From Peace Corps Wiki
Employees who are covered under the Federal Employees Retirement System (FERS) or the Civil Service Retirement System (CSRS) are eligible to receive credit towards retirement for their Peace Corps Volunteer service. To do so, you must make a deposit for this period of service.
While you are a Peace Corps Volunteer, no money is deducted from your monthly readjustment allowance for retirement. Your deposit is an amount equal to the money that would have been deducted and put into the retirement fund, plus any accrued interest. The amount you pay to receive retirement credit under FERS is 3% of your monthly readjustment allowance plus interest. Under CSRS the deposit is 7% of your monthly readjustment allowance plus interest.
Deposits made more than two years after October 1, 1993, or more than two years after the date on which the individual making the deposit first becomes a covered employee, whichever is later, must include interest, compounded annually and beginning on the date of the expiration of the two-year period. Please remember, your training period is not creditable service.
Why should you make the deposit? To receive a monthly annuity from the federal government, you must be vested in a retirement system. Being vested in FERS or CSRS requires five years of creditable civilian service. Peace Corps staff positions are limited to 30-month tours, so having your volunteer service credited toward retirement frequently adds enough time to meet the vesting requirement.
Also, under FERS, your retirement annuity is calculated as 1% of the average of your high-three average salary multiplied by your number of years of service. So, additional years will increase the amount of your annuity.
High-3 is $70,000 and 20 years of service
1% of $70,000 is $700
$700 x 20 is $14,000 annuity per year
Adding two years increases the annuity: $700 x 22 is $15,400
Or, if you are under CSRS, your annuity is calculated as 1.5% of your high-3 for your first five years of service, 1.75% of your high-3 for the next five years and 2% of your high-3 for any remaining years.
Once you are hired in a permanent appointment, you may begin the service credit process by completing a SF-3108, FERS Application to Make Service Credit Deposit for Civilian Service or a SF-2803, CSRS Application for Deposit or Redeposit (available at your agency's human resources department). After completing the application, request a Verification of Service letter from Volunteer and PSC Financial Services at the Peace Corps (address provided below), and submit it to your agency's human resources department. Your agency will finalize the application and send it to the Office of Personnel Management (OPM). OPM will then calculate the amount you must pay for retirement credit and bill you directly. Payments are made to OPM.
Receiving a bill from OPM in no way obligates you to make the service credit payment. However, interest will continue to accrue until the payment is made. If you choose not to make the payment, you will not receive credit for your Peace Corps Volunteer service in your retirement calculation.
For your reference, a copy of the Public Law 103-82 allowing Volunteer service to be creditable towards retirement is available in HRM. The CSRS and FERS Handbook is also available on OPM's website. If you have any questions, please contact: Certifying Officer, Volunteer and PSC Financial Services, Peace Corps Headquarters, 1111 20th Street NW, Washington, D.C.20526; or phone 202.692.1770.
 External Links
Peace Corps Volunteer Service Credit for Retirement Official US Peace Corps Website