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A Guide to Your CalPERSService CreditPurchase Optionslearnconnectdecide

Learn About Your Service Credit OptionsYou may be eligible to increase your CalPERS service credit througha service credit purchase, which may help secure your financial future.This publication describes various types of service credit you maybe eligible to purchase, and helps you determine whether the increasein your future retirement benefits is worth the cost.After reading this publication, you will know whether you may beeligible for a particular service credit type and what process you needto follow to request cost information and elect the purchase. We willdetermine your actual eligibility once we receive your request.You must be a CalPERS member to purchase service credit. Thereare many conditions that must be met in order to become a CalPERSmember. If you are not sure you are a member, please contact youremployer for more information.Service credit is an important component in determining your futureretirement benefit. Your retirement benefit is based on your:Years of service credit Age at retirement Retirement benefit formula Final compensation (your highest salary averaged over one or three consecutive years, depending on your employer’s contract)Service credit accumulates on a fiscal year basis (July 1 through June 30).You may only earn 1.000 year of total service credit per fiscal year. To earna full year of service credit during a fiscal year, you must work at least: Hourly pay employees – 1,720 hours Daily pay employees – 215 days (working full time) Monthly pay employees – 10 months (working full time)

ContentsTerms and Definitions. . . . . . . . . . . . .2Types of Service Credit Purchase. . . . . . . . .3Present Value Cost Method Types . . . . . . . .5Pay and Contribution Rate Cost Method Types. . .10Redeposit Cost Method Types. . . . . . . . .14State Second Tier to First Tier Conversion. . . . .16How to Request Cost Information. . . . . . . .18Purchasing Service Credit . . . . . . . . . .19How to Contact Us. . . . . . . . . . . . .25Visit Your Nearest CalPERS Regional Office. . . .26Privacy Notice . . . . . . . . . . . . . .27

Terms and DefinitionsActive CalPERS MembersPublic agencies consist of:You are currently employed with a CalPERS-coveredemployer . This applies to state employees, classifiedschool employees, and employees of cities, counties,and public agencies that contract with CalPERS . City, county, or district School districts with public agencycontracts (school districts with safetyemployees) Los Angeles County Office of EducationInactive CalPERS Members San Diego County Office of EducationYou are no longer working for (or are on a leave ofabsence from) a CalPERS-covered employer, but youhave contributions and/or service credit on accountwith CalPERS .State and schools consist of: State of California California State University (CSU) School districts and county schoolsRetired CalPERS MembersYou are retired from CalPERS .Optional MembersThe following are considered optional members: A state employee who was appointed by theGovernor, Lieutenant Governor, AttorneyGeneral, Controller, Secretary of State,Treasurer, or Superintendent of PublicInstruction and is exempt from civil service . An employee of the California State Senate orAssembly whose wages are paid from fundscontrolled by either body . Some officials elected or appointed to a fixedterm of office with a city or county . (This mayinclude city attorneys and elected/appointedofficials of schools and contracting agencies;eligibility is determined by the dates of yourterm of office .)2

Types of Service Credit PurchaseCalPERS offers several types of service credit .The cost for purchasing service credit is determinedusing methods established by California law .These methods can differ depending on yourtype of membership (state, school, or publicagency) and the service credit you are requesting .Also, the cost to purchase service credit will increasethe longer you wait to request cost information .the cost methods we use for different types ofservice credit purchases . The methods used tocalculate service credit include the present valuemethod, the pay and contribution rate method, theredeposit method, and the tier conversion method .The different cost methods will be explained indetail at the end of each cost method section .Use the following table to determine which typeof service credit purchase you would like to learnmore about .The information in this publication has beenorganized by cost method to help you understandPresent Value Method TypesRefer toAlternate Retirement Program (ARP)Page 5Comprehensive Employment and TrainingAct (CETA)Page 6FellowshipPage 6Leave of Absence*Page 7Military*Military Service Credit Options(PUB 15)Peace Corps, AmeriCorps VISTA, or AmeriCorpsPage 8Pay and Contribution Rate Method TypesRefer toBase Realignment and Closure (BRAC) FirefighterPage 10LayoffPage 11Military Leave of AbsenceMilitary Service Credit Options(PUB 15)National GuardNational Guard Benefits(PUB 11)Optional Member ServicePage 11Prior ServicePage 12Service Prior to Membership (SPM)*Page 12Temporary Disability Leave of Absence (TDA)Page 13* These are the most commonly requested types of service credit .Graphic continued on next page 3

