Programming Error Forces DFAS to Issue CSRS Offset Program Refunds
It seems the DFAS payroll system has been erroneously taking too big a retirement savings plan contribution from the pay checks of federal civilian employees in the CSRS Offset program serviced by DFAS due to a programming error.
A majority of federal employees’ retirement plans are housed in either CSRS or the Federal Employees Retirement System (FERS). However, CSRS Offset houses the retirement plans of federal employees who were in CSRS for five years or more before FERS came along in 1987, and then quit and joined federal employment again after a year or more.
A letter sent by DFAS to those affected by the error explains that when a federal employee in the CSRS Offset program serviced by DFAS started earning enough to hit the maximum amount of Social Security contribution, the DFAS payroll would prematurely hike the CSRS Offset contributions to the full withholding rate.
So these employees were over-deducted in between these two points and paid more than they should have into the CSRS Retirement Fund. This went on until the system was fixed starting from the December 28, 2013 pay period.
DFAS Provides Refunds for Federal Employees in CSRS Offset Program
According to federal law, the agency is allowed to provide refunds for this error only for the six years prior to the date on which the error was discovered, which in this case was Feb 18, 2012. So this set of CSRS Offset will be getting the back pay and interest starting from February 18, 2006, through to the pay period ending December 14, 2013.
Those who are already retired and have started receiving retirement annuity benefits, OPM will adjust your annuity payments to account for the refund. Current and former federal employees who were in the CSRS Offset plan serviced by DFAS in between 2006-2013 should contact DFAS for more information about the refund (call 1-800-729-3277).