Thursday, October 18, 2018

Service Credit Purchase

Quick Links:

Service Credit
- Purchase Request Online Form
- Provision Form

Understanding Service Credit Purchase (duration 20:08)
Under the MERS Defined Benefit Plan, participants earn service credit for each month of eligible work. With the approval from the employer, participants can purchase service credit to help them meet early retirement eligibility or increase their pension. Unlike MERS-to-MERS or Act 88 time, purchased service credit cannot be used to reach vesting. Here are some general points to remember:

  • The governing body for the employer must approve all purchases. For the purposes of streamlining service credit purchase approvals, a blanket resolution (or administrative order) may be on file with MERS. This agreement provides uniform approval of employee service credit purchases for a specific situation (e.g., all military time, or requests to purchase time where the employee was hired before a specific date) without the approval by the municipality’s governing body every time this situation is present.
  • Minimum purchase is one month.
  • Purchased service credit cannot be used to meet vesting requirements.
  • Hybrid participants are not eligible to purchase service credit.
  • Service credit purchases may be paid for by the employee, employer or both.
  • Participants may be able to transfer assets from other accounts to make a payment for the purchase, such as: 457 Deferred Compensation Plans; 401 plans; 403(b) plans; and some IRAs (traditional, Roth, and SIMPLE).
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Disclaimer
The information contained in this Web site is being made available as a public service. The information is not intended to constitute legal or investment advice, or to replace official versions of that information. Benefit Estimates or Service Credit Purchase estimates requested through this Web site are not official descriptions of any benefits, and do not represent a promise by MERS to provide any benefit(s) to any person(s). No one can detrimentally rely upon the information provided in, or requested through this Web site. MERS reserves the right to correct any errors, and presents this information without warranties, express or implied, regarding the information?s accuracy, timeliness or completeness. If you believe the information is inaccurate, out-of-date, or incomplete, or if you have problems accessing or reading the information, please call MERS at 800.767.MERS (6377).