Were you a New York City or New York State employee or did you work as a substitute teacher or serve in the military before joining the Teachers’ Retirement System? If so, you may have the option to buy service credit.

It’s worth checking. Purchasing service credit may increase your prospective pension and, depending on your age, could make you eligible to retire sooner. If you have fewer than five years on the job, buying service credit may also allow you to vest in the pension plan sooner.

Creditable service includes the following:

• Prior service: Creditable service you performed with a New York City and/or New York State public employer before joining TRS that was not transferred to TRS with your membership.
• Amann service: Creditable service, such as substitute teaching or per diem service, that you performed with a New York City or New York State public employer during a leave of absence from your TRS-eligible position.
• Military service: Creditable U.S. military duty you performed before joining TRS or during a leave of absence from your TRS-eligible position.

In all cases, your service must be verified with TRS, and your request for service credit must be made before your effective date of retirement.

You may buy prior service credit by paying the contributions that you would have made had the service been performed as a TRS member, plus any interest your contribution would have earned, for the length of time in that previous position. In certain cases, service credit may not require purchase.

The first step in purchasing credit for service is requesting a cost letter. The cost letter will indicate the amount of eligible prior service, what it will cost to purchase credit and the payment options available to you.

Your date of membership in TRS can be found on your annual benefits statement. TRS may have a prior record of service credit for you. After you log in to the TRS website, you can find out in two places: the Service Credit Summary section of your annual benefits statement and the Planning Tools from your My Home page. If you see a prompt that says “request cost letter,” you have service credit already verified by the DOE and you can purchase it.

TRS does not automatically receive service records from employers other than the DOE. So TRS may not be aware of pensionable prior service in your work history, and you will need to notify TRS of such service. You can detail that prior service on the cost letter request form, and TRS will determine whether you have eligible prior service and what it will cost to purchase credit.

Requesting the cost letter does not obligate you to purchase the credit. The cost letter will indicate the amount of service and the payment options available. Don’t hesitate to buy prior credit because you are worried about the cost. There are several payment options: using payroll deductions, making a lump-sum payment or transferring funds from your tax-deferred annuity account.

If you wish to purchase prior service credit, it’s best to do it sooner rather than later. Due to accumulating interest, the cost will increase over time. But be aware that you must have two years of service in your DOE job before TRS can credit you with the purchased prior service credit.

Board of Education Retirement System members have similar opportunities to buy prior service credit. For more information, call BERS at 929-305-3800.

This column is compiled by Tom Brown, Victoria Lee and Christina McGrath, teacher-members of the New York City Teachers’ Retirement Board.