Lump-Sum Credit Law and Legal Definition

Lump-sum credit is defined as “the un-refunded amount consisting of--

(A) retirement deductions made from the basic pay of an employee or Member;

(B) amounts deposited by an employee or Member covering earlier service, including any amounts deposited under section 8334(j) of this title [5 USCS § 8334(j)]; and

(C) interest on the deductions and deposits at 4 percent a year to December 31, 1947, and 3 percent a year thereafter compounded annually to December 31, 1956, or, in the case of an employee or Member separated or transferred to a position in which he does not continue subject to this subchapter [5 USCS §§ 8331 et seq.] before he has completed 5 years of civilian service, to the date of the separation or transfer;

but does not include interest--

(i) if the service covered thereby aggregates 1 year or less; or

(ii) for the fractional part of a month in the total service.” (5 USCS § 8331)