Earning and Purchasing Service Credit

Overview
Earning and Purchasing Service Credit

You Earn Service Credit While You Work

While you work in a full-time retirement-eligible position for one of ACERA’s participating employers, you earn service credit toward retirement.  Service credit is measured in years. In general, you earn a year of service credit for each year you work full-time in an ACERA-covered job. Your service credit earnings are measured to a fraction of week, so for example, if you earned 5 years and 8 weeks of service credit, you will have earned about 5.15 years of service credit.

If you work part time, you get part time service credit. For example, if you work half time for 10 years, you get 5 full-time years of service credit in the formula.

Purchased service will also increase your total service credit. In general, the more retirement service credit you have, the higher your benefit.

You Earn Service Credit During Earned Leave

When you take the following types of leave, you earn service credit while out on that leave:

  • Earned Vacation Leave
  • Sick Leave
  • Management Leave
  • Compensatory Time
  • Holidays
  • Floating Holidays

Times When You Don’t Earn Service Credit

  • Overtime, On-call, or Standby
  • Unpaid Leave - When you are out of the office on unpaid leave, you do not earn service credit during that time. If the unpaid leave is unpaid medical leave, that time can be purchasable (see section on purchasing service credit below).
  • Purchased Vacation - Some ACERA employers will allow you to purchase additional vacation beyond your earned vacation. During the time when you’re out on this purchased vacation leave, you do not earn service credit. And this time is not purchasable as service credit.
  • Sold Vacation - If you sell your earned vacation to your employer to get extra cash, you don’t get service credit for it. However, you may get salary credit for it. See Highest Average Monthly Salary for more information.

What If My Service Credit Amount Seems Incorrect?

If after reviewing your service credit amount in your personal account in Web Member Services you think your service credit time seems incorrect, you can request a service credit audit using the Retirement Benefit Estimate Request Form.

What Happens to My Unused Sick Leave?

Leaving Work Before Retirement

If you terminate your employment prior to retiring, you loose all of your accrued sick leave.

Working Until Retirement

If you go straight from active pay status into retirement (either working or on leave the day before your retirement date), ACERA will convert your unused sick leave into service credit, as allowed by your bargaining unit. For most members, upon retirement, 50% of any unused sick leave balance can be converted to service credit and added to total years of service. Limitations can be found in your Memorandum of Understanding (MOU) for your bargaining unit. Many MOUs limit the amount of sick leave that is convertible up to 125 days. Check with your Human Resources department for a copy of your MOU.

Converted sick leave does NOT count toward meeting retirement eligibility requirements.

To convert your unused sick leave to service credit, your retirement effective date must be the day after you terminate employment. Retirement-eligible members who terminate employment and choose not to apply for and begin retirement will not receive credit for unused sick leave. So if you spend even a single day in deferred status between active employment and retirement, ACERA will not be able to convert your sick leave to service credit.

For example: your MOU limits the amount of sick leave that is convertible to service credit up to 125 days of sick leave. You have 130 days of sick leave left on the books when you retire. If you go straight from active work into retirement, you may be eligible to receive half of 125 days as service credit, so you will receive 62.5 days of service credit. The remaining five days above 125 days that you had left on the books you do not get credit for.

Limits for Alameda Health System (AHS) members are little different: AHS members receive PTO rather than sick leave. Unused PTO does not count toward service credit (but can count toward highest average salary). AHS members also receive Extended Sick Leave and some members may still have some unused Intermittent Sick Leave (this leave was phased out in 2014). For AHS members who go straight from active work into retirement, ACERA will add together the remaining Extended Sick Leave plus remaining Intermittent Sick Leave (if any), and the member will receive half the total as service credit, up to a limit. Limitations can be found in your Memorandum of Understanding (MOU) for your bargaining unit. Many MOUs limit the amount of sick leave that is convertible to 125 days (which would result in a maximum of 62.5 days of service credit). Check with your Human Resources department for a copy of your MOU.

What Happens to My Unused Comp Time, Management Leave, and Floating Holidays?

Compensatory time (comp time), management leave, and floating holidays are “use-it-or-loose-it”. Any remaining amounts of these leave times on the books at retirement do not count toward service credit and you do not get compensation for them, so you should use them prior to leaving your job and/or retiring, especially since you get service credit for using them.

Unused Vacation Leave

Unused vacation leave will not count toward service credit, but you will receive compensation for an amounts of up to 2-times your annual accrual rate or vacation, plus it may increase your Highest Average Monthly Salary.