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Purchase and Redeposit of Service Credit
Service credit is one of the three factors used in computing a retirement allowance. Current law permits members to receive additional service credit only under specific authorized circumstances. You may be eligible to add service credit to your account if you had prior public service, or had withdrawn contributions, by purchasing or redepositing service credit. Purchases and redeposits are governed by different government code sections. There is no provision to purchase credit which is not authorized in the law (for example, to just buy credit because additional credit is needed or desired.) Service purchases and redeposits must be completed prior to your effective date of retirement.
Service credit that can be purchased and or redeposited include:
Redeposits of prior withdrawn contributionsA redeposit is a payment of contributions plus interest for any previous ACERA retirement service time. For example, if you left ACERA covered employment in the past and withdrew your retirement contributions plus related interest, you have no retirement service credit for that period of service. You can restore this service credit in full if you redeposit (pay back) these withdrawn contributions, with interest. Your rate of contribution will be based on your age nearest to your date of re-entry into ACERA. To request a redeposit calculation submit a Redeposit request form (click HERE to download form) to ACERA. All requests must be done in writing.
Tier Changes under Marin Decision.Under Aquilino vs. Marin County Employees' Retirement Association (MCERA) (1998) 60 Cal. App 4 1509, eligible Tier II members who redeposit withdrawn Tier I contributions and apply for Aquilino Tier I restoration may have their former Tier I benefits restored.
Certain Tier II members who qualify under the Marin decision may have their Tier I status reinstated. This decision only affects ACERA Tier II members who were in Tier I, at one point but then terminated their membership, withdrew all of their Tier I contributions, and later re-entered the retirement system after July 1, 1983 as a Tier II member. In order to have Tier I benefits reinstated, eligible members must:
Aquilino Tier I Restoration Applications are available (click HERE) or for more information on the Aquilino, contact ACERA.
Service PurchasesA purchase of service credit is different from a redeposit in that you purchase service time that you have never had. Interest is included in your cost of service purchases. This interest is what your money would have earned, if it had been in the trust during the time being purchased. The interest charged is credited to your individual account so you are paying interest to yourself. This interest remains in your account and earns additional interest for you, until you either withdraw or retire
Purchasable service credit includes credit for a prior period of County service which was ineligible for membership such as:
Additionally, if you previously worked for a public agency where there was no pension plan or had withdrawn retirement service credit for time worked with a public agency, you may be eligible to purchase that service time. You must be ineligible for a retirement benefit from any of these agencies except military reserve, to purchase this type of service credit (known as prior/other public service).
Please note that purchases of prior/other public service may not be used to meet the minimum qualifications for regular service retirement, or for service and non-service connected disability. The cost for purchasing prior/other public service is often very expensive as it includes both employer and employee contributions and interest.
Redeposit and Service Purchase Payment OptionsThe redeposit or purchase of additional service credit payment may be done in a variety of ways:
All purchases, or redeposits must be completed prior to filing for retirement. Redeposits and purchase payments through payroll deductions are on a tax-deferred basis, lump sum payments are taken on a post-tax basis. For certain types of service credit purchases, and for redeposits, no service is credited unless the payment is completed in full.
Contributions received for redeposit and service purchase contract payments are in addition to your normal biweekly retirement contribution deductions.
Requesting Redeposits and/or Purchase CalculationsIf you would like to have a service purchase or redeposit calculation, you must submit the proper request form to ACERA. Redeposit and/or Purchase request forms (click HERE) are available from this site or you may contact ACERA. Upon receipt and completion of your calculation, you will receive a payment contract in the mail. A request for a calculation is not an authorization to begin a redeposit/purchase. You must return the contract in order for the redeposit/purchase to begin. Payroll deductions for redeposits and service purchase contracts are in addition to your regular biweekly retirement contributions.