§8343 Additional Annuities; Voluntary Contributions

Summary

Employees and Members can choose to put extra money into a special account in $25 steps, up to 10% of their basic pay for service after July 31, 1920. That account earns 3% interest each year through December 31, 1984, and after that it earns the rate set in section 8334(e), compounded once a year. The account grows until the earliest of payment, leaving for a job not covered by these rules, the start date of a deferred annuity, or death. At retirement, the account buys an extra annuity. Every $100 in the account gives $7 plus $0.20 for each full year the retiree is older than 55. A retiree may choose a smaller extra annuity so they can name someone to get 50% of that smaller amount after their death; the retiree’s extra annuity is cut by 10% and by 5% for each full five years the survivor is younger, up to a 40% total cut. A current or former employee can ask OPM to pay out the account before getting the extra annuity. Once paid out, they cannot add more until they separate from service for more than 3 calendar days and return. If someone dies before retiring, or if annuity payments stop before the account is fully paid out, the remaining balance is paid under section 8342(c).