Buying VRS service credit

Short answer: active VRS members can buy prior service such as refunded VRS service, military service, leave and other public service; some types are unlimited and others share a combined limit. Bought service counts toward vesting, retirement eligibility and the health insurance credit, and adds a year at your multiplier: $714 a year in Plan 1 on a $42,000 average. See the formula and one more year, or try the Plan 1 example in the calculator with extra years.

What you can buy

Active members may buy prior service: refunded VRS service, no-cost military leave, ported service, sick-leave and VSDP disability-credit conversion at retirement and workers' compensation periods are unlimited; educational leave, FMLA leave, federal service, birth/adoption/death-of-child leave, non-covered service with a VRS employer, non-ported service and other public service are limited to a combined 48 months; up to 48 more months of active-duty military service. Purchased service counts toward vesting, retirement eligibility and the health insurance credit. Plan 1 Handbook p. 25-27, Purchase of Prior Service

What it costs

Two-year window at approximate normal cost (a percentage of the higher of creditable compensation or AFC at purchase), then actuarial equivalent cost. Refunded service costs the refund plus interest at the VRS assumed rate of return. Plan 1 Handbook p. 25, Refunded service; p. 27-28, Cost Windows

Purchase agreements run 6-12 months, 1-4 months of service per month of agreement, one agreement at a time, through the employer. Plan 1 Handbook p. 31, Purchase Agreement Requirements

One month of service for each 173 hours of VSDP disability credits converted. Plan 1 Handbook p. 26

Hybrid plan members are not eligible to port service from Virginia public employers that do not participate in VRS. Hybrid Plan Overview p. 2, Purchase of Prior Service

What a year adds

• VRS Plan 1 (1.7%): $714 a year, $59.50 a month, on a $42,000 average.
• VRS Plan 2 (1.65%): $693 a year, $57.75 a month, on a $42,000 average.
• Hybrid Retirement Plan (1%): $420 a year, $35.00 a month, on a $42,000 average.

In Plan 2, and for Hybrid members who moved over, the multiplier depends on when service was bought. How the formula works.

From the handbook

• Active members can buy prior service: refunded VRS service, other public service, federal service, military service, certain leaves, and more. Purchased service counts toward vesting, retirement eligibility and the health insurance credit.Plan 1 Handbook p. 25, What Is Purchase of Prior Service?
• Most limited service types are capped at a combined 48 months, plus up to 48 months of active-duty military service.Plan 1 Handbook p. 26-27, Limited Purchase Amounts
• You have a two-year window to buy most service at approximate normal cost. After that the price becomes actuarial and usually higher.Plan 1 Handbook p. 27-28, Cost Windows
• At retirement you can convert unused sick leave pay, or VSDP disability credits (one month per 173 hours), into service credit.Plan 1 Handbook p. 26

Questions