Types of Service Credit Purchase (continued)Redeposit Method TypesRefer toCommunity Property RedepositPage 14Local System RedepositPage 14Reciprocal RedepositPage 14Redeposit of Withdrawn Contributions*Page 15OtherRefer toTier Conversion*Page 16* These are the most commonly requested types of service credit .4

Present Value Cost Method TypesAlternate Retirement Program (ARP)The following types of service creditpurchase are calculated using the presentvalue cost method:If you were a new, first-time state miscellaneous orindustrial employee hired with the State of Californiafrom August 11, 2004, through June 30, 2013, youwere automatically enrolled in ARP (administered bythe California Department of Human ResourcesSavings Plus Program) for your first two years ofemployment . You did not receive CalPERS servicecredit for these first two years . Alternate Retirement Program (ARP) Comprehensive Employment and Training Act (CETA)FellowshipLeave of AbsencePeace Corps, AmeriCorps VISTA, orAmeriCorpsMilitary – Refer to Military Service CreditOptions (PUB 15)If you did not elect to transfer your ARP time toCalPERS during your three-month election period,you may be eligible to elect this service credit .If eligible, you must purchase all of your ARPservice credit .You are not eligible to request these service credittypes if any of the following apply: You are retired . The service you are requesting has been creditedin any other public retirement system . The service you are requesting cannot be verified .(Based on the service credit type and youremployer category, the service must be certifiedby your employer, CalPERS, or a third-party entity .) You do not meet the eligibility criteria as explainedin this publication .You may be eligible to purchase ARP servicecredit if 5You did not transfer your ARP service creditduring your three-month ARP election period, orYou separated from employment prior to yourthree-month ARP election period and receiveda distribution of your ARP contributions fromthe California Department of Human Resources .

Present Value Cost Method Types (continued)Comprehensive Employmentand Training Act (CETA)FellowshipFellowship service is time worked for the Assembly,Senate, Executive, or Judicial AdministrationFellowship program . If eligible, you must purchaseall available Fellowship service credit . There is nolimit to the amount of Fellowship service credityou can purchase .CETA service worked with a CalPERS-coveredemployer may be creditable by purchase after youbecome a CalPERS member . If eligible, you mustpurchase all available CETA service credit . Thereis no limit to the amount of CETA service credityou can purchase .You may be eligible to purchase Fellowship servicecredit if You may be eligible to purchase CETA servicecredit if You worked under CETA for a federal- or statesponsored program from 1973 to 1982, such asthe Public Employee Program, Public ServiceEmployment, Disabled Veterans OutreachProgram, Public Service Employment Program,or Cal Esteem .You cannot purchase Fellowship service credit if You cannot purchase CETA service credit if You worked for the Assembly, Senate, Executive,or Judicial Administration Fellowship program .The employer where the service was earneddoes not currently have a retirement contractwith CalPERS, orYour service is excluded by California lawor by your employer’s retirement contractwith CalPERS . You worked for a contracting agency that doesnot provide the Fellowship service credit typeoption, orThe employer where the service was earneddoes not currently have a retirement contractwith CalPERS, orYour service is excluded by California lawor by your employer’s retirement contractwith CalPERS .CETA and Fellowship service may needto be certified by an authorized employerrepresentative . Refer to the “EmployerCertification” section on page 12 .6

