§2021 Contributions to Fund

Summary

A portion of a participant’s basic pay must be taken out 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, and had less than 5 years of qualifying service, but later becomes a participant doing qualifying service. For most participants, 7% of basic pay is withheld from pay and the agency also contributes 7%. For revised annuity participants, 9.3% is withheld and the agency contributes 4.7%. The Director must deposit these withheld amounts and agency contributions into the fund. By being a participant, the worker is treated as having agreed to the deductions, and pay after deductions settles the employer’s regular pay obligations except for the fund benefits. Once a participant has more than 35 years of creditable service (as computed under sections 2081 and 2082, not counting unused sick leave under section 2031(a)(2)), amounts withheld after the first pay period that begins after that milestone earn interest: 3% per year through December 31, 1984, then the rate in section 8334(e) of title 5, compounded yearly until retirement or death. Those amounts first go toward any required deposit under section 2082(b); any leftover can be paid in a lump sum (with spouse notice rules) or used to buy extra annuity or survivor benefits. For certain participants who were covered before January 1, 1984 and whose service is Social Security employment but not creditable under some retirement laws, the withheld amount is reduced by the Social Security tax taken from their pay under section 3101(a) of title 26.