- Service Credit Purchase Online Form
- Service Credit Purchase 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).