Present Value Cost Method Types (continued)Leave of AbsenceA leave of absence is time during which youremployer authorized you to be absent from yournormal work hours . By California law, some leave ofabsence types are not eligible for CalPERS service credit, even if your employer has approved the leave .You must have been a member of CalPERS at thetime of your leave of absence in order to purchaseservice credit for that leave period .Leave of Absence TypeDefinitionMaternity/Paternity Leave of AbsenceTime off for the birth or adoption of a child . You can purchaseup to one year of service credit per leave of absence period .Educational Leave of AbsenceTime off to pursue higher education . You can purchase a maximumof two years of service credit for all educational leaves combined .Service Leave of AbsenceTime off to serve with a college or university; a local, state, federal,or foreign government agency; or certain nonprofit organizations .You can purchase a maximum of two years of service credit for eachservice leave of absence .Sabbatical Leave of AbsenceA partially compensated leave of absence from CalPERS-coveredemployment . There is no limit to the amount of service credit youcan purchase .Serious Illness Leave of AbsenceEmployer-approved leave of absence due to an employee’s ownserious illness or injury . There is no limit to the amount of servicecredit you can purchase .Maternity/PaternityYou may be eligible to purchase Maternity/Paternity Leave of Absence service credit if You returned to CalPERS-covered employmentat the end of your approved leave of absenceperiod, and After you returned to employment from yourleave of absence, you remained in CalPERScovered employment for at least the sameamount of time you were on your leave ofabsence . 7EducationalYou may be eligible to purchase EducationalLeave of Absence service credit if You were employed with the State of Californiaor the California State University at the timeyou took your leave of absence .

Present Value Cost Method Types (continued) Peace Corps, AmeriCorps VISTA,or AmeriCorpsServiceYou may be eligible to purchase Service Leaveof Absence service credit if You returned to employment with the sameemployer that approved the service leaveof absence, and You are able to verify the leave was takenfor the purpose of service with a qualifyingnon-profit agency, university, or local, state,or federal agency .You may be eligible to request service credit forup to three years of service in the Peace Corps,AmeriCorps VISTA (Volunteers in Service toAmerica), or AmeriCorps . If eligible, you mustpurchase all available service credit .You may be eligible to purchase Peace Corps,AmeriCorps VISTA, or AmeriCorps servicecredit if SabbaticalYou may be eligible to purchase SabbaticalLeave of Absence service credit if You were partially compensated during yourleave of absence, and You returned to CalPERS-covered employmentat the end of your leave of absence . You cannot purchase Peace Corps, AmeriCorpsVISTA, or AmeriCorps service credit if Serious IllnessYou may be eligible to purchase Serious IllnessLeave of Absence service credit if Your employer certifies that you wereapproved for a leave because of your ownserious illness or injury, and You returned to active employment witha CalPERS-covered employer at the endof your leave of absence . You cannot purchase any leave of absence servicecredit if You are able to provide documentationcertifying your dates of service .The leave was not approved by your employer,and/orYour leave of absence cannot be certified, and/orYou have not returned from the leave of absenceyou are requesting service credit for .8You do not have verification of your datesof service, and/orYour public agency employer does not includethis option in their CalPERS contract .

Present Value Cost Method Types (continued)How Is the Present Value CostCalculated?Based on when you submit your service creditrequest, the cost may fluctuate because updatesto the actuarial tables used in this process occuras needed . Updates to the actuarial tables mayoccur due to existing benefit changes, new benefitsmandated by California law, or changes inassumptions to reflect our current best estimateof future outcomes based on the most recentexperience study . Actuarial assumptions areupdated periodically .CalPERS calculates the cost to purchase ARP,CETA, Fellowship, Leave of Absence, Peace Corps,AmeriCorps VISTA, and AmeriCorps service creditusing the “present value” cost method . The presentvalue cost method is used to determine the increaseto your future retirement benefits . This method isbased on your highest monthly full-time pay rateand an average of any of your special compensation(uniform allowance, holiday pay, longevity pay, etc .)your employer reports to CalPERS .FellowshipThe cost of purchasing your Fellowship servicecredit depends on the dates of your service and theprogram in which you participated . The followingexclusions apply: Participants in the Assembly, Senate, andExecutive Fellowship Programs have been excludedfrom CalPERS membership since October 14, 1991 . Participants in the Judicial AdministrationFellowship Program have been excluded fromCalPERS membership since January 1, 2003 .Determining the increase to your future benefitsalso involves a number of actuarial assumptions,including projected age at retirement, lifeexpectancy, salary inflation, and the assumedrate of return on investments . These assumptionsare the same assumptions we use to ensure thatall our benefits are adequately funded . Actuarialassumptions are made by our chief actuary andapproved by the CalPERS Board of Administration .If you rendered your Fellowship service beforethe applicable exclusion, we will use the pay andcontribution rate cost method (refer to page 10) .If you establish reciprocity with another retirementsystem, your highest monthly full-time pay ratewith that reciprocal system can be used in thepresent value cost.If you rendered your Fellowship service after theapplicable exclusions, we will use the present valuecost method (see page 5) .The present value cost method can be veryexpensive, and your election to purchaseservice credit is irrevocable .The earlier in your career that you elect topurchase service credit, the less expensivethe cost will be . Once we process yourelection to purchase service credit, anyfuture changes to the assumptions or toyour employment will not affect the costof your service credit purchase .9

