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SERS workshop details buying service credit, short‑periods and sick/vacation conversion
Summary
SERS explained optional service purchase types, repayment rules for refunds, payment options, and the conversion chart used to turn unused sick and vacation time into service credit.
A State Employees Retirement System representative spent part of the Countdown to Retirement workshop explaining optional service purchases, how prior refunds and military service can be bought back, and how unused sick and vacation time can convert to service credit.
The presenter outlined common purchase categories: qualifying periods (tier‑specific six‑month blocks for Tier 1 members), short periods (temporary or seasonal work), military active duty (up to 48 months), refunds previously taken (repayment requires 24 months of reemployment) and leave‑of‑absence purchases (often up to 12 months). The representative noted a statutory interest rate used in offers: purchases typically carry a 6.5% annual interest factor, which can make older qualifying periods costly to buy back.
SERS described payment methods: payroll deduction (pretax) as an irrevocable option, tax‑deferred rollovers from deferred compensation or IRAs, post‑tax lump sums, and post‑tax installment agreements. Payroll deductions become irrevocable unless the member retires before the payroll plan is paid off, in which case the remaining balance must be paid at retirement.
The workshop demonstrated the sick/vacation conversion chart used to translate days into months of service credit and walked through an example where a combination of paid and unpaid sick time produced both paid service months (subject to member contribution withholding from the agency lump sum) and free months (unpaid days that convert to service). The presenter recommended saving at least 11 sick and 11 vacation days because, together, those 22 days equate to two months of service credit under the conversion chart.
Members were reminded to submit a request for a cost estimate for optional service purchases through the member services account; SERS accounting prepares the calculation and returns a payment offer. The presenter advised that buying qualifying periods often pays back in a few years in estimated increased monthly benefit, but emphasized members should review the SERS cost estimate before deciding.
