What is Service Credit?
Service credit is the total number of years you have worked in TRS-covered positions. Service credit is used in calculating your retirement benefit, therefore, the more service credit you have at the time of retirement, the greater your retirement annuity. You can never have more than one year of service credit for a fiscal year (July 1 – June 30).
Active contributing members can purchase additional service credit to add to their retirement annuites. The various types of service credit purchases are summarized below, but details are available on the Purchasing Service Credit page. Some purchases have very strict deadlines, some can be purchased any time during your TRS career, and others are purchasable at the time of retirement. Some are handled differently depending on, for example, whether military service occurred before or during TRS-covered employment.
Service credit may be purchased by making a lump sum payment to the retirement system by personal or cashier’s check or, as permitted under the Internal Revenue Code, by rolling over or transferring funds from another qualified plan. Certain types of service credit purchases may be made by making monthly installment payments of principal and interest through payroll deduction or by bank draft.
Members are encouraged to put their account in order prior to filing a retirement application. You will not be permitted to purchase service credit of any kind for your account after the effective date of your retirement. TRS must receive payments made by the member or the employer in time to process the retirement application. Approval of your retirement application will be delayed until all payments have been received.
Service that has been or will be used in qualifying for an annuity with another retirement system that is financed in whole or part by public funds cannot be purchased as service credit with TRS.
Categories of service credit that may be purchased include:
• Fractional service/balance of the year;
• Current and non-current leaves of absence;
• Optional Retirement Plan (university only);
• Active military service;
• Reinstatement of previously withdrawn TRS service;
• National Guard;
• Out-of-state teaching service;
• Peace Corps service;
• Non-qualified service;
• Federal Head Start service; or
• Regional community mental health and mental retardation service
Again, detailed purchase information may be found at “Purchasing Service Credit.“