Purchasing and Redepositing Service Credit
Purchasing Service Credit
In general, the more service credit you have as an ACERA member, the higher your retirement benefit. ACERA may also use service credit to determine when you can retire and receive a benefit. Thus, by purchasing service credit, you can increase your retirement benefit and, in some cases, become eligible to retire at an earlier date.
There are specific periods of employment that may be purchased as service credit:
- Time worked prior to your ACERA entry date. Your ACERA member entry date is the typically first day of the second pay period of employment in an ACERA-covered position. You may purchase the days worked prior to your ACERA entry date, and add these days to your service credit. However, this purchase of service does not change your entry date.
- Part-time or other retirement-ineligible service. If you are employed in a retirement-ineligible position by a participating employer, you may be eligible to purchase this service if you become eligible for ACERA membership at some point in the future. (You may not purchase service credit for time worked as an independent contractor or for an outside temporary agency or employment agency.) Here are types of time that fall into this category:
- Part-Time Work (that you didn’t already earn service credit for)
- TAP (Temporary Assignment Pool) Work
- Seasonal, Intermittent, Service-As-Needed, Project, Per Diem Work
- Unpaid medical leave. If you were on leave for a medical reason, and you were not receiving pay from your employer, that means you were not earning service credit. (This includes time that is considered FMLA—Family Medical Leave Act which is the federal law that allows you to be away from work for up to 12 weeks in a year for certain medical reasons, even if you’re out of earned leave time.) You can buy that time back once you return from that leave for periods of up to one year per instance, with a doctor’s certification. This is only for your medical conditions, not when you’re on leave caring for family members. You must provide documentation—see section below.
- State disability insurance leave time. If you were receiving partial pay from the state’s disability insurance system, and partial pay from your employer, you didn’t earn service credit for the state disability insurance time. You can purchase any service credit you didn’t earn from this time once you return from that leave. You must provide documentation—see section below.
- Military leave during membership. If you go out on military leave during your active membership, you can purchase that time when you return from that leave. (Military time prior to membership isn’t purchasable, unless it was prior to 1972.)
- Redeposit of prior membership contributions (further explained in section below)
- Other prior public service (further explained in section below
In effect, the additional service credit you purchase would increase your retirement benefit allowance when you retire. In addition, this purchased service would count toward determining your retirement eligibility date and toward becoming vested in the retirement plan. If applicable, it would also count towards 30-year membership.
How to Request to Purchase Service Credit
To determine whether your prior participating employer service is available for purchase, you can submit your request via Web Member Services or in writing to ACERA using the ACERA Purchase/Redeposit Request Form.
In a written response to your request, ACERA will inform you if you are eligible to purchase service credit and, if so, provide the cost to purchase the service.
Redeposit of Prior Membership Contributions
If you terminate membership with ACERA, withdraw your accumulated contributions and interest, then become an ACERA member again at a later date, you may redeposit the withdrawn funds plus interest that would have accrued up to the redeposit payment date. ALL previous service credit must be purchased; partial purchases of service credit are not allowed. A decision to forego redeposit means your prior service credit does not count towards establishing your eligibility for retirement.
In effect, a redeposit of your contributions restores your past service credit earned. This will increase your retirement benefit allowance when you retire. In addition, this purchased service will count toward determining your retirement eligibility date and toward becoming vested in the retirement plan and 30-year membership, if applicable.
Initiating a redeposit is the same process as purchasing service described as above.
In a written response to your request, ACERA will inform you if you are eligible to redeposit withdrawn contributions and, if so, provide the cost for doing so.
Other Prior Public Service
If you worked for another public agency prior to becoming an ACERA member, you may be eligible to purchase that service. Some of the types of other agency or public service you may be eligible to purchase are listed below:
- County employment within the State of California
- Any public employer covered by a retirement plan under Public Employees’ Retirement System (PERS) (State of California) or reciprocal with PERS
- East Bay Municipal Utility District (EBMUD)
- Port of Oakland
- State of California
- Any public school district in Alameda County
- Federal government service or military service for employees hired on or before August 9, 1972
Purchasing previous public employer service credit would increase your retirement benefit allowance but would NOT count toward determining your retirement eligibility date or becoming vested in the retirement plan. However, it would count towards 30-year membership eligibility.
