Creditable service

You earn service credit while you are contributing to the MTRS via regular payroll deductions. If you rendered past eligible service, you may also be able to purchase credit for prior employment.

The amount of your creditable service is very important:

• it determines whether you are “vested” for purposes of being entitled to half or all of the interest accumulated in your MTRS account in the event you leave active service and take a refund;
• it determines when you are eligible to receive a retirement benefit; and,
• it is one of the three factors used to calculate the amount of your retirement benefit (the other two being your age and three-year salary average).

How do I know how much creditable service I have?

Currently, our computer system is not programmed to track this information, and, as a result, we do not have or maintain a complete record of your creditable service. We are, however, working on designing and implementing a new system that will track your creditable service and allow us to add historical data.

Until we have installed our new computer system, you are the best source of this information. To estimate your creditable service, see the list of types of creditable service, then add up the number of years of each type of service you have rendered.

If you are nearing retirement and need to know how much creditable service you have so that you may determine when you are eligible to retire, please contact us. We will review your file and provide you with a statement of your creditable service.

What constitutes “creditable service” and can I receive credit for earlier teaching and public service?

“Creditable service” is time that you have worked as a teacher, administrator or other Massachusetts public employee, and for which you have paid or transferred retirement contributions to the MTRS. Creditable service also includes certain military service. You may be able to purchase credit for prior substitute teaching, teaching in an out-of-state public school, certain nonpublic school teaching, vocational work experience, other Massachusetts public service, Peace Corps service and active military service. Also, if you withdrew your retirement account from the MTRS or any other Massachusetts contributory retirement system, you may receive creditable service if you repay the amount withdrawn plus interest, prior to your date of retirement.

Is all creditable service equal?

To the extent that you have, for example, two years of Massachusetts teaching service and two years of out-of-state service that you have purchased, yes—each counts as two years of creditable service. However, we also distinguish between membership and non-membership service.

• Membership service is that which required your membership in the MTRS and during which you contributed to the MTRS via payroll deduction.
• Non-membership service is that which did not require your membership in the MTRS, but is eligible for purchase. Types of non-membership service are: substitute teaching service in a Massachusetts public school; out-of-state public school teaching; nonpublic school teaching; vocational work experience; other Massachusetts public employment; military service; Peace Corps service; and, pre-1975 maternity leave and teaching service in an overseas school for dependents sponsored by the U.S. Department of Defense.

We distinguish between membership and non-membership service for the purpose of crediting part-time Massachusetts teaching service during which you contributed to the MTRS via payroll deduction. For more information, please contact us.

How much does it cost to purchase past service?

Generally, the cost of purchasing past service is based on what you would have paid in contributions during that period (plus interest to date) or what you actually paid and withdrew (plus interest to date). Please refer to the information on each type of creditable service to learn how the cost is calculated for that specific type.

Is it always a good idea to purchase past creditable service?

Often, but not always—depending on how much creditable service you already have, it may or may not make financial sense for you to purchase outstanding service.

If, based on your established creditable service and age, you are not at or near the maximum retirement allowance—80 percent of the average of your highest three consecutive years’ salaries—then, depending on how much outstanding service you have, purchasing it may result in a meaningful increase in your retirement allowance. While the present cost of purchasing the service may seem substantial, the difference in your retirement allowance may allow you to recoup the expense in a short period of time and pay off in the long run.

If, however, you are already eligible to receive the maximum retirement allowance (80 percent of the average of your highest three consecutive years’ salaries) by reason of your established creditable service and age, then purchasing outstanding service will be an expense that will not result in an increase in your retirement allowance.

When must I purchase creditable service?

You must purchase creditable service before the effective date of your retirement. If you wish to purchase out-of-state, overseas dependent school, vocational work experience, nonpublic school teaching service or military service credit, you must do so while you are an active member of the MTRS or while you are on an authorized leave of absence. If you wish to purchase past Massachusetts public school substitute, temporary or part-time teaching service or other Massachusetts public service, you must do so prior to your date of retirement. Because an interest charge is added to the amount due, the cost of purchasing creditable service increases monthly.

How do I purchase creditable service?

While the specifics differ depending on what type of service you wish to purchase, the basic steps are as follows:

• Step 1: You obtain the service purchase application form, if applicable (Please see types of creditable service, above).
• Step 2: You complete and submit the form, supplying us with specific information about the type of service, where and when you rendered it, and what you received as compensation.
• Step 3: We review your form, determine how much service you are eligible to purchase as well as your cost, and send you an invoice.
• Step 4: Depending on your particular situation, you may then pay the total in full, or, if eligible, in payments over time on our installment plan. Or—except if you are purchasing vocational work experience—you may decide to postpone purchasing the service until a later date, if at all. You are under no obligation to purchase service you have been billed for; however, if you choose to defer your purchase, the cost will increase because of interest charges. [Note: You may be able to pay for your service purchase with pre-tax dollars. Please see Purchasing creditable service with a direct transfer or rollover.]

I am participating in RetirementPlus. What types of creditable service count toward the enhanced benefit eligibility requirement of “at least 20 years of membership service with the MTRS (or Boston Retirement System) as a teacher?”

In addition to your regular service during which you contribute to the MTRS via regular payroll deductions, the following two types of purchased service count toward the 20-year “teaching service” requirement:

• repayment of a refund from the MTRS or the Boston Retirement System, and
• if you began service with an MTRS employer on a temporary or part-time basis, the purchase of your mandatory six-month waiting period.

All other types of service do not count toward the 20-year “teaching service” requirement. They do count, however, toward the 30-year creditable service requirement.

Is service rendered as a “consultant” in a school district, or as an “03” employee of the Commonwealth of Massachusetts, eligible for purchase?

No—this type of service continues to be ineligible for purchase.