§2021 Contributions to fund

Summary

Money must be taken from a participant’s basic pay and put into the retirement fund. A "revised annuity participant" is someone who on December 31, 2012 was not a participant, was not doing qualifying service, had less than 5 years of qualifying service, and then later becomes a participant doing qualifying service. For regular participants, 7% of basic pay is withheld from pay and the employer also adds 7%. For revised annuity participants, 9.3% is withheld and the employer adds 4.7%. The Director deposits the withheld amounts and the employer contributions into the fund. By being paid after these withholdings, participants are taken to agree to the deductions except for their right to benefits under this law. After a participant completes 35 years of creditable service, amounts withheld from pay for later pay periods earn interest. The interest rate was 3% per year through December 31, 1984, and after that it uses the rate in 5 U.S.C. 8334(e); interest is compounded yearly until retirement or death. Those amounts and interest go first to any required deposit under the law. Any extra money is paid as a lump sum after separation or to a beneficiary at death, unless the participant chooses instead to buy an extra annuity or add survivor benefits. If someone was a participant before January 1, 1984 and their service is covered by Social Security but not by certain federal retirement rules, the withheld amount is the percent above minus the Social Security tax under 26 U.S.C. 3101(a).