Full-cost purchase
PERS members who qualify can buy “service time” (retirement credit) to retire early or possibly increase the amount of their monthly retirement benefit. Those who qualify can buy:
- Military.
- Out-of-state teaching.
- Out-of-state police.
- Wildland firefighter service.
AND - Non-duty disability time.
For these purchases, the member must pay PERS the
full cost to the system of providing the additional retirement credit to the member, plus a $145 fee to cover administrative costs of processing the purchase. That purchase cost can be substantial, particularly if the purchase allows a member to retire before reaching normal retirement age.
If you are eligible to retire without the purchase, you can still make a purchase to increase your monthly retirement benefit.
If you are interested in a full-cost purchase, complete the appropriate section of the
benefit estimate form. You
must request a benefit estimate to receive the estimated cost of what purchases are available to you.
Note that the final purchase cost will not be determined until you actually retire, and could change substantially from the estimated cost.
In simple terms, the amount of a full cost purchase is determined by subtracting the amount required to fund the retirement benefit without the purchase from the amount required to fund the retirement benefit with the purchase. Additional information can be provided upon member request.
The actual cost of your full-cost purchase will depend on a number of individual factors, including:
- The benefit calculation method (i.e., Full Formula, Formula Plus Annuity, Money Match).
- The number of years of membership before your effective retirement date.
- Your final average salary.
- Your eligibility to retire, and whether you would receive an actuarially reduced benefit without the purchase (i.e., whether you will have reached early or normal retirement age at your effective retirement date).
[Note: It will cost less for a member who has already reached normal retirement age to make the purchase than a member who has not reached normal retirement age.]
- Your service classification (General Service, Police Officer & Firefighter).
- Future cost-of-living increases and any tax remedy increases.
From 2016 to 2018, the average full cost purchase (military and out-of-state-teaching purchases) was $116,760 (Median: $80,000), with actual costs ranging from $145 to over $900,000. Actual costs will depend on your specific situation.
For more information read:
Full-cost purchases: questions & answers.