Employees Transferred to International Organizations

In cases involving employees who transferred to international organizations (IO), payments and contributions to the retirement and group life insurance funds are based on the rate of pay the employee would have received if they had not transferred to an IO. Therefore, the Agency must establish when a transferred employee would have received a WRI or general pay increase. The Agency must also take into account any promotions made during the period of the transfer.

Any FERS employee who is presently employed under a transfer to an IO abroad and who has not been given the right to elect continuation of FERS coverage must be given the opportunity to elect FERS. As of January 1995, in cases where a CSRS Offset employee continued CSRS coverage, the employee must revert to CSRS Offset coverage. FERS employees who elect coverage will be responsible for retirement contributions retroactive to the transfer to IO. CSRS employees reverting to CSRS Offset must have their payroll records adjusted to reflect CSRS Offset contributions.

Due to the above conditions, the Federal Insurance Contribution Act (FICA) tax is mandatory for all CSRS Offset and FERS employees on a section 3582 transfer to an IO. Whether or not the employee elects retirement coverage, the employee is no longer exempt from FICA tax during IO service. Since FICA is mandatory, employees who were eligible to retroactively continue FERS or CSRS Offset coverage (regardless of the election decision) are subject to FICA tax retroactive to January 1, 1995.