§2021 Contributions to Fund

Summary

A revised annuity participant is someone who on December 31, 2012 was not a participant, was not working in qualifying service, and had under 5 years of qualifying service, but who later becomes a participant doing qualifying service. For regular participants, 7% of basic pay must be taken out each pay period and put into the fund. For revised annuity participants, 9.3% of basic pay must be taken out. The government also puts money into the fund each pay period: 7% of pay for regular participants and 4.7% for revised annuity participants. The Director must deposit the worker’s deductions plus the government’s contributions into the fund. By being paid after deductions, a participant is treated as agreeing to those deductions. When a participant works past 35 years of creditable service, the amounts taken from pay after that point earn interest. The interest rate is 3% a year through December 31, 1984, and after that it uses the rate from 5 U.S.C. 8334(e); it is compounded each year until retirement or death. Those amounts with interest go first to any required deposit under section 2082(b). Any leftover can be paid in a lump sum to the retiree or beneficiary, or the participant can use it to buy an extra annuity or add survivor benefits. For people who were participants before January 1, 1984 and whose service is covered by Social Security but not creditable under certain civil-service rules, the amount taken from pay is reduced by the Social Security tax under 26 U.S.C. 3101(a).