Earning Pension Service Credit

Service credit is a period of employment in which you make contributions. You begin earning service credit on the date you become an eligible employee. Service credit includes:

• Your total service credit at the time of termination
• Unused vacation balance when you leave employment with the City, except if you die as an active employee
• Time spent serving in any United States uniformed military service (as provided under the Uniformed Services Employment and Re-employment Rights Act), and only if you entered active duty while a City employee.
• Service if you are rehired after retirement and elect to contribute to the Fund.

You do not earn service credit during a leave of absence (unless it is an approved military leave). A leave of absence is an unpaid leave from the City or a leave while you are receiving workers' compensation benefits. Sick leave and salary continuation payments are not considered a leave of absence.

Deferred retirement
Deferred retirement is your right to a retirement benefit when you become eligible after termination of employment. To be eligible for a deferred retirement benefit from the Fund, you must have at least five years of service credit. You receive one year of service credit for each 12-month period in which you earn at least 1,000 hours of service credit.

Buying service in reduction in force
If your position is eliminated because of a reduction in force, you may be able to purchase service credit in order to be eligible for future retirement benefits by "buying forward." To buy forward, you must have:

• Five or more years of service credit
• Be within two years of eligibility for retirement

Be designated as terminated under a reduction in force by the City Manager or a department head not under the City Manager.

You buy forward by making a lump-sum payment of the total of your contribution and the City's contribution for the amount of service you would need to be eligible for retirement. Here is the formula used for determining the payment amount:

You must make the lump-sum payment within 90 days after your last day of employment.

Service will be credited on a month-by-month basis as if you had remained a City employee and active Fund member.

See Chapter 40A-14 for more information about buying forward.

Reinstatement of prior service credit
If you stop working for the City and are later rehired, the period before your rehire is called a break in service. If you previously deferred your retirement (because you had at least five years credited service and left your contributions in the Fund) and you are later rehired by the City, your total service credit will include your original period of service but will not include your break in service.

You are eligible to reinstate your service credit if your break in service is six or fewer years and you received a refund of your contributions when you left the City. To reinstate service credit, you must repay the refund (with interest) to the Fund. You can request reinstatement within the 24 months after you complete 12 consecutive months of service.

If you previously forfeited your contributions, you can request that the Fund credit those contributions to you to reinstate the prior service credit you earned. You are not eligible to have this service reinstated if your break is more than six years. Reinstatement forms are available in the Employees' Retirement Fund office.

Service credit after retirement
If you retire and are later rehired by the City in a permanent position that is eligible for participation in the Fund, you must notify the Fund Administrator to stop your retirement benefit payments. Retired Fund members who return to work at the City as permanent employees may choose not to contribute to the Fund. You can re-apply for retirement benefits when you stop working for the City. If you made contributions during your reemployment, your new benefit will be based on any additional service credit you earned and the pension formula in place at the time of your termination.

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