Buying Colorado PERA service credit

How you earn it

Generally a month of service credit for each month with salary of at least 80 x federal minimum wage ($7.25/hour); less is prorated. School and DPS Division credit is weighted (see highestAverageSalary.schoolServiceCredit). Your PERA Benefits p. 3, Service Credit; School and DPS Service Credit fact sheet PDF pp. 1-2

What you can buy

You can buy service credit based on a refunded/rolled-over DB Plan account or on employment not covered by PERA or another retirement program. Non-covered service costs the actuarial cost of the added benefit, based on HAS, age and membership start date. For members who began on or after Jan. 1, 2007, buying back a refunded account costs the amount refunded plus interest plus 1% of HAS per month purchased. Your PERA Benefits p. 3, Purchasing Service Credit; Purchasing Service Credit p. 4, Cost to Purchase Service Credit

To buy, you must be an active PERA member with at least one year of service credit; purchases must be paid in full before you retire. Understanding Your Benefit Estimate PDF p. 2, Service Credit Years

What a year adds

On a full benefit, each year adds 2.5% of HAS: $150 a month on a $6,000 HAS, for life. In a reduced box it can also move you up your HAS table. Your PERA Benefits p. 7, Defined Benefit Calculation; C.R.S. 24-51-603(1)(a) Weigh that against PERA's quoted cost.

To see how much a bought year is worth to you, compare boxes in the reduced retirement tables, check the one more year examples, or try a PERA 6, age 58, 20 years (reduced) example in the calculator and add years. If you took a refund when you left an earlier PERA job, the leaving PERA page explains what you gave up.

From the sources

• You can buy service credit for a refunded PERA account or for work not covered by PERA or another retirement plan. You must be an active member with at least one year of service, and you must finish paying before you retire.Your PERA Benefits p. 3, Purchasing Service Credit; Understanding Your Benefit Estimate PDF p. 2
• Buying non-covered service costs the actuarial value of the extra benefit, based on your HAS, age and membership date. Buying back a refund costs the amount refunded plus interest, plus 1% of HAS for each month if you joined in 2007 or later.Purchasing Service Credit p. 4, Cost to Purchase Service Credit
• If your membership began on or after January 1, 1999, you need one year of earned service to buy qualified employment and five years to buy nonqualified employment. You can buy up to five years of nonqualified employment and 10 years in all.Purchasing Service Credit p. 1, Who is Eligible to Purchase Service Credit?
• Qualified employment includes U.S. military service, work in a public or private K-12 school not covered by PERA (including schools in other states), public colleges and universities, and federal, state or local government jobs. Private-sector work is nonqualified.Purchasing Service Credit p. 2, Two Types of Employment to Purchase
• Having Social Security, a military pension or a voluntary 401(k), 403(b) or 457 plan for that job doesn't stop you from buying the time.Purchasing Service Credit p. 2, Purchase Based on Employment Not Covered by PERA
• Buying back a refunded account doesn't add to your earned service, isn't used for your HAS, and doesn't bring back the benefit rules of your earlier membership.Purchasing Service Credit p. 2, Purchase Based on a Rolled Over/Refunded Account
• With less than 20 years, bought service also raises your PERACare subsidy: $11.50 a month for each year before Medicare and $5.75 with Medicare, up to $230 and $115.Purchasing Service Credit p. 2, Health Care

Questions

Try more years in the calculator →