Pay and Contribution Rate Cost Method TypesBase Realignment and Closure (BRAC)FirefighterThe following types of service credit purchaseare calculated using the pay and contributionrate cost method:Base Realignment and Closure (BRAC) Firefighterservice credit pertains to permanent career civilianfederal firefighters or permanent career statefirefighters who had their services terminated ata California federal military installation . You mustbe able to provide CalPERS with documentationcertifying your dates worked at a California federalmilitary installation that was closed due to BRAC .If eligible, you must purchase all available BRACservice credit . There is no limit to the amount ofBRAC service credit you can purchase . Base Realignment and Closure (BRAC) FirefighterLayoffOptional Member ServicePrior ServiceService Prior to Membership (SPM)Temporary Disability Leave of Absence(TDA)You are not eligible to request these service credittypes if any of the following apply: You are retired . The service you are requesting has been creditedin any other public retirement system . The service you are requesting cannot be certified .(Based on the service credit type and youremployer category, the service must be certified byyour employer, CalPERS, or a third-party entity .) You do not meet the eligibility criteria as explainedin this publication .You may be eligible to purchase BRACservice credit if You were a permanent career civilian federalfirefighter or permanent career state firefighterin a position whose principal duties consisted ofactive fire suppression or law enforcement, andYour service was terminated as a directconsequence of the closure, downsizing,or realignment of a California federal militaryinstitution, andYou are currently an active firefighter witha CalPERS-covered public agency .You cannot purchase BRAC service credit if 10You work for a CalPERS-covered employer thatdoes not provide the BRAC service credit typeoption, orYour service was not terminated due to BRAC, orYou are vested in the Federal EmployeesRetirement System (FERS) or the Civil ServiceRetirement System (CSRS), orYour BRAC service was prior to your current publicagency’s contract date with CalPERS .

Pay and Contribution Rate Cost Method Types (continued)LayoffOptional Member ServiceLayoff service credit is for time spent away fromwork because of a formal layoff action . You canpurchase a maximum of one year for eachlayoff period .Optional Member service credit is for time spentworking in certain exempt, appointed, or electedpositions that allow employees the option of joiningCalPERS . There is no limit to the amount of OptionalMember service credit you can purchase .You may be eligible to purchase Layoff servicecredit if You may be eligible to purchase Optional Memberservice credit if You were laid off from a CalPERS-coveredemployer that has contracted to provide thisoption, andYou were a full-time employee prior to beinglaid off, andThe layoff period is on or after January 1, 1981, andYou returned to full-time, CalPERS-coveredemployment with the layoff employer within12 months of being laid off, andYou are currently active with the layoff employer,andYou redeposit any contributions you withdrewduring the layoff, plus interest . You cannot purchase Optional Member servicecredit if You cannot purchase Layoff service credit if The employer where the service was earned doesnot currently have a retirement contract withCalPERS, orYour service is excluded by California law or byyour employer’s retirement contract with CalPERS .If you are not an optional member on the dateyour request is received, you may still be eligibleto purchase your Optional Member service asService Prior to Membership . Submit your requestto CalPERS for review .You must elect to purchase this service withinthree years of returning to work or within threeyears of the effective date your employer addsthis option to their contract . You are an optional member on the date CalPERSreceives your request for cost information .You were employed with the State of California,the California State University, or a county schoolor school district at the time of your layoff, orYour public agency employer did not contractfor this option .11

