Non-Appropriated Fund confusion

A Reader Writes:

I am currently a Non-Appropriated Fund employee. If I switch to a General Schedule position, does my NAF service count toward retirement? Also, would I be able to count my military service towards a GS retirement?

Milt Replies:

NAF employees are federal employees, but not civil service. However, most of the benefits and rights are similar.

In 1987, Congress directed the re-categorization of activities to limit the use of appropriated funds in Morale, Welfare and Recreation programs. In so doing, many positions changed from one employment system to another (civil service to NAF or vice versa) impacting employee benefits and entitlements.

To prevent loss of entitlements, the Portability of Benefits Act was enacted retroactively effective to Jan. 1, 1987. To be eligible for provisions contained within the law, the move between employment systems must have been made without a break in service of more than three days. The law applies whether the move is involuntary or voluntary.

Provisions are applied differently depending on how the move is made; therefore, it is important to consult with your Appropriated Fund and NAF personnel representatives when anticipating a move between the two systems so that you know your entitlements under the law.

The Defense Authorization Act for fiscal 1996 provided new retirement coverage elections for certain employees who moved within one year between the NAF and APF systems after December 31, 1965. It expanded the retirement election provisions of the Portability of Benefits Act.

A Reader Writes:

I have about 5.5 years of NAF service, from 1973 to 1979. In 1979, I joined the civil service and have been in the civil service ever since. I understand that my NAF time now counts toward the computation of my eligibility for retirement but not the computation of my annuity. Is this correct?

Also, I further understand that, if I had switched to the Federal Employee Retirement System (FERS), which I did not, I would be able to buy back my NAF time to apply to the computation of my annuity. Is this correct? If so, this doesn't seem fair, since that information was not available to me when I decided to stay with the Civil Service Retirement System (CSRS). Is anything being done to rectify this oversight?

Milt Replies:

First of all, it is correct that the NAF service will not increase the amount of any future FERS, CSRS, or CSRS Offset annuity to which an employee may be entitled but can be used to meet years of service requirements.

As for other information, here is a useful handbook that may help you answer some of your questions: Portability of Benefits for Moves Between the Civil Service and Nonappropriated Fund Employment Systems.

Zall is a retired federal employee who since 1987 has written the Bureaucratus column for Federal Computer Week. He can be reached at [email protected]


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