When planning for your retirement, you have the option to purchase service credit so that you may be able to do one or more of the following: receive a higher benefit amount, retire earlier, receive a larger health care subsidy in retirement if they enroll in the PERACare Health Benefits Program.
How is service credit calculated?
In most cases, you receive a month of service credit for each month of employment when your earned salary is greater than or equal to 80 times the federal minimum wage hourly rate in effect at the time of service. For salary that is less than this amount, service credit is prorated. Currently, the federal minimum wage rate is $7.25 per hour. Any member whose salary is at least $580 ($7.25 × 80) during the month would generally receive one month of service credit. You cannot earn more than 12 months of service credit in a 12-month period. Service credit for members of the Denver Public Schools (DPS) benefit structure was calculated differently prior to January 1, 2010.
Who is eligible to purchase service credit?
If your PERA membership began before January 1, 1999, you must have one year of earned service credit.
If your PERA membership began on or after January 1, 1999, you must have one year of earned service credit to purchase qualified employment and five years of earned service credit to purchase nonqualified employment.
We have online calculators that will help you estimate the cost to purchase service credit (log-in required)
I previously refunded my account. Can I get that service credit back?
Yes, you can purchase service credit based on your refunded account. The eligibility and cost to purchase is dependent on the benefit structure of the refunded account and your current benefit structure (PERA or DPS benefit structure). Please review the Purchasing Service Credit booklet for more information.
Can I add to my service credit for other work experience?
Yes, but there are different requirements to be eligible to purchase, different costs depending on your age, limits on the amount of time that can be purchased, and other requirements related to the purchase. You can learn more about the requirements in the Purchasing Service Credit booklet.
What is the difference between qualified and nonqualified employment?
Qualified employmentis defined by federal law as any U.S. employment where the employer is set up under federal, state, or local government, as well as public and private K-12 school employment, and employment with public employee organizations. Nonqualified employment is all employment which does not fit into qualified employment.
How is service credit calculated differently for School and DPS Division employees?
Usually, a PERA member receives one month of service credit for one month worked. But for members of the School and DPS Divisions, who may routinely work 8, 9, 10, or 11 months out of a year, the service credit is weighted in each month so that the member earns 12 months total during that August through July period.
In many cases, service credit for members in the School and DPS Divisions is applied at the maximum amount of 1.500 months per salary posting, but will gradually lower once more than 8 months are worked in that 12-month period (see chart on page 2). This is done to maximize the accrual of service credit. For more information, please view the School and DPS Divisions Service Credit fact sheet.
How many years of service credit will I need to qualify for a monthly benefit?
The amount of service credit needed to qualify for a monthly benefit depends on when you began your membership and which benefit structure you retire under, either PERA or Denver Public Schools (DPS). The service requirement for retirement eligibility varies with age. See the Retirement Eligibility fact sheet for more details.
