Purchasing Optional Service Credit

State and municipal employees earn one year of “service credit” for each full year that they work and contribute to the retirement system. Service credit may be purchased in certain instances, and the most commonly purchased types are listed here.

When reviewing these purchase types, there some important points to consider:

  • There are strict time limits on purchasing service credit – please review details for each specific type of credit.
  • You must be an active member of the Retirement System to purchase service credit. You cannot purchase service credit after you retire or terminate your employment, or if you are an inactive member.
  • Purchases of service credit for years prior to July 1, 2012 must have been made by June 30, 2015.
  • You may purchase a maximum of five (5) years of service credit toward your total years of benefit service (with the exception of a Restoration of Service Credit purchase type).

How do I purchase service credit?

There are various types of service credit you may be eligible to purchase, along with a request form for each type. Once you have completed the appropriate form and have had it certified by your employer, you can submit it to ERSRI for processing. You may pay either by lump sum, an installment agreement via payroll deduction, or a rollover of pre-tax dollars from a qualified plan (i.e. a 401(k)). Once you have selected a payment method, you may not change it, as required by federal law. Use the section below for the more common types of credit as well as the full list.

Listed here are a few of the more common types of credit you may be able to purchase.

For a full list of the various types of service credits and the request forms for each, use the link below.

Optional Service Credit Forms

To read more about the different types of service credits that may be purchased, see pages 9-11 in the Member Handbook.

Restoration of Service Credit – Withdrawal or Refund Payback

  • You can pay to restore your credits after completing one year of service (from the date of your return).
  • You must pay into the system the amount you had refunded to you, plus interest.
  • Service purchases must be made within three years of your rehire date.
  • Unlike other types of service purchases, purchase of withdrawn service credit is not included in the maximum five-year purchase limit. It is considered contributory service and does count toward vesting.
  • Restoration of contributory service credit will effectively restore your retirement credit in the years it was originally earned.

Official Leave of Absence

  • You may purchase up to four years of credit for time spent on an official leave of absence from your employment. You must return to active employment for at least one year before you are eligible to make this purchase.
  • You must make this purchase within three years of your leave concluding.
  • You will be charged the full actuarial cost of the service credits you are purchasing, based on your current age and your eligible retirement age.
  • Purchased Workers’ Compensation leave is considered contributory service and does count toward vesting. However, all other types of purchased leave are considered noncontributory service and do not count toward vesting.

Military Service Credit (prior to ERSRI membership)

  • If you served in the Armed Services prior to being hired as a public employee, you may purchase up to four years of credit for time spent on active duty for service in the United States Armed Services, Reserves, or the Merchant Marine.
  • The purchase of Military Service credit is based on 10% of your first full year of earnings as a member of ERSRI, plus interest as applicable.
  • Purchased Prior military service is considered non-contributory service and does not count toward vesting.

Military Service Credit (Active Duty during ERSRI membership after 6/30/2005)

If you are called to active duty in the United States Armed Services during your active employment as a public employee after 6/30/2005, you may purchase the missed time by paying the contributions that would have been paid had you not been on leave. You must return to active employment within one month of your active duty ending to be eligible to make this purchase.

Purchased Active Duty military service is considered contributory service and does count toward vesting.

Out-of-State and Private School Teaching

  • If you are a public school teacher in Rhode Island, you may be eligible to purchase up to five years of out-of-state teaching or private school teaching time.
  • Service purchases must be made within three years of your initial date of hire.
  • You will be charged the full actuarial cost of the service credit you are purchasing, based on your current age and your eligible retirement age.
  • Purchased Out-of-State and Private School Teaching time is considered noncontributory service and does not count toward vesting.

Credit for Service in a Non-Participating Municipality

  • You may purchase service credit for time spent in other municipalities within Rhode Island that do not participate in MERS, so long as you are not using that time to receive a retirement benefit from that municipality.
  • Service purchases must be made within three years of your initial date of hire.
  • You will be charged the full actuarial cost of the service credit you are purchasing, based on your current age and your eligible retirement age.
  • Purchased Service in a Non-Participating Municipality is considered non-contributory service and does not count toward vesting.