Purchases are grouped by those with deadlines, those that can be made anytime prior to retirement and those that can be made at retirement. Please see the details for any type of purchase that may be of interest as the rules for the various types differ.
Purchases that have deadlines
Fractional Service/Part Time
Purchase Deadline: Dec. 31 following the fiscal year when the fractional service occurred
Details: If you are employed on a regular full-time, part-time or substitute basis and work less than the contract year, you will earn less than a full year of service credit. If your employment continues for 70 percent or more of the regular contract year, you may be eligible to purchase additional service credit which will provide you with a full year of service credit. Your employer must submit a Lost Services Certification.
If you are employed on a regular full-time basis and work less than 70 percent of the regular contract year, you may have the opportunity to purchase additional service credit under certain conditions. Please contact TRS for specific information concerning service credit purchases for members who work the first half or more of the regular contract year and for members who are employed in the beginning of the year for at least one complete pay period. These purchases can only be exercised once in every three-year period or once in every 10-year period, respectively.
Current Leave of Absence
Purchase Deadline: June 30 of the following fiscal year
Details: If you are granted an official leave of absence in either the current fiscal year or the year directly preceding the current fiscal year, you may be eligible to purchase service credit for that leave. (Example of the deadline: If you have a leave of absence in the 2015-16 fiscal year, the deadline to purchase is June 30, 2017.) Employer must submit a Leave of Absence Certification and board minutes showing approval of the leave.
Optional Retirement Plan (University only)
Purchase Deadline: Within the first six and one-half years of continuous employment with the university
Details: If you are employed in a participating university you may be eligible to purchase service credit for previous prior service with the university. The employer must complete an Application to Purchase TRS Service Credit for Employment under the Optional Retirement Plan in Universities Participating in TRS.
Purchases that may be made anytime prior to retirement
Members interested in purchasing additional credit for non-current leaves of absence, military service or reinstatement of a withdrawn account may contact TRS anytime during their career in a TRS-covered position. Purchases are preferred at least 90 days prior to retirement date.
Non-Current Leave of Absence
You may be eligible to purchase service credit for a non-current leave of absence when the leave was granted for health reasons, maternity or child rearing, or to improve your educational qualifications. The leave must be certified to TRS by supplying a copy of the board minutes that granted the leave of absence. You may not purchase more than two years of non-current leave service.
For members with an entry date prior to July 1, 2008: You are required to pay both the member contributions and the employer contributions, plus any accrued interest at the rate of 8 percent per year.
For members with an entry date on or after July 1, 2008: The non-current leave of absence is calculated as full actuarial cost and may be purchased at the time of retirement.
Military Service After Becoming a TRS Member
You may receive service credit for military service that occurs after you become a member of TRS if you give your employer advance written or verbal notice of performing military service and you return directly to covered employment on or after July 12, 2006, following the military service. Contributions are based upon the salary you would have earned during the period of your absence for military service plus interest at 8 percent per annum.
If you are drawing or eligible to draw retirement benefits for 20 or more years of active duty military service, you are not eligible to purchase military service credit. No credit shall be granted for service that is being used to qualify for annuity benefits from another retirement system financed wholly or in part with public funds.
For members only who are local school district employees, the Commonwealth of Kentucky pays the member contribution for all certified staff who are members of a state National Guard or Reserve component ordered to active military duty by the President of the United States. In order to qualify, members must timely return, or have timely returned, to employment in their districts on or after Jan. 1, 2003, upon release from active duty.
This stems from the Uniformed Services Employment and Re-employment Rights Act (USERRA) that provides federal guidelines for continued participation in TRS while you are on active duty. TRS can provide you with only very limited, general information regarding USERRA as this is a federal law subject to federal amendment and interpretation. Therefore, you should always contact the federal authorities charged with the administration of USERRA if you have any questions regarding its application to your individual circumstances. The National Committee for Employer Support of the Guard and Reserves maintains a USERRA website at www.esgr.org. You also may contact the committee using its toll-free number, 800-336-4590 and ask for Ombudsman Services.
You may reinstate previously withdrawn TRS service if you return to active contributing status and have contributing service of at least 1.00 full year. This cost includes the amount refunded plus 8 percent interest compounded annually from the date of withdrawal to the date of repayment.
Purchases that may be made at the time of retirement
Full Actuarial Cost Purchases
The methodology for calculating the full actuarial cost of service credit purchases is subject to periodic review by the retirement system’s actuary and may be adjusted if necessary to ensure that the full actuarial cost is charged.