Pay and Contribution Rate Cost Method Types (continued)Prior ServiceYou cannot purchase SPM service credit if Prior Service is time worked for an employer beforethey contracted with CalPERS . A contracting agencymay provide this service or a percentage of this serviceat no member cost . There is no limit to the amountof service credit that can be credited or purchased . You may be eligible to purchase Prior Service if You worked for a CalPERS-covered employer thathas contracted to provide this option . Limitations or restrictions vary by agency(i .e ., some agencies can require you be employedon the effective date of the contract) . Check withyour personnel office .Purchase service credit early in your careerto ensure your employer has your payrollrecords available . Many employers purgetheir records after seven years . The cost topurchase service credit will also be lowerthe earlier you make an election .You cannot purchase Prior Service if Your agency did not contract for this option .Service Prior to Membership (SPM)Employment with a CalPERS-covered employer beforebecoming a CalPERS member may be creditable bypurchase after you become a CalPERS member .Service Prior to Membership (SPM) credit may beavailable for employment that did not qualify formembership, usually because of a limited time baseor term of employment . If eligible, you must purchaseall available SPM service credit . There is no limit tothe amount of SPM service credit you can purchase .Employer CertificationLayoff, Optional Member Service, Prior Service,and Service Prior to Membership requests needto be certified by an authorized payroll, personnel,or human resources employer representative .If your employer is unable to complete any requiredcertification, you will not be eligible to purchasethe service credit period . We do not accept W-2sor Social Security statements in lieu of completionof the employer certification . You may submitthese documents to the employer as tools forcompleting the certification, but it is up to theirdiscretion to use the documentation to substantiatethe requested information .You may be eligible to purchase SPM servicecredit if The employer where the service was earned doesnot currently have a contract with CalPERS, orYour service is excluded by California law or bythe employer’s contract with CalPERS, orYou worked at a school in a certificated position(contact the California State Teachers’ RetirementSystem to find out if you can purchase service withthat system), orYou worked at the University of California afterOctober 1, 1963 (contact the University ofCalifornia Retirement System to find out if youcan purchase service with that system) .You worked for a CalPERS-covered employer asa seasonal, temporary, part-time, or intermittentemployee, but were not a CalPERS member .The CalPERS-covered employer is able to certifyyour dates of service, hours worked, and earningsinformation electronically in the myCalPERS system .12

Pay and Contribution Rate Cost Method Types (continued)Temporary Disability Leave of Absence(TDA)How Is the Pay and Contribution RateCost Calculated?A Temporary Disability Leave of Absence (TDA)is time off while receiving temporary disabilitypayments because of a job-related injury or illness .If eligible, you must purchase all available TDAservice credit per leave of absence period . Thereis no limit to the amount of service credit youcan purchase .The cost to purchase Service Prior to Membership,Temporary Disability Leave of Absence, Layoff, andOptional Member service is based on your pay rateand contribution rate on a specified date . For TDAand Layoff, the specified date is the date you returnto work .* For all others, the specified date is the dayyou became a CalPERS member (after you renderedthe service) . Interest will be calculated through thedate provided on the election document .You may be eligible to purchase TDA servicecredit if Prior ServiceThis benefit depends on the specific terms of youremployer’s contract with CalPERS . Depending onthe contract, you could be: Credited at no member cost with all the servicecredit you would have earned . Credited at no member cost with some of theservice credit you would have earned and giventhe option to purchase the rest . Given the option to purchase the service credityou would have earned .You received workers’ compensation paymentsdue to a job-related injury or illness, andYou returned to CalPERS-covered employment orimmediately retired after your leave of absence .If you plan to retire after your Temporary DisabilityLeave of Absence, CalPERS must receive yourelection to purchase this service credit in advanceof your retirement date . To ensure you have enoughtime to elect, contact CalPERS if you are on aTemporary Disability Leave of Absence and areplanning to retire .If you are given the option to purchase the servicecredit, the cost is calculated as described above,based on the specified date of when you becamea member .You cannot purchase Temporary Disabilityservice credit if You received State Disability Insurance (SDI),Non-Industrial Disability Insurance (NDI), orIndustrial Disability Leave (IDL) insurance duringyour leave of absence period, orYou did not receive workers’ compensationpayments due to a job-related injury or illness, orThe workers’ compensation carrier cannot certifythe dates of your leave of absence period, orYou are currently on the leave you request topurchase service credit for .* If you retire while you are on Temporary Disability Leave ofAbsence, the specified date is the day prior to your leave ofabsence start date .13

