Computing Your Service
Understanding your service computation date and its importance to your potential retirement income.
If I asked you to explain your service computation date, you might be able to tell me some things about it. Maybe you would know that there are different kinds of SCDs. Maybe you could say that you have had continuous service throughout your government career and your SCD date for retirement purposes reflects the first day you became a federal employee. Or, you could tell me that the date you were hired as a civilian was backed up by three years because you had a period of active-duty service in the Army.
If so, consider yourself lucky. Not all federal employees feel as confident about their service computation date. I have always said that this is a subject that federal employees should focus their attention on when planning for retirement, whether they are covered by the Civil Service Retirement System or the Federal Employees Retirement System. If you understand the rules for determining exactly how much service you have accrued, then you can more easily understand your retirement computation.
Many Different Dates
Service computation dates are used to determine the amount of government service creditable toward eligibility for a specific benefit or entitlement. You may be familiar with the SCD shown on the Notification of Personnel Action form (Standard Form 50) that documents all of an individual's personnel actions, such as employment, promotions, transfers and separation. But that's just one kind of SCD. There are others calculated for annual leave, within-grade pay increases, Thrift Savings Plan participation, reductions in force and retirement.
Remember, just because you have received credit for service in your "leave" service computation date doesn't mean you automatically get credit for this service for purposes of retirement eligibility or benefits.
SCDs do not necessarily reflect a specific date when something happened. Instead, they establish a "virtual" starting date for continuous creditable service. If there are several separate periods of previous service, they are added together. The total years, months and days of previous service are then used in the SCD calculation.
Suppose, for example, that Ken is hired to work as a civilian at the Defense Department on May 28, 2007. His SCD for leave accrual would be computed by figuring the difference between this date and any previous creditable federal service. So if Ken had served three years, 11 months and 27 days on active military service, his SCD would be computed as follows:
2007 - 5 - 28
- 3 - 11 - 27
2003 - 6 - 1
As you can see, subtracting dates is a little tricky and to do so accurately, you must write the dates backwards: year/month/day. The order of subtraction is to start with the "days" column and work your way over to the left. When subtracting 11 months from 5 months, you'll need to borrow "a year" (adding 12 months to the 5 already in that column) from the year column. This is how 11 from 5 = 6. Additionally, since 2007 was reduced to 2006 (because of the "borrowed" year), now 3 from 2006 = 2003.
When Ken plans to retire many years from now, his FERS retirement SCD will be the same, as long as he pays his military service credit deposit. To understand service credit deposits, see the following previous columns: Military Service Deposits: http://www.govexec.com/dailyfed/0206/022406rp.htm
Civilian Service Deposits: http://www.govexec.com/dailyfed/0206/021006rp.htm
Redepositing Refunds: http://www.govexec.com/dailyfed/0206/021706rp.htm
Different Kinds of Service
Another thing to remember is that when it comes to calculating a service computation date, not all federal service is treated the same. Here are some examples of different types you need to watch out for:
- Work in a nonappropriated fund instrumentality
- Congressional service
- Peace Corps or VISTA volunteer service
- Periods of service where retirement contributions were refunded
- Military service
- Seasonal work, summer jobs and casual post office employment
- Details to international organizations
- Work for the District of Columbia
- Service as a National Guard technician
- Service under a different retirement system
To make matters more confusing, the rules for service credit have changed over the years. I've addressed some of the changes in previous columns:
Part-Time Service Credit: http://www.govexec.com/dailyfed/0307/030207rp.htm and http://www.govexec.com/dailyfed/0307/030907rp.htm
Uniformed Services Employment and Reemployment Rights Act: http://www.govexec.com/dailyfed/0307/031607rp.htm
Mixing Military and Civilian Retirement Benefits: http://www.govexec.com/dailyfed/0606/063006rp.htm
Over the next two weeks, I'll look into a couple of other types of service where the rules have changed.
Tammy Flanagan is the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars. She has spent 25 years helping federal employees take charge of their retirement by understanding their benefits.