The actual cost of the service credit purchase is calculated at the time of retirement and is based on the member’s age and average salary at the time of retirement as well as the amount of TRS benefit increase received due to the purchase of the service credit.
A TRS Counselor can provide you with an estimate of the cost as part of the TRS Retirement Benefit Estimate Calculation. The following purchases are calculated on a full actuarial cost. All full actuarial purchases are subject to a final reconciliation and correction at the time of retirement.
Prior Military and Public Health Service
If you are in active contributing status, you may purchase up to six years of active military service or service in the commissioned corps of the Public Health Services if you were in the military or Public Health Service prior to your employment in a position covered by TRS. Service may be credited only if the discharge was honorable. To obtain a statement of cost and service credit, send TRS an official copy of your Form DD 214 or other official military records establishing your dates of entry and release from active duty. Prior military service is considered Kentucky teaching service, but does not count toward vesting your account. If you are drawing or eligible to draw retirement benefits for 20 or more years of active duty military service, you are not eligible to purchase military service credit. No credit shall be granted for service that is being used to qualify for annuity benefits from another retirement system financed wholly or in part with public funds.
National Guard and the Military Reserves
If you are an active contributing member of TRS, you may purchase one month of retirement service credit for each six months of service in the military reserves or the National Guard. This service cannot be used in meeting the service requirements for either regular service retirement or disability retirement. If you are drawing or eligible to draw retirement benefits for 20 or more years of active duty military service, you are not eligible to purchase National Guard or military reserve service as service credit. No credit shall be granted for service that is being used to qualify for annuity benefits from another retirement system financed wholly or in part with public funds.
If you are an active contributing member of TRS with at least one year of TRS service subsequent to the latest out-of-state service and you contributed to TRS prior to July 1, 1976, you are eligible to purchase retirement service credit for up to 10 years of certifiable out-of-state service performed in a public school or U. S. Government Dependency School. If you entered TRS on or after July 1, 1976, you may purchase one year of out-of-state service credit for every two years of Kentucky service completed. Members who joined the System on or after July 1, 1976, and have completed 10 years of Kentucky service, may purchase credit for up to 10 years of acceptable out-of-state service. Only full-time out-of-state service is purchasable. Part-time and substitute service are not. Credit will not be granted for service that is being or will be used in qualifying for annuity benefits from another state. You may purchase retirement credit for out-of-state teaching service rendered under contract in public schools in another state. Service performed at the University of Kentucky, University of Louisville or Northern Kentucky University also are treated like out-of-state service. Out-of-state credit counts the same as Kentucky service when calculating your retirement benefit, but it does not count toward the five years of Kentucky service required for vesting. However, for members who purchased out-of-state service prior to July 1, 2005, an additional charge must be paid to use this service to qualify for retirement based only on achieving 27 years of service since out-of-state service purchased prior to July 1, 2005, was not based upon the current full actuarial cost formula. This additional charge is computed by multiplying 8 percent times your final average salary at retirement for each year of out-of-state service that is qualified. Members age 60 or older are not required to pay the additional charge, unless out of state service is used to qualify for the three-year final average salary formula. In this case, members are required to make the qualifying payment at retirement.
If you wish to obtain retirement credit for out-of-state service, you must have your former employer certify your service to TRS on forms prescribed by TRS. Upon receipt of the certification, TRS will notify you concerning the amount of service you may purchase and the cost.
Peace Corps Service Credit
If you have completed service as a federal Peace Corps volunteer you may be eligible to purchase up to two years of qualifying service credit. To obtain a statement of your cost and purchasable credit, send TRS a certified copy of your Certification of Peace Corps Volunteer Service. No credit shall be granted for service that is being used to qualify for annuity benefits from another retirement system financed wholly or in part with public funds.
Non-Qualified Service Credit
For members with an entry date prior to July 1, 2008: If you are an active contributing member who has a minimum of 20 years of service credit, you may purchase up to five years of non-qualified service credit.
For members with an entry date on or after July 1, 2008: If you are an active contributing member employed by the local school district, you may purchase up to 10 months of non-qualified service credit if you are retiring and have completed the prior school year with at least 26 years and two months of service but less than 27 years of service.
Federal Head Start Service
If you are an active contributing member of TRS who was formerly employed by a federal Head Start Agency and did not participate in a state-administered retirement system, you may obtain TRS service credit for the period of the Head Start service.
Regional Community Mental Health and Mental Retardation Service Program
If you are an active contributing member of TRS who was formerly employed by a Regional Community Mental Health and Mental Retardation Service Program and did not participate in a state-administered retirement system, you may obtain credit for the period of the Regional Community Mental Health and Mental Retardation service.