§8343 Additional Annuities; Voluntary Contributions

Summary

Employees or Members may put in extra money in $25 steps, up to 10% of their basic pay for service after July 31, 1920. The voluntary contribution account is the extra deposits plus interest (3% a year through December 31, 1984, then the rate set under section 8334(e)), compounded yearly until the account is paid out, the person separates or transfers out of covered service, or until a deferred annuity starts or the person dies. At retirement the account can buy an extra annuity: each $100 buys $7 plus $0.20 for every full year the retiree is older than 55. A retiree may choose a smaller extra annuity and name someone to receive half of that smaller amount after the retiree dies; the retiree’s extra annuity is cut by 10% and by 5% for each full five years the named person is younger, but the total cut can’t be more than 40%. A current or former employee may ask for the account paid out before getting an extra annuity; after a full payout they cannot make new deposits until they leave service for more than three calendar days and return. If a nonretired person dies, or if annuity payments stop before the account is used up, remaining amounts are paid under section 8342(c).