Last Chance to Purchase Service Credit
Employment Requirements to Apply
You must be an active contributing member of PSERS when you apply to purchase service credit. You
may not apply to purchase service credit if you have already –
- Stopped working.
- Are on an unpaid leave.
- Terminated your employment, even if you have not resigned from your position.
If you recently returned to public school employment having not previously met a vested status, you may need to re-qualify for PSERS membership to apply. If you returned into a full-time position, you may immediately apply to purchase service credit. Please keep in mind that some purchase types do require matching years of service credit or a full year of salary reported to PSERS before the application can be processed. If you were re-hired as a part-time hourly or part-time per diem employee, you must meet the 80-day or 500-hour service membership requirement in the school year in which PSERS receives your application to be able to purchase service.
Types of Service
Here is a list of types of service eligible to purchase:
- Return of refunds (returning previously withdrawn contributions and interest)
- Former uncredited full-time service
- Former uncredited part-time service
- Former uncredited non-qualifying part-time service
- Special sick leave
- Approved leave of absence
- Out-of-state school service
- Service with a County Board of School Directors
- County nurse service
- Cadet nurse service
- U.S. Government service
- Military service
- Maternity leave (occurring before November 1, 1978)
Purchasing Service Not Actually Rendered
You may not purchase service credit to gain additional credit unless you are eligible based on employment, qualifying leave, or military service you rendered. For example: You are credited with 34.90 years of service. During your first year of employment, you started working after the start of the school year. This resulted in 162 days of work and credit for .90 of a year. You cannot apply to purchase the .10 of a year to “round out” your service for time you did not actually work.
Last Chance to Purchase Service Credit
Payment for Approved Purchases
You may choose to pay for the service credit by using one or a combination of three different payment methods: Actuarial Debt Plan, Lump-Sum Payment Plan, or Payroll Deduction Plan. There are exceptions where only one plan may be available to you and it will be noted on the Statement of Amount Due (PSRS-7).
When you submit a purchase of service application within the last 18 months of active employment, it may limit your payment options. You may receive a billing for a purchase too close to your retirement date to select the installment payment plan. If you can start an installment payment plan, it may result in partial payment for the purchase with a remaining balance paid as an actuarial debt placed against the equity in your PSERS account. If your purchase of service request is processed after your retirement application is filed with PSERS, your only option for payment is the actuarial debt payment plan.
The actuarial debt payment plan gives you instant service credit, with the advantage of not having to make any out-of-pocket cash payments. You purchase the service credit by placing a debt against the equity in your future retirement benefit. The debt will be reduced if any lump-sum payments or payroll deductions are made. Interest accrues on the outstanding balance.
At the time of your retirement, any remaining balance will be repaid by a reduction to your monthly benefit spread over your expected (actuarial) lifetime. The Actuarial Debt Plan does not affect your contributions and/or interest in your account.
With few exceptions, the increase in your benefit from the purchase will exceed the reduction from the actuarial debt. Because the Actuarial Debt Plan requires no cash out, it is generally affordable for all members.