PERAC's Main Guide - Creditable Service
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Main Guide




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?

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. Of note, if a person who is a member of a retirement system as of February 16, 2012 fails to buy back or arrange a payment plan for the buy back of certain prior service before April 2, 2013, such a member will have to pay actuarial assumed interest instead of buy back interest on the purchase. Those who re-enter or re-establish service on or after February 16, 2012 will also have until April 2, 2013 to either buy back certain prior service or arrange for a payment plan, or they must pay actuarial assumed interest instead of buy back interest on the purchase.



How is creditable service calculated for seasonal employees?

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.

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.



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

No member who is reinstated, re-enters, 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.

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?




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

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.

If a member is granted Workers' Compensation for partial incapacity and is employed on a part-time basis by the employer where the injury occurred, full-time creditable service can be granted. The member must make contributions on the regular compensation he or she receives in the part-time employment.



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

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?

For those who leave their public employment to serve in the military and return to service within two years, they will be credited for all the time served. A different provision of the law allows for the purchase of pre-membership military service, as discussed below, and the purchase of such service is limited to four years.

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

As noted above, veterans are allowed 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 or 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 be notified by their local retirement boards of their eligibility to purchase such time. Once so notified, a veteran has 180 days in which to decide whether to purchase such service. Although the retirement board will set the terms of this purchase, generally speaking, the member is not required to purchase this time within the 180 days. He or she must enter into an agreement to purchase the time within the 180 day window.

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