coverage and has overpaid Old-Age, 

Survivors, and Disability Insurance (OASDI) taxes. Determine whether you can recover 

some or all of the 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. The 

agency is responsible for both the employee and the employer CSRS retirement 

contributions. The employee does not get social security credit for these years. 

2. 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. 

3. For each calendar year that you are permitted to recover erroneous 

OASDI taxes, 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/irs-pdf/fw2c.pdf for instructions on completing form W-2c. 

4. Calculate and submit the appropriate retirement deductions based on the new retirement 

coverage via the RITS/2812 system, following current procedures. 

7 
Barred Years for Social Security 

1. Calculate and submit the appropriate retirement deductions based on the new retirement 

coverage via the RITS/2812 system, following current procedures. The agency is 

responsible for both the employee and employer CSRS retirement contributions. Do not 

bill the employee for any retirement contributions. 

2. Create Individual Retirement Record (IRR) to reflect the retirement deductions. Annotate 

the record to show that the IRR is, “Created in accordance with FERCCA.” 

3. Notify the employee that the Social Security taxes for the barred years remain credited to 

Social Security. The employee receives credit for the service for Social Security benefits 

and Civil Service Retirement benefits. 

The employee worked at more than one agency during the period of the coverage error. 

The current agency (or last employer) must correct the personnel records for the entire period. 

The current payroll office will adjust the retirement deductions, OASDI taxes and Social 

Security earnings records for the period of time the employee was at the current agency. If the 

period of service covered by the error was in an other agency, the current agency (or last 

employer) must notify the prior agency (through that agency’s benefits counselor) so they can 

ensure that the corrections are made. That agency’s payroll office must take the same steps 

outlined above. 

8 
 

ERRONEOUS SOCIAL SECURITY-ONLY COVERAGE, EMPLOYEE BELONGS IN 

CSRS OFFSET 

Actions by Human Resource Office 

Personnel/Human Resource Office must correct the retirement coverage from Social Security-Only 

to CSRS Offset retroactive to the effective date of the error. Attachment 1 s a chart of “Common 

Retirement Plans and Corresponding Codes” for your use in determining the correct codes to include 

on the personnel action. Include in remarks, “Correction due to Public Law 106-265 (FERCCA).” 

Refer to the Guide to Processing Personnel Actions at www.opm.gov/feddata/persdoc.htm for 

additional assistance in preparing personnel actions. Notify the employee of the correction needed. 

Using the example in attachment 2 as a guide, explain to the employee the distribution of money 

from the Retirement Fund and Social Security. 

Actions by Payroll Office 

Servicing Payroll Office must correct the retirement deductions. 

1. Calculate and submit the appropriate retirement deductions based on the new retirement 

coverage via the RITS/2812 system, following current procedures. The agency is 

responsible for both the employee and employer CSRS-Offset retirement contributions. 

Do not bill the employee for any retirement deductions. 

2. Create Individual Retirement Record (IRR) to reflect the retirement deductions. Annotate 

the record to show that the IRR is, “Created in accordance with FERCCA.” 

3. Notify the employee that the Social Security taxes remain credited to Social Security. 

The employee receives credit for the service for Social Security benefits and Civil 

Service Retirement benefits. 

If the employee worked at more than one agency during the period of the coverage error, 

The current agency (or last employer) must correct the personnel records for the entire period. 

The current payroll office will adjust the retirement deductions for the period of time the 

employee was at the current agency. If the period of service covered by the error was in an other 

agency, the current agency (or last employer) must notify the prior agency (through that 

agency’s benefits counselor) so they can ensure that the corrections are made. That agency’s 

payroll office must take the same steps outlined above. 

9 
 

 

ERRONEOUS SOCIAL SECURITY-ONLY COVERAGE, EMPLOYEE BELONGS IN 

FERS 

Actions by Human Resource Office 

Personnel/Human Resource Office must correct the retirement coverage from Social Security-Only 

to FERS retroactive to the effective date of the error. Attachment 1 is a chart of “Common 

Retirement Plans and Corresponding Codes” for your use in determining the correct codes to include 

on the personnel action. Include in remarks, “Correction due to Public Law 106-265 (FERCCA).” 

Refer to the Guide to Processing Personnel Actions at www.opm.gov/feddata/persdoc.htm for 

additional assistance in preparing personnel actions. Notify the employee of the correction needed. 

Using the example in Attachment 2 as a guide, explain to the employee the distribution of money 

from the Retirement Fund and Social Security. 

Actions by Payroll Office 

Servicing Payroll Office must correct the retirement deductions. 

1. Calculate and submit the appropriate retirement deductions based on the new retirement 

coverage via the RITS/2812 system, following current procedures. The agency is 

responsible for both the employee and employer FERS retirement contributions. Do not 

bill the employee for any retirement deductions. 

2. Create Individual Retirement Record (IRR) to reflect the retirement deductions. Annotate 

the record to show that the IRR is, “Created in accordance with FERCCA.” 

3. Notify the employee that all Social Security taxes remain credited to Social Security. The 

employee receives credit for the service for Social Security benefits and Federal 

Employees Retirement benefits. 

The employee worked at more than one agency during the period of the coverage error. 

The current agency (or last employer) must correct the personnel records for the entire period. 

The current payroll office will adjust the retirement deductions for the period of time the 

employee was at the current agency. If the period of service covered by the error was in an other 

agency, the current agency (or last employer) must notify the prior agency (through that 

agency’s benefits counselor) so they can ensure that the corrections are made. That agency’s 

payroll office must take the same steps outlined above. 

10 
 

 

TSP Contributions 

Notify the employee that he/she is eligible for make-up contributions to replace the missed 

employee contributions due to the retirement coverage error in addition to the agency automatic 

1%. Follow the procedures outlined in 5 CFR 11605.14. 

 Raymond J. Kirk, Manager 

 Benefits Officers Training & Development Group 

 Human Capital Leadership & Merit Systems 

Accountability 

Attachments: 

1 Common Retirement Plans and Corresponding Codes 

2 Examples of Distribution of Monies between Retirement 

And Social Security 

11