Service credit is accrued through contributions during school employment and for other service at no cost, or for other service that may be purchased.
The amount of an employee’s service credit determines:
It also determines the eligibility of any dependents for survivor benefits, the amount of benefits, and availability of health care coverage.
Select a type of service credit below to learn how it is earned or purchased and what the employer responsibilities are.
Employees earn service credit for time worked for a school, college, or university. This is called contributing service credit.
One year of service credit is granted when an employee completes 120 or more days of paid school employment within a fiscal year (July 1 through June 30).
Key details:
If an employee works less than 120 days, the employee will receive a fractional amount of service credit prorated on the basis of a 180-day school year.
An employer may establish an Early Retirement Incentive (ERI) plan, which allows certain employees to retire early or increase service credit of employees eligible to retire.
Employers should contact their legal counsel for advice on adopting an ERI plan. The requirements for an ERI plan are found in the Early Retirement Incentive Plan Guide.
An ERI Cost Calculator also is available in eSERS. This tool helps employers estimate the district’s cost if an ERI plan is adopted.
An employee may receive additional service credit at no cost for periods the employee received Workers’ Compensation.
If an employee was off payroll due to a school-connected injury and received Workers’ Compensation, the employee may receive up to three years of service credit for that time, with proof of compensation.
Employees must provide a Workers’ Compensation Awards History Report for evaluation of service credit.
Certain types of service credit may be available for purchase by an employee. Depending on the type of service credit available to the employee, the employer may be responsible for certifying information and/or making payments to SERS.
If the employee is eligible to purchase service credit, SERS will send a cost letter to the employee for purchasing all or a part of the service credit by:
Other funds and plans also can be used to purchase service credit. These include:
All service credit must be purchased before retirement.
If the employer offers a payroll deduction plan with amounts designated as picked up contributions, SERS will provide a Payroll Deduction Authorization Form upon request. Once the form is completed by both the employee and employer, the form must be returned to SERS.
The employer is responsible for transmitting payroll deduction payments to SERS through eSERS using the SCP Payroll Deduction Submission application. Once the employer has transmitted the payments, the liability will appear in the Payment Remittance application.
Due to federal tax law, once an employee elects payroll deduction with picked up contributions, the employee cannot increase, decrease, or stop deductions, unless the employee is terminated or retires.
Important: Any payroll deduction purchase plan received on or after January 1, 2019, must be on a post-tax basis. SERS no longer accepts pre-taxed, picked-up payroll deductions for the purchase of service credit.
Reminder:
If an employee previously earned SERS service credit and received a refund of contributions for this service after terminating employment, the employee may restore all or part of the service credit.
After establishing 1.5 years of new service credit with SERS, State Teachers Retirement System (STRS), or Ohio Public Employees Retirement System (OPERS), the Ohio Police and Fire Pension Fund (OP&F) or the Ohio Highway Patrol Retirement System (HPRS), the employee can restore SERS credit cancelled due to a refund by repaying refunded contributions plus interest.
Refunded service may be restored by:
If offered by the school district, payment may be made through a payroll deduction plan. An employee also may purchase refunded service from other state pension plans.
If an employee was on a school board-approved unpaid Leave of Absence (LOA) for educational or professional purposes, illness, or disability, the employee may purchase LOA service credit for this time by paying both the employee and employer contributions, plus interest.
The LOA period begins on the first day of the approved leave for which contributions were not made, and ends when the approved leave ends or the employee returns to contributing service, whichever happens first.
The employer must certify the earnings the employee would have received during the LOA so SERS can calculate the cost to the employee. This information is submitted on a Certification of Salary for Non-Contributing Service form.
Service credit may be purchased for multiple leaves of absence. For multiple leaves of absence:
For service on or after July 1, 1991, an employee may purchase credit for service in a position for which SERS’ membership was compulsory, but the employee was permitted to, and did, sign an exemption from membership form.
Cost: 20% of the employee’s current year of compensation.
Under certain circumstances, employees may be eligible to purchase STRS or OPERS exempt service with SERS. If SERS prepares the cost estimate, the cost for each year is 20% of the employee’s most recent years of SERS compensation.
The employee cannot purchase this credit if the compensation for the service was subject to taxes under the Federal Insurance Contributions Act (FICA).
For service before July 1, 1991, an employee may purchase credit for service if SERS’ membership was optional, and the employee did not choose to enroll in SERS’ membership. The cost for each year of service credit is an amount equal to:
The employer must certify the earnings the employee received during this period so SERS can calculate the cost to the employee. This information is submitted using the Certification of Salary for Non-Contributing Service form.
Pre-1991: If an employee was employed by a school and membership was required but contributions were not paid:
Post-1991: If an employee was employed by a school and membership was compulsory, but contributions were not paid:
After SERS receives this information and calculates the cost, a cost statement is sent to the employee and/or the employer, depending on when the service was performed. Currently, the interest is at 7.5%.
An employee may purchase credit for service with:
Service Credit Purchase Limits
For each year of credit purchased, the employee must pay contributions based on the first year of full-time SERS-covered employment following termination of the service being purchased, plus interest from the date of SERS’ membership to the date of payment.
If an employee was required to resign due to pregnancy or adoption of a child, the employee may purchase service credit for that time.
To qualify, the employee must have:
Limits and Costs:
There are several ways an employee may obtain military service credit depending on when the employee entered military service and returned to public employment. These include:
Up to 10 years of free military service credit may be granted if an employee:
This service cannot be added if it is or will be used in another retirement program except Social Security. There is no cost for this service.
If an employee is not eligible for free credit for military service that interrupted school employment, the employee may purchase up to five years of service credit if the employee:
The employer must certify the earnings the employee would have received during the period of military service so SERS can calculate the cost. The cost is an amount equal to the employer and employee contributions in effect at the time if the employee had remained on the school’s payroll. This information is submitted using the Certification of Salary for Non-Contributing Service form. The employer is responsible for the employer contributions.
If the employee is not eligible to receive free or interrupted military service credit, the employee may still be able to purchase:
If the employee combines SERS service credit with any STRS and/or OPERS service credit at retirement, the total amount of service credit is limited to five years among all the systems. The employee must send SERS a copy of a discharge (DD214), or separation notice.
This service cannot be purchased if:
A school board member serves on a city, local, exempted village, or joint vocational school district board of education. A governing board member serves on an educational service center governing board.
If a SERS member served as a school board member or governing board member before July 1, 1991, the member may be eligible to purchase 0.250 of a year of service credit for each year of board service with the member’s retiring system.
The member:
If board service overlaps with other SERS service credit, it cannot be purchased.
An employee of more than one Ohio public retirement system, including OPERS or STRS, may:
The system with the greatest service credit will be the system that will calculate and pay the benefit. While the salaries in one year will be added together, if the service credit in each system is for the same year, the employee cannot be credited with more than one year of service credit for each 12 months in a year.
If an employee refunded contributions from the Cincinnati Retirement System, the employee can purchase that service. If contributions are still on deposit, they may be transferred to SERS prior to retirement.
If an employee refunded contributions from OP&F or HPRS, the employee can purchase that service. If contributions are still on deposit, they may be transferred to SERS prior to retirement.
If you have questions about your employer responsibilities or need assistance with eSERS, contact Employer Services at 877-213-0861.
