Voluntary contribution

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Voluntary contribution
See also

Voluntary contribution is a variable interest rate determined by the Treasury Department each calendar year, based on the average yield of new investments purchased by the Retirement Fund during the previous fiscal year. The interest credited to each voluntary contributions account is compounded annually on December 31". Interest is accrued until the date of calculation of reimbursement, separation (including retirement) or transfer to a position not subject to CSRS or federal employee retirement system, whichever comes first. If you expect to leave the federal service, you can avoid the period in which your funds will not earn by planning ahead. If you disconnect from the federal service with the right to a deferred pension at the age of 62, interest will accrue until the beginning date of your pension or death, whichever comes first. However, if you disconnect from the federal service with the right to a deferred pension at the age of 62 and request a refund from the voluntary contribution account, the interest will be paid only until the date of this settlement, regardless of whether the pension is deferred[1]

Voluntary contribution is typically used in retirement savings plans such as 401(k) or pension plans. It allows individuals to make additional contributions to their retirement accounts beyond the mandatory contributions required by their employer. This can help individuals save more for retirement and potentially increase their retirement savings. Voluntary contributions can also be used for other savings goals, such as college savings plans or investment accounts.



  1. U.S. Office of Personnel Management, 1998, p.2

Author: Weronika Nowak