Retirement Benefits

It’s Never Too Early to Purchase Service Credit

It's Never Too Early to Purchase Service Credit - Fall 2019

You may be eligible to increase your CalPERS service credit through a service credit purchase.

We offer over 25 types of service credit that eligible members may purchase before their retirement date.

Some of the most common service credit types include service prior to membership, which is employment with a CalPERS-covered employer before you became a CalPERS member; leaves of absence for an employer-authorized absence during normal work hours; and active duty military service prior to CalPERS membership.

Additionally, if you were previously a CalPERS member, left your CalPERS-covered employment, and took a refund of your contributions and interest, you may be eligible to redeposit these funds and restore those years of service credit.

Eligibility requirements vary depending on the type of service credit you are interested in purchasing.

It’s easy to apply. Simply submit a completed costing request form to CalPERS, and if you are eligible, we will send you an election package that includes everything you need to know to make an informed decision.

New Payment Options at Retirement

Are you planning to purchase service credit on or after January 1, 2020? A new law will require you to pay any remaining balance by your retirement date or elect to have your monthly benefit reduced by the actuarial equivalent of the unpaid balance, instead of making installment payments into retirement. An actuarial equivalent reduction (AER) offers an alternative to you to maintain your service credit purchase and receive an increase in your pension benefit.

If you purchase service credit prior to January 1, 2020, you may pay the balance at retirement through a lump sum, convert to an AER, or continue installment payments into retirement.

Be Retirement Ready

The earlier in your career that you elect to purchase service credit, the more time you will have to pay the balance in full by retirement. In addition, purchasing service credit early in your career ensures you the lowest cost.

Learn more about all the service credit purchase types, eligibility, and payment methods by visiting our website. You’ll also find resources and links to our service credit publications and forms.