Personnelist: Staffing

Placing Employee in Correct Retirement Code for CSRS and FERS | Verifying Code Placement | SF-50 Retirement Codes | Refund of ½% Retirement Deductions | Conditions for Secondary Coverage | Mandatory Retirement - CSRS and FERS | Details and Temporary Promotions in CSRS | Details and Temporary Promotions in FERS | Tracking Employee Coverage

REFUND OF ½% RETIREMENT DEDUCTIONS

An employee is entitled to a refund of the extra ½ percent retirement deduction, when the withholding was in error. This is when an employee is having the extra ½ percent deductions and:

  • is not serving in a covered position, or 
  • is not eligible for coverage in a secondary position, and 
  • the retirement monies have not been refunded.

The employee can elect to leave the money in the fund. Any excess deductions not refunded will remain in the retirement account. However, the excess deposits will not accrue interest, since only voluntary excess payments accrue interest, and excess deductions are not considered voluntary payments.

A refund due to erroneous deductions is not considered a claim against the government subject to the four-year statute of limitations set forth in 31 USC 3702(a).

STAFFING RESPONSIBILITIES: The current servicing personnel office must correct the appropriate personnel actions when the retirement code is inaccurate. Corrections are made in accordance with personnel processing instructions for your servicing personnel office.

Copies of the corrections, for erroneous special retirement deductions, must be sent to PAYPERS, Benefits Branch.  Do not send them to your payroll contact. They are not authorized to process corrections and may issue a refund without verifying the employee's intention.

The servicing personnel office must issue a notification to the employee that he/she is eligible to receive a refund for their ½ % retirement deductions.

EMPLOYEE RESPONSIBILITIES: After the employee receives notification of excess retirement deductions from the servicing personnel office, he/she must make a written request to get a refund of the excess retirement monies.

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