For federal employees with prior active duty military service, the "Military Buyback" program is one of the most powerful tools available to increase your FERS pension and potentially retire earlier. This guide explains what it is, how it works, and the critical steps you need to take.

What Is Military Buyback?

Military Buyback is the common term for making a deposit into the FERS retirement fund to have your active duty military service treated as creditable civilian service for your pension calculation.

Eligible Service Includes:

• Honorable active duty in the Army, Navy, Air Force, Marines, and Coast Guard.
• Time at a service academy (e.g., West Point, Annapolis), if you graduated.
• Active Guard and Reserve (AGR) time.

What does NOT count: Traditional weekend drills and annual training for Guard/Reserve members (inactive duty) are not eligible.

How Much Does It Cost?

The cost is surprisingly low, especially if you act quickly. The deposit is calculated as:

• 3% of your total basic military pay earned during your eligible service.
• Plus interest, which begins to accrue after a 2-year, interest-free grace period from your civilian service entry date.

Is It Worth It? The Breakeven Analysis

For nearly every FERS employee, the answer is an overwhelming yes. Buying back your military time is one of the best returns on investment available.

Example: An employee with 4 years of military service earned $60,000 in basic pay. Their deposit is 3% of that, or $1,800 (if paid within the grace period). Those 4 years add 4% to their pension calculation. If their High-3 salary is $100,000, that's a $4,000 per year increase to their pension, for life. They break even in less than 6 months of retirement.

The "Double-Dipping" Rules for Military Retirees

You generally cannot receive two federal retirement checks for the same period of service. This is known as "double-dipping."

• If you are receiving a military retirement pension for active duty service, you cannot buy back that time for FERS credit unless you agree to waive your military pension when your FERS annuity begins.
• Exception: If your military retirement is based on a Reserve (gray area) retirement, you CAN receive both your military pension and buy back any periods of active duty to count toward your FERS pension.

🛠️ How to Start the Buyback Process Step-by-Step

The process requires coordination between you, your military finance center, and your agency's HR office.

1. Request Your Military Earnings History: Complete form RI 20-97, Estimated Earnings During Military Service, and mail it to the finance center for your branch of service. This can take several weeks or months.
2. Receive Your Estimated Earnings: The finance center will return the completed form to you. This document is required for the next step.
3. Request Your Deposit Calculation: Submit the completed RI 20-97, your DD-214s, and form SF 3108, Application to Make Service Credit Payment, to your agency's HR or benefits office.
4. Receive Your Calculation and Pay: Your HR office will calculate the exact deposit amount (principal and interest) and provide instructions on how to pay it, either in a lump sum or through payroll deductions.

📎 Official Sources & Forms

• OPM FERS Handbook, Chapter 22: Service Credit
• SF 3108: Application to Make Service Credit Payment
• RI 20-97: Estimated Earnings During Military Service