Effective Dates: 08/01/2023 - Present Previous | Next

TN 49 (08-23)

GN 02608.103 Exemption Based on Federal Employment Covered Under Social Security

A. Background

Before 1984, civilian employment with the Federal Government was covered under the Civil Service Retirement System (CSRS). In 1987, a second retirement system, the Federal Employee Retirement System (FERS), became effective and covered new hires under Social Security. Federal employees hired between 1984 and 1986 were automatically converted to FERS in 1987. Additionally, during that same year, Federal employees covered under CSRS could elect to switch to FERS. Employees previously covered under CSRS who switched to FERS, or who leave CSRS employment and are later rehired under FERS, have a portion of their FERS benefit computed as a CSRS benefit.

Prior to the Social Security Protection Act (SSPA) of 2004, Federal employees met the “last day” exemption to Government Pension Offset (GPO) if they were in FERS on the last day of service. The SSPA eliminated the “last day” exemption with certain exceptions and established a new GPO exemption effective for claims filed April 1, 2004 or later. The “last day” exemption may still apply if the Federal employee worked their last day of Federal service under FERS coverage prior to July 1, 2004, and the employer considered that last day of service in determining the CSRS pension amount. For additional information about the “last day” exemption, see GN 02608.102. Beginning April 1, 2004, to be exempt from GPO, Federal employees who voluntarily switched from CSRS to FERS before January 1, 1988, must work the last 60 months of Federal employment covered under Social Security. Federal employees who discontinued participation in CSRS or who elected FERS after December 31, 1987, must have 60 months of Federal employment covered under Social Security; the 60 months do not have to be consecutive.

Federal employees may need fewer than 60 months of covered employment if their last day of government service is between July 1, 2004 and March 1, 2009. This transitional provision is explained in GN 02608.107B.3.

B. Definitions

The following definitions are used in this section.

1. Mandatory coverage

Mandatory coverage is Social Security coverage that is mandatorily provided to Federal employees first hired after December 31, 1983 under Section 101 of the Social Security Amendments of 1983.

Mandatory coverage does not apply to workers who return to work after a break in Federal employment while receiving workers’ compensation. These Federal workers may continue under CSRS after they return to work. This continued CSRS coverage is an Office of Personnel Management (OPM) exception to the Social Security coverage rule for a break in service that exceeds 365 days (see FERS Handbook for Personnel Offices Chapter 10, Section 10A1.3-7.D).

2. CSRS Offset employee

A CSRS Offset employee is one who completed at least 5 years of civilian service creditable under CSRS, but then became covered under the Social Security system at some point. The employee’s earnings are covered under Social Security and they continue to contribute to CSRS.

CSRS Offset employees:

  • •

    were hired before January 1, 1984, obtained CSRS coverage for the first time between January 1, 1984 and December 31, 1986, and had at least 5 years of creditable civilian service as of December 31, 1986; or

  • •

    were in CSRS on or before December 31, 1983 and were rehired after December 31, 1983 following a separation from Federal employment exceeding 365 days; and had 5 years of creditable civilian service in CSRS by December 31, 1986.

3. Timely election

A timely election is the election of Social Security coverage before January 1, 1988.

4. Belated election

A belated election is the election of Social Security coverage after December 31, 1987 and before July 1, 1988.

5. Prospective belated election

A prospective belated election is an election of Social Security coverage the employing agency allows after June 30, 1988. The election is prospective only.

6. Retroactive correction

A retroactive correction is an election of coverage OPM or the Merit System Protection Board (MSPB) allows when the employing agency previously denied a person's application for FERS.

C. Policy

1. Federal employees first hired after December 31, 1983

These Federal employees have mandatory coverage under Social Security, and are not subject to GPO.

2. Federal employees first hired before January 1, 1984

Federal employees who have mandatory coverage under Social Security are exempt from GPO if:

  1. a. 

    the worker is a CSRS Offset employee and:

    • •

      the worker filed an application for Social Security spouse’s benefits before April 1, 2004, and was entitled to benefits based on that filing; or

    • •

      the worker’s last day of federal service on which the CSRS pension is based is prior to July 1, 2004; or

    • •

      the worker’s last 60 months (with no period of non-covered employment during these last 60 months) of Federal service was covered under Social Security.

  2. b. 

    the worker is a Legislative branch employee who was mandatorily covered under Social Security as a result of discontinued participation in CSRS before January 1, 1988, and:

    • •

      the worker filed an application for Social Security spouse’s benefit before April 1, 2004, and was entitled based on that filing; or

    • •

      the worker’s last day of federal service on which the pension is based is prior to July 1, 2004; or

    • •

      the worker’s last 60 months of Federal service was covered under Social Security.

  3. c. 

    the worker is a Legislative branch employee who was mandatorily covered under Social Security as a result of discontinued participation in CSRS after December 31, 1987, and:

    • •

      the worker’s last day of federal service on which the pension is based is prior to July 1, 2004; or

    • •

      the worker filed an application for Social Security spouse’s benefit before April 1, 2004, and was entitled based on that filing; or

    • •

      the worker worked in covered Federal employment for 60 months or more during the period beginning January 1988 and ending with the first month of entitlement to spouse’s benefits. The 60 months need not be consecutive.

3. Federal employees who elect FERS coverage

GPO does not apply to Federal employees who elected FERS coverage, including rehired annuitants, who:

  1. a. 

    filed an application for Social Security spouse’s benefits before April 1, 2004 and were entitled based on that filing; or

  2. b. 

    worked their last day of Federal service prior to July 1, 2004, and the employer considered that last day of service in determining the pension amount; or

  3. c. 

    filed a timely election to FERS before January 1, 1988 and worked in Federal covered employment in the last 60 months of Federal service; or

  4. d. 

    filed a belated election to FERS after December 31, 1987, but before July 1, 1988, or was allowed a prospective belated election to FERS after June 30, 1988, or received a retroactive correction; and worked in Federal covered employment for 60 months or more during the period beginning January 1988 and ending with the first month of entitlement to spouse’s benefits. The 60 months need not be consecutive.

OPM or the employing agency determines whether a timely or belated election of coverage is made. A prospective belated election is prospective only; i.e., GPO does not apply effective with the first month that the worker receives a periodic benefit under FERS. If GPO has been applied, remove it beginning with the first month that the FERS benefit is paid.

If a retroactive correction applies, GPO does not apply effective with the first month for which OPM or the MSPB decide a benefit under FERS is payable.

D. Proof of exemption

If an exemption applies, follow instructions in GN 02608.200B.2. to post the GPO exemption to the MBR. Obtain proof of the exemption, which may include:

  • •

    a Detailed Earnings Query (DEQY) showing that covered Federal employment began before January 1, 1988; or

  • •

    a statement from OPM or the employing agency showing that the worker’s Federal employment was mandatorily covered under Social Security; or

  • •

    an Election of Coverage Form (OPM Form 1555) signed by the claimant before January 1, 1988, or if after, no later than July 1, 1988; or

  • •

    a FERS annuity statement from OPM showing an annuity commencement date before January 1, 1988; or

  • •

    a statement from OPM showing an annuity commencement or an election date before July 1, 1988; or

  • •

    a statement from the employing agency showing a prospective belated election was allowed; or

  • •

    a statement from OPM or the MSPB showing a retroactive correction was allowed and a statement from the employing agency showing that the election was made; or

  • •

    a DEQY showing 60 months of covered Federal service for one or more Federal employers.

To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0202608103
GN 02608.103 - Exemption Based on Federal Employment Covered Under Social Security - 08/01/2023
Batch run: 08/01/2023
Rev:08/01/2023