§8343 Additional annuities; voluntary contributions

Summary

Employees and Members may voluntarily put extra money into a special account in $25 steps. The extra pay can’t be more than 10 percent of their basic pay for service after July 31, 1920. The account equals the money put in plus interest: 3 percent a year through December 31, 1984, and after that the rate set under section 8334(e), compounded once a year to the earliest of payment, separation, transfer out of coverage, the start date for a deferred annuity, or death when a deferred annuity is claimed. At retirement the account buys an extra annuity. Each $100 in the account gives $7 a year, plus $0.20 for each full year the person is over 55 at retirement. A retiree can choose a smaller extra annuity and name someone to get 50 percent of that smaller amount after the retiree dies. The retiree’s extra annuity is reduced by 10 percent, plus 5 percent for each full five years the named person is younger, but the total cut can’t be more than 40 percent. A current or former employee can get the cash account if they apply before taking the extra annuity. After receiving the cash, they cannot make more deposits unless they leave service for more than 3 calendar days and then return under the same coverage. If a nonretired employee or Member dies, the account is paid as described in section 8342(c). If annuity payments stop before the full account is paid out, the remaining balance is also paid under section 8342(c).