Redeposit Cost Method TypesCommunity Property RedepositThe following types of service creditpurchase are calculated using the redepositcost method: You may be eligible to redeposit your withdrawncontributions if Community Property RedepositLocal System RedepositReciprocal RedepositRedeposit of Withdrawn Contributions If you withdrew contributions for one or moremembership periods in one withdrawal, you mustredeposit in one redeposit election . If you madeseparate withdrawals of your contributions for one ormore membership periods, you can redeposit in oneredeposit election or in separate redeposit elections .If you choose to make separate redeposit elections,you must begin with the most recent withdrawaland end with the oldest .Local System RedepositA Local System Redeposit is the repayment of servicerendered at an employer under a local retirementsystem prior to the agency contracting with CalPERS .You may be eligible to redeposit your local systemwithdrawn contributions if You are not eligible to request these service credittypes if any of the following apply: Your former spouse or former registered domesticpartner was awarded a portion of your accountas part of a community property judgment orsettlement, andYour former spouse or former registereddomestic partner has received a refund ofthe awarded contributions . You are not currently an active or inactive CalPERSmember or a member of a reciprocal retirementsystem (for Reciprocal Redeposit only) .You are retired .The service you are requesting has been creditedin any other public retirement system .You do not meet the eligibility criteria as explainedin this publication . You are a former member of a local retirementsystem who withdrew contributions prior to theeffective date of that agency’s contract date withCalPERS, orYou are a former member of a local retirementsystem before the date a contract exclusion wasremoved from the CalPERS contract .Reciprocal RedepositYou may be eligible to redeposit your withdrawncontributions if You are a member of a reciprocal or non-reciprocalCalifornia public retirement system’s definedbenefit plan (see list of reciprocal systems below) .If you are a member of a reciprocal retirementsystem, you must make the election to redepositwithdrawn contributions prior to your retirementdate with both systems .14

Redeposit Cost Method Types (continued)Members of the following California public retirementsystems’ defined benefit plans may be eligible toredeposit funds they withdrew from CalPERS:For information about reciprocity, seeWhen You Change Retirement Systems(PUB 16) .Non-Reciprocal Retirement Systems California State Teachers’ Retirement System Judges’ Retirement System Judges’ Retirement System II Legislators’ Retirement System University of California Retirement SystemRedeposit of Withdrawn ContributionsIf you were previously a CalPERS member, left yourCalPERS-covered employment, and took a refund ofyour contributions and interest, you may be eligibleto redeposit these funds and restore those years ofservice credit .Reciprocal Public Agency Retirement Systems City of Concord Contra Costa Water District City of Costa Mesa (safety only) East Bay Municipal Utility District East Bay Regional Park District (safety only) City of Fresno City of Los Angeles Los Angeles County Metropolitan TransportationAuthority (Non-Contract Employees’ RetirementIncome Plan) City of Oakland (non-safety only) City of Pasadena Fire and Police RetirementSystem City of Sacramento City of San Clemente (non-safety only) City of San Diego City and County of San Francisco City of San Jose San Luis Obispo CountyYou may be eligible to redeposit your withdrawncontributions if You cannot redeposit withdrawn contributions if Your service was with another public retirementsystem, not CalPERS (contact that system to findout whether you can purchase service credit withthem), or The agency you previously worked for does notcurrently contract with CalPERS . How Is the Redeposit Cost Calculated?CalPERS calculates the amount of the refundplus interest through the date provided on theelection document .Reciprocal 1937 Act County Retirement Systems AlamedaContra CostaFresnoImperialKernLos

Alternate Retirement Program (ARP) If you were a new, rst-time state miscellaneous or industrial employee hired with the State of California from August 11, 2004, through June 30, 2013, you were automatically enrolled in ARP (administered by the California Department of Human Resources Savings