Michigan · MPSERS · Buying service credit

Buying MPSERS service credit

Basic and MIP members can buy some kinds of service. Pension Plus and Pension Plus 2 members can't. Here are the rules, and a trap with retiree health.

Who can buy

Types of service and costs

Types of service and costs (Michigan MPSERS)
TypeCostLimit
Parental leaveActuarial cost5 years
Nonpublic educational serviceActuarial cost5 years
Out-of-system public education service post-19745% of highest previous fiscal year salary15 years on a matching basis
Active duty military (intervening)No charge in most cases6 years
Active duty military (nonintervening)5% of highest previous fiscal year salary5 years (6 combined)
Sabbatical leave post-19815% of highest previous fiscal year salary1 year per sabbatical

Check with MPSERS From ORS's 2017 handbook (dated). Your Retirement Plan (R0611C, May 2017; dated), p. 26, Service Credit Costs and Limits (2017; UBI since closed by MCL 38.1369f(5))

Not settled in the sources Check with MPSERS

A few details (what buying service costs, refund interest, some death and disability rules) are only in ORS's May 2017 handbook.

We show them labeled as dated. Check the current rules with ORS.

Service credit purchase types and costs, pay-period caps other than weekly/biweekly, refund interest, the default survivor provision, and some disability details have no newer saved source.

Most purchased credit counts only once vested and, for match-type credit, only up to the service earned in MPSERS. Your Retirement Plan (R0611C, May 2017; dated), pp. 24-25

Service bought before Feb. 1, 2013 (or under a payment plan in effect then) and certain military / WWC credit counts at 1.5%; service bought on or after Feb. 1, 2013 counts at 1.25% under the default choice. MCL 38.1384b(1)(b)-(d), (2)(b)

The Reciprocal Retirement Act (1961 PA 88) can combine other Michigan governmental service to qualify (not to increase the benefit). ORS web page: Qualifying for Your Pension, Counting Other Michigan Government Public Service; Planning Your Retirement (R0613C, 5/26), p. 5

What a year adds

Each year adds 1.5% of your final average compensation a year. With a $35,000 average that's $525 a year, about $43.75 a month (less at 1.25%). Planning Your Retirement (R0613C, 5/26), p. 10, Calculating your pension ('FAC x Pension factor x YOS'); MPSERS annual report FY2025, p. 25, Regular Retirement; MCL 38.1384(1)

The retiree health trap

Credit purchased on or after July 1, 2008 that lets you retire earlier delays the insurance subsidy to age 60 or the date you would have been eligible without it, whichever comes first. Planning Your Retirement (R0613C, 5/26), p. 26, Delayed subsidy; MPSERS annual report FY2025, p. 30; MCL 38.1391(10)

ORS examples
  • Jon needs his 2 purchased years to qualify for the early reduced pension, so his subsidy is delayed two years. Delay: 2 years.
  • Sara could retire early reduced without the purchase; she uses it to retire with the full pension, so her subsidy is not delayed. Delay: 0 years.
Planning Your Retirement (R0613C, 5/26), p. 26, Jon's and Sara's service credit
Not settled in the sources Check with MPSERS

For MIP members with 30 years, R0613C says anyone who bought service must be at least 46; ORS's web page and the law say this applies to universal buy-in credit.

If you enter purchased years that you need to reach 30, we apply the age-46 minimum.

R0613C (Rev. 5/26) p. 4 says 'If you purchased service credit, you must be at least age 46'; the ORS Qualifying page and MCL 38.1369f(3) say universal buy-in credit. The engine applies the minimum whenever purchased years are needed to reach 30 (the broader reading).

Related guides

Bought years go into the pension formula like earned years. They can let you retire earlier, but check the retiree health delay before you buy.

What the sources say

Questions

Can I buy service credit in MPSERS?

Basic and MIP members can, after at least 2 years of service, while still working, and must pay it off before retiring. Pension Plus and Pension Plus 2 members can't buy or transfer service.

Can I still buy universal buy-in ("air time")?

No. Universal buy-in couldn't be started after September 29, 2017.

Does buying service affect retiree health?

It can. Credit bought on or after July 1, 2008 that lets you retire earlier delays the insurance subsidy to age 60, or to the date you'd have qualified without it, whichever comes first.

Add purchased years in the calculator →

Unofficial guide. MPSERS and the Office of Retirement Services decide. Get a cost statement from ORS before you buy.

Source: Planning Your Retirement (R0613C), Michigan Office of Retirement Services, Rev. 5/26, pp. 4, 5, 26. Michigan law, 1980 PA 300: MCL 38.1360; MCL 38.1369f; MCL 38.1391; MCL 38.1381c; MCL 38.1384b; MCL 38.1343b. Your Retirement Plan (R0611C), May 2017 (dated). MPSERS Annual Comprehensive Financial Report, FY ended Sept. 30, 2025, p. 30. ORS web pages saved Nov. 12, 2026: Qualifying for Your Pension. Last reviewed .