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Pensions and Benefits
PURCHASE OF SERVICE CREDIT

Public Employees' Retirement System (PERS) — Teachers' Pension and Annuity Fund (TPAF)
Police and Firemen's Retirement System (PFRS)

General Information | Purchase Cost Estimates | Applying for a Purchase
Paying for a Purchase | Direct Rollovers | USERRA Service | Purchasing Union Service


Please Note: The Purchase Application must be submitted online through MBOS. Paper applications are no longer accepted.

GENERAL INFORMATION ABOUT PURCHASING SERVICE CREDIT

Since your retirement allowance is based in part on the amount of service credit posted to your account at the time of retirement, it may be beneficial for you to purchase additional service credit if you are eligible to do so.

Only active members of the retirement system are permitted to purchase service credit. An active member is one who has made contributions to the retirement system within two years of his or her purchase request and who has not retired or withdrawn his or her contributions.

Before you apply to purchase additional service credit, please read the fact sheets listed below. These fact sheets contain all the information you need to know as you begin the process of purchasing service credit.

ONLINE PURCHASE CALCULATOR AND TELEPHONE ESTIMATES

  • An online Purchase Estimate Calculator is available in the Member Benefits Online System (MBOS) (Registration is required).
    — Registered MBOS users Log on here — new users Register for MBOS here.

  • To hear a Purchase Estimate over the phone, PERS, TPAF, and PFRS members should call the Automated Information System at (609) 292-7524.

    Online and telephone estimates are based on your current posted salary, however, when the actual purchase cost is calculated by the Division, your highest pensionable salary will be used.

APPLYING TO PURCHASE SERVICE CREDIT

  • Purchase ApplicationIn order to purchase service credit, you must first obtain a quotation of the service that qualifies for purchase and the cost to purchase that service. You must first file a Purchase Application with the Division of Pensions and Benefits. Upon receipt of your application the Division of Pensions and Benefits will begin the process of verifying your eligibility to purchase service so you can obtain a Purchase Cost Quotation Letter.

    The Purchase Application is only available online and must be submitted through a personal account with the Member Benefits Online System (MBOS).

    — Registered users: Log on to MBOS!

    — New users: Register for MBOS! (MBOS registration is required)

Note: Paper Applications to Purchase Service Credit are no longer accepted.
Paper applications received by mail will be returned with directions for using MBOS.

The only exceptions to the online application requirement are for:

— "Multiple Members" of the PERS or TPAF;

— Members requesting the purchase of Military Service after Enrollment under USERRA; or

— Members requesting the purchase of Leave of Absence for Union Representation.

PAYING FOR YOUR PURCHASE OF SERVICE CREDIT

After you apply and are found eligible to purchase service credit, you will receive a Purchase Cost Quotation Letter listing the service credit you may purchase and the cost to purchase that service.

If you agree to authorize the purchase, you may pay for your purchase of service credit with:

  • one lump-sum payment;

  • by having extra payroll deductions withheld from your pay; or

  • by making an initial down payment and having the remainder paid through payroll deductions.

See the purchase fact sheets for more details on these payment methods.

DIRECT ROLLOVER/TRUSTEE-TO-TRUSTEE TRANSFER OF FUNDS
FOR THE PURCHASE OF SERVICE CREDIT

Members of the PERS, TPAF, or PFRS who are eligible to purchase additional service credit may elect to pay for their purchase by rolling over tax-deferred funds from another retirement plan. The procedures for a direct rollover or trustee-to-trustee transfer vary depending on the source of the funds and only certain types of distributions are eligible for rollover/transfer treatment. See the information in the Rollover/Transfer Request packet for detailed information.

You may also want to review the "Frequently Asked Questions" on our Purchase Rollover/Transfer Q&A page.

ROLLOVER/TRANSFER FORMS AND INFORMATION

  • Rollover/Transfer Request for the Purchase of Service Credit Adobe PDF (140K) — Contains complete instructions along with the application for rolling-over or transferring funds from another qualified retirement plan for the purchase of service credit. Do not complete this rollover request unless you have already received a Purchase Cost Quotation Letter from the Division of Pensions and Benefits that indicates the type, amount, and cost of any service you are eligible to purchase.


  • Purchase Rollover/Transfer Q&A — "Frequently Asked Questions" about the rollover or transfer of funds for the purchase of service credit.

  • Letter of Acceptance Adobe PDF (70K) — Confirms to your disbursing plan or financial institution that our plan is a qualified plan and we will accept a direct rollover or direct trustee-to-trustee transfer.

PURCHASE REQUESTS FROM "MULTIPLE MEMBERS" OF THE PERS OR TPAF

A "Multiple Member" is a PERS or TPAF member who is employed and reported to the retirement system by more than one participating employer at the same time. Multiple Members cannot use the online Purchase Application in MBOS.

If you are a Multiple Member, request a purchase of service credit by sending a letter to the Purchase Section of the Division of Pensions and Benefits. In the letter you must indicate that you are employed as a Multiple Member, identify the type of purchase requested, the employer name(s), and dates of service.  Also be sure to include your name (former names if applicable), address, pension membership number or Social Security number, daytime phone number, and your current employer.

  • Upon confirmation of the Multiple Member status, the Purchase Section will begin the verification process for the purchase request.

  • If you do not have Multiple Member status, the request will not be processed. Instead you will be sent instructions on submitting the purchase request through MBOS.

PURCHASE OF USERRA SERVICE
MILITARY SERVICE AFTER ENROLLMENT

The federal Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) provides that a member of a State-administered retirement system who leaves employment to serve on active duty is entitled to certain pension rights upon return to employment with the same employer. The time in military service is to count, for vesting and retirement eligibility purposes, as though the employee had not left. However, the member will, at a minimum, have to make the pension contributions normally required to have the military service time included in the calculation of the retirement benefit.

When an employee returns from uniformed military service to employment covered by the same retirement system within the time frames specified under USERRA, the employer should notify the Division of Pensions and Benefits no later than 30 days after the employee’s return by submitting a Request for USERRA-Eligible Service form Adobe PDF (8K).

Once notified, the Division will annotate the employee’s pension account to reflect the USERRA credit for benefits eligibility and will provide the employee with a quotation for the cost for purchasing the pension service credit so that it counts toward the calculation of benefits.

For additional information see Fact Sheet #36, Military Service after Enrollment and USERRA Adobe PDF (33K)

PURCHASE OF LEAVE OF ABSENCE FOR UNION REPRESENTATION*

Chapter 198, P.L. 1989, and Chapter 368, P.L. 2005, permit members of the TPAF or PERS who are on an approved leave of absence as an elected or appointed officer or representative of a local, county, or State labor organization which represents public employees, to purchase service credit for such service.

*Note: Members on other types of Leave of Absence must return to active employment and request the purchase of service credit using the online application in MBOS.

 
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