PERAC's Main Guide - Creditable Service
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Main Guide

     


     Creditable Service
                 

GENERAL REQUIREMENTS


How is creditable service earned?

In general, you earn creditable service toward your retirement allowance for the period during which you contribute either 5%, 7%, 8%, 9%, 11%, or 12% of your salary to the retirement system.

May I buy back creditable service?

  • Re-establishing Creditable Service
    If you terminate your public service and take a refund of your accumulated total deductions and later return to public service, you may re-establish your prior creditable service by buying it back. But, you will begin as a new member, making contributions at the current rate.
 

SEASONAL EMPLOYMENT


How is creditable service calculated for seasonal employees?

  • Full-Time, At Least Seven Months
    Employees whose work is found by their retirement board to be seasonal in nature and who work full-time for at least seven months are entitled to one year of creditable service.

  • Full-time, Less Than Seven Months
    Retirement boards will, on a board by board basis, determine how much full-time seasonal service will constitute the equivalent of one year of service for those who work less than seven months a year.

  

TRANSFER OR RE-ESTABLISHMENT OF MEMBERSHIP


What creditable service requirements pertain to the transfer or re-establishment of membership and retirement benefit eligibility?

  • Two-Year Creditable Service Requirement
    No member who is reinstated or re-enters or who transfers or re-establishes his membership is eligible to receive a superannuation, ordinary disability, or termination retirement allowance until the member has been in active service for at least two consecutive years following the start of the new employment.

  • Exceptions
    The two-year requirement will not apply in the case of any member who is reinstated to active service, re-enters active service, or who transfers his membership from another retirement system, if the member was eligible to receive a termination retirement allowance at the time of his last separation from service, or if the member has rendered service or attained an age so that he would have been eligible to retire if he had continued to be a member of the retirement system from which membership was transferred.

Is the two-year requirement waived when a transfer involves no break in service?

  • Waiver of Requirement
    This requirement will not apply once the member has become eligible to retire from the retirement system from which his/her account was transferred by virtue of attaining an age or earning sufficient creditable service.

  

WORKERS' COMPENSATION


How is my creditable service affected by an absence caused by a work-related injury or hazard?

  • Benefits
    Full creditable service will be awarded to any member-in-service for a period of absence that is attributable to an injury sustained or a hazard undergone during employment that results in total incapacitation and for which Workers’ Compensation benefits are paid. The member receives the creditable service without having to make contributions to the retirement system. Workers’ Compensation benefits received during such a period are not considered to be regular compensation and cannot be used to calculate a retirement allowance.

  

MILITARY SERVICE


Is creditable service earned during a leave of absence to serve in the Armed Forces of the United States?

  • Credit for Military Service Earned During Leave of Absence
    Employees who leave public employment for the purpose of serving in the armed forces, and who are honorably discharged and return to public employment within two years of their discharge from military service, are entitled to have periods of service in the armed forces of the United States counted as creditable service.

Does the law limit how much credit such returning employees are eligible to receive?

  • Creditable Service Limit
    Any military service in excess of four years will not be counted as creditable service, unless such service was involuntary.

Could I receive credit for military service rendered prior to becoming a public employee?

  • Credit for Military Service Earned Prior to Membership Service
    Many retirement systems have accepted local option legislation which would allow veterans to purchase up to four years of creditable service corresponding to their military service.
    •   Please see the definition of veteran under the section of this guide entitled “Retirement Allowance” .

    •   For each year of military service sought, an eligible member is required to pay ten percent of the regular annual compensation that he/she was being paid upon entering the retirement system.

    •   Members may not receive credit for military service for which they have already received credit under the leave of absence provision discussed above.

    •   Members who are veterans should contact their local retirement board to determine if their system has accepted this local option legislation and to determine if they are eligible.
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