NAF Portability


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The Portability of Benefits for NAF Employees Act, Pub. L. 101-508, was enacted in 1990 to provide portability of pay and benefits for employees moving between NAF and APF positions. Under the Portability Act, employees who move with a break in service of no more than three days between DoD NAF and DoD APF positions may be eligible for pay, leave, reduction-in-force, and retirement benefit protection. Section 1043 of Pub. L. 104-106, enacted in 1996, expanded the authorities provided by the Portability Act, primarily in the area of retirement coverage elections. Section 1131 of the National Defense Authorization Act for Fiscal Year 2002, Pub. L. 107-107, further expanded the retirement election opportunity to make it easier for employees to continue retirement coverage after moving between NAF and APF positions.

Under current retirement portability law, eligible employees who move with a break in service of no more than one year between DoD or Coast Guard NAF positions and retirement covered civil service positions in any agency may elect to continue retirement coverage in the losing employment system’s retirement plan. Additionally, Pub. L. 107-107, section 1132, permits employees in CSRS and Federal Employees Retirement System (FERS) to use prior NAF service to qualify for an immediate retirement. Credit for NAF service under this law will not result in higher CSRS or FERS annuity benefits.

Under title 5, United States Code (5 U.S.C.) 2105(c), with certain exceptions, Nonappropriated fund (NAF) employment is not considered to be Federal service for purposes of laws administered by the Office of Personnel Management (OPM). NAF employee benefits, including retirement, health, and life insurance coverage, are not subject to requirements applicable to civil service positions. Therefore, unless specifically provided by law, NAF service is not creditable for purposes of civil service benefits, nor is service in an appropriated fund (APF) position creditable for purposes of DoD NAF benefits. The handbook provides information about those laws and regulations that provide service credit and other portability of benefits for employees moving between NAF and APF civil service positions.

The Nonappropriated Fund Instrumentalities (NAFI) Employees’ Retirement Credit Act of 1986, Public Law (Pub. L.) 99-638, was the initial law to permit civil service retirement system credit for former NAF service. That law provides Civil Service Retirement System (CSRS) credit for service in certain morale, welfare, and recreation (MWR) positions after June 18, 1952, but before January 1, 1966.

For information on Portability laws and procedures visit the NAF HR Office.