Chapters

00:00 Introduction

00:30 Aquiring Service Credit by Working

01:39 Aquiring Service Credit by Certifying Unused Leave

02:32 Aquiring Service Credit for Non-covered Service, Out-of-State Service, and Professional Leaves of Absences

03:24 Aquiring Service Credit for Refunded Contributions and MIlitary Service

04:16 Action Items

05:27 Next Video and Disclaimer

Transcript

Hi everyone, I'm Ryan Earley, vested PERS member, former school finance officer, and host of the PERS Pro YouTube channel. Today, we're exploring the 8 different ways you can accumulate, purchase, and reinstate service credit to accelerate your retirement date by months or even years. Let's get started.

Before we talk about the various ways you can buy time, let's talk about ways you can earn it. In Mississippi, service credit is a foundation of your PERS benefit calculation. To earn credit by simply working, you must meet specific participation and eligibility requirements. Hourly threshold: If you are an hourly employee, you must work at least 20 hours a week or 80 hours in a month to be eligible for PERS and earned service credit. Contract threshold: If you are a contract employee, you must work half time or more for the full academic year to remain eligible for PERS and earned service credit. The 15-day rule: You must work at least 15 days in a month to receive a month of service credit. Special note, prior to July 1st, 2017, PERS members were awarded service credit on a quarterly basis rather than a monthly basis and had to work only 15 days in the first month of the last quarter to receive credit for that quarter. So any service credit accumulated prior to July 1st, 2017 will have been accumulated under the old quarterly basis rule.

One of the most common ways PERS members add time at the end of their career is through unused leave. This is essentially free credit you've earned by not taking all your sick or vacation days. When you retire, your employer certifies your balance of unused, uncompensated leave. This leave is converted into specific service credit based on a specific table established by PERS. Members earn one quarter or three months of service credit with their first 15 days or 120 hours of accumulated leave, and they can earn six months of service credit with their first 78 days or 624 hours of leave. However, from that point forward, individuals accrue an additional month of service credit for every 21 days, or 168 hours, of accumulated unused leave.

Sometimes you have gaps or prior work history that wasn't originally covered by PERS. You may have the option to buy this time back at what is called the actuarial cost. Non-covered service: A vested PERS member may purchase up to 10 years of non-covered service, such as part-time work or work for a non-PERS entity. Out-of-state service: A vested PERS member can purchase up to five years of service for qualifying public non-federal employment in another state. This applies if you are public employee of another state and that service is not being used for a pension elsewhere. Professional Leave: A vested member can purchase up to two years of qualifying professional leave, such as an approved sabbatical or education leave.

What if you left PERS before and took your money with you? Or, what if you served in the military? If you previously withdrew or refunded your service credit, you can reinstate it by repaying the refund plus interest. You must be currently contributing to PERS to do this. Active duty military service: You may receive up to four years of credit at no cost for active duty military service, provided you entered PERS after discharge and are currently vested in PERS. Other military leave of absences: If you don't qualify for no cost credit, you may still purchase up to five years of cumulative service credit for military leave of absences provided you return to your prior PERS employer within 90 days after discharge.

Ready to see how these options impact your retirement timeline? Here are your action items for today. One, review your annual PERS statement. Review your annual PERS statement that is mailed to you and note your total years of service. If you can't locate this statement, you should contact PERS. Special note that the total years of service on this annual statement does not include military service if you are not vested, and it does not include any service credit for unused leave. Two, calculate your current leave conversion. Check your most recent pay stub for your unused accumulated personal, sick, and vacation balances and use the table we showed earlier in this video to see how much service credit you can acquire by certifying your unused leave. Three, get service credit cost estimates. If you have eligible service credit you would like to purchase, request a cost estimate for actual purchase from PERS to see if the investment makes financial sense for you.

Service credit is key to unlocking an earlier retirement and a higher monthly PERS benefit amount. In our next video, we'll dive into how does a Mississippi PERS member buy optional service credit or repay a refund to help you understand the process, payment options, and tax implications. Please make sure you subscribe so you don't miss this and other videos in our new retirement series. If you found this video helpful, can thank me by hitting the thumbs up button and sharing it with other PERS members. If you have a follow-up question about PERS or anything else related to personal finance, please visit our website at perspro.ms and submit your question or topic for a future episode. Thank you for your valuable public service to the state of Mississippi. We'll see you next time.

Disclaimer, this video is for educational and informational purposes only. Neither the host nor this YouTube channel are officially affiliated with, endorsed by, or sponsored by the Public Employees Retirement System of Mississippi. Always consult a qualified professional for personal advice specific to your situation.