Let's do an example:
Take two people.
1. Jack - had five years in the military
2. Jill - had four years in the military
They both enter the FAA on the exact same date, 9-1-2008, and get assigned the same facility ZXX
Jack will have the seniority, because as it is written in the FAA/NATCA contract, if the Service Comp Date (SCD) is the same, they refer to military time, and since Jack has more years in the military than Jill, Jack will have more seniority.
Now if Jill entered the FAA on 8-1-2008 and Jack entered on 9-1-2008, Jill would have the seniority because her SCD is 1 month prior to Jacks. You only use military time when there is a case that the SCD is the same.
For the issue of retirement, you can choose to buy back your military time or not. I believe you get a few years to buy it back interest free...after the three years or so, your military times start to accrue interest, so if you think you are going to retire with the FAA, it benefits you more to start buying back the time as soon as you get in. You can get the form from your union rep. You don't have to buy it back all at once, you can do allotments, where they would take out $50 a paycheck so it doesn't feel like much.
Once you buy your time back, say in the case of Jack. He buys back his 5 years of military time. He will then get to add 5% to his retirement.
Retirement can get confusing as there is "good time" in which you can earn 1.7% a year for your first 20 years...in order to qualify for "good time" you have to spend at least 20 years as an air traffic controller in an operational position. A desk job ATC position usually doesn't qualify. If you do 19 years of ATC and then move to an ATM position and then retire, you will not qualify for good time and only receive 1% for each year of service. (That was a little off subject, but very useful information).
So...let's just say Jack spends 25 years as an air traffic controller and buys back 5 years of his military time. He will get 1.7% per year for his first 20 years which would be 34%....he would get 5% for the remaining 5 years left he had as a controller because you now get 1% for each year after 20 instead of the 1.7%...and he would get the additional 5% for the military time he bought back. That brings Jack to a total of 44%. So Jack will get 44% of his highest three years as an air traffic controller...including the locality pay he was making at the facility he retired from.
If he didn't buy back his military time, he would only be getting 39% of his high three....however, his military time still counts towards his seniority for time at a facility, and will help to break ties at work with other controllers that have the same SCD. Myself and another controller have the same SCD at my facility, except he has 2 years more military time than I do, so even though he checked in after me, he is higher than me in seniority.
Hope this helps...