Retirees – Service Credit FAQ

You begin to build service credits from the first time deductions are paid into PERA, and a service credit is earned each month a deduction is reported to the association. You cannot exceed 12 credits for any calendar year, even if employed concurrently in more than one public job. It is possible for you to acquire service credit in addition to that earned while contributing on current earnings.

For example, limited credit is given for authorized layoffs. In some instances, you may purchase credit while on an unpaid leave of absence. See the Member Purchases page for more information.

For a Defined Benefit Plan member, a PERA pension is based on a formula using three variables: your age at retirement, the average of your highest five consecutive years’ salary, and your years of service credit. While each of these factors is important, the more service credit you have, the higher the percentage of your average salary you will receive as your retirement benefit.

You will automatically receive service credit while on a paid leave of absence of any type. The normal employee contributions are deducted from your salary and your employer makes employer contributions.

You may also purchase service credit for up to one year of authorized unpaid personal, parental or medical leave, including leave under the federal Family Medical Leave Act. You must make your employee contribution, as well as your employer's contribution.  Payments are based on your salary during the six months prior to the leave and must be made within one year after you return to public service or 30 days after termination of service, whichever is sooner. Annual interest of 8.5 percent will be charged from the date your leave ends until full payment is made. You must return to active public service for a minimum of three months to be eligible for the purchase of any subsequent authorized leave of absence. If more than a year has elapsed since the end of the leave, credit may be purchased on an actuarial basis. However, this can be very expensive.

Yes, if that leave interrupts your PERA-covered service. Upon your return, you may purchase credit for any or all of your leave, up to a maximum of five years. To obtain credit, you must make your regular employee contribution. This is based on the average of the salary you would have earned during your leave. Full payment must be made within three times the length of the leave or five years, whichever is shorter. Employer contributions and any interest due are the obligation of the agency reemploying you when you return from military service.