For purchase of prior public service, verification of the dates worked is required. In addition, you cannot be eligible for a pension from the other agency and the service must have been earned before your ACERA entry date. Usually this means you either didn’t work for the other public employer for very long, or you took a refund of your contributions to that employer’s pension system, making you ineligible to collect a pension from that system.
The cost of purchasing prior public service includes employee and employer contributions based on the contribution rates and salary at your ACERA entry date. Interest is also charged from your ACERA entry date to the date of purchase.
You can obtain a retirement estimate, account balance, or current service credit total from Web Member Services.
Service Purchase and Redeposit Payment Methods
Members may purchase service credit or redeposit prior membership by using one or more of the following payment methods:
- Lump sum payment (post-tax) - You may make post-tax payment in full by paying with cash, a personal check, or a cashier’s check made payable to ACERA.
- Direct rollover or trustee-to-trustee transfer (pre-tax)
- Direct rollover - This is a transfer of pre-tax funds from a qualified retirement account, usually earned from your former employment. ACERA will accept a direct rollover of pre-tax funds from these types of plans: 401(k) tax qualified plan; 457 deferred compensation plan maintained by a California public agency; 403(b) tax-sheltered annuity plan; pre-tax IRA. If you are eligible to purchase service through ACERA, you can ask your former employer’s plan administrator to disburse the funds directly to ACERA for service purchase. The plan administrator will determine and must certify that the distribution qualifies for a direct rollover. The check should be made payable to “ACERA For the Benefit Of [your name]”.
- Trustee-to-Trustee Transfer - This is a transfer of pre-tax funds from a qualified retirement account, such as a 457 plan (deferred compensation plan), from your current employer to ACERA. When ready to purchase service, the funds may be disbursed from the plan administrator directly to ACERA for redeposit or service purchase. Any check from the plan administrator must be made payable to “ACERA For the Benefit Of [your name]”.
- Payroll deduction payments (post-tax) - You may purchase service credit using post-tax payroll deductions. The payments are divided equally over the term of the contract. The specific contract term may vary depending on the type of service purchased. The amount is in addition to your normal employee retirement plan contributions. All purchases must be completed before retirement. To set up a payment plan for a service purchase, you must sign a contract and submit it to ACERA. If you subsequently decide during your payment contract period that you wish to complete the contract by making a lump sum payment, please send ACERA a letter stating your request to make a lump sum payment.
To initiate a service purchase or redeposit request, visit Web Member Services and click on the Web Forms link or submit a Purchase Request Form or Redeposit Request Form to ACERA. Upon receipt and completion of your request, ACERA will calculate the required payment and provide information regarding payment options. Once you inform ACERA that you are interested in making this purchase and your choice of payment type (lump sum or payment plan), ACERA will issue a payment contract. Your service purchase or redeposit request itself is not an authorization to begin a redeposit or service credit purchase; you must return the signed contract in order for your redeposit/purchase payments to begin. For help with purchasing service credit or redeposits, contact us.
State Disability Insurance Leave Time
- State Disability Insurance approval (if applicable)
- FMLA approval (if applicable)
- Workers compensation approval (if applicable)
- Signed doctor’s authorization (if applicable)
Unpaid Medical Leave Time
- FMLA approval (if applicable)
- Child’s birth certificate (if you were away from work for the birth of your child)
- Signed doctor’s authorization (if applicable)
Mail Copies of Your Documents to ACERA:
Alameda County Employees’ Retirement Association
475 14th Street, Suite 1000
Oakland, California 94612-1916
Or QIC Code Documents to ACERA:
If you work for Alameda County or one of our employers that uses the QIC code system, feel free to send us documents via QIC.
Don’t Email Documents
Please refrain from emailing documents to ACERA as your personal documents contain personally identifying information and email is not the most secure way to transmit this information.