Gary Benton Logsdon and Karen Ruth Logsdon - Page 4

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          contribution is withheld.  Malbon v. United States, 43 F.3d 466,            
          467 (9th Cir. 1994).  Contributions by the employing agency and             
          any accrued interest are taxable upon distribution to the                   
          eligible employee.  Secs. 72, 402(a).                                       
               Federal employees who met the retirement eligibility                   
          requirements and retired after June 5, 1986, could elect the                
          basic annuity or the alternative annuity.  5 U.S.C. secs.                   
          8342(a), 8343a.  The basic annuity is determined by years of                
          service and salary at retirement.  5 U.S.C. sec. 8339.  The                 
          alternative annuity provides the employee with a lump-sum credit            
          and a reduced annuity.  5 U.S.C. sec. 8343a.  A lump-sum credit             
          is the unrefunded amount of the employee's contributions and                
          deposits covering earlier service.  5 U.S.C. sec. 8331(8).2  The            
          present value of the alternative annuity is designed to be the              

               25 U.S.C. sec. 8331(8) (Supp. 1991) defines a lump-sum                 
          credit, in part, as the unrefunded amount consisting of:                    
               (A) retirement deductions made from the basic pay of an                
               employee * * *;                                                        
               (B) amounts deposited by an employee * * * covering                    
               earlier service, including any amounts deposited under                 
               section 8334(j) of this title; 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 * * * separated or                
               transferred to a position in which he does not continue                
               subject to this subchapter before he has completed 5                   
               years of civilian service, to the date of the                          
               separation or transfer * * *                                           

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