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Purchasing prior service credit

New York Teacher

If you were employed by New York City or New York State prior to working for the city Department of Education, you may be able to buy prior service credit that would increase the size of your prospective service pension and may more quickly qualify you for retirement benefits.

It’s worth checking your date of membership in either the Teachers’ Retirement System (TRS) or the Board of Education Retirement System (BERS) to see if you have prior service credit to buy. The date can be found on your Annual Benefits Statement. Purchasing credit for prior service is voluntary, but it increases your Total Service Credit, a key factor in determining your retirement eligibility benefits.

TRS/BERS may already have a prior record of service credit for you. You can find out in two places in the secure section of the TRS website the Service Milestones section of your most recent Annual Benefits Statement (ABS) from TRS or the Planning Tools from your My Home page on the website. If you see a prompt that says “Request Cost Letter,” you have service credit verified by the DOE and you can purchase it. If you’re a member of BERS, you can get information about buying service credit by calling 929-305-3791.

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 a cost letter is the first step to purchasing credit for prior service. 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 because you are worried about the cost. There are several payment options, and you can find the best one for your budget. You may purchase your service credit by using payroll deductions, making a lump-sum payment or transferring funds from your Tax-Deferred Annuity (TDA) account.

The sooner you purchase prior service credit, the better off you will be because accumulating interest will increase the cost over time. In addition, the extra credit may allow you to reach your vesting milestones and other important milestones sooner.

Newer TRS members must have two years of service before the pension system can credit them with purchased prior credit.

In addition to Prior Service Credit, some members may be eligible for Optional Service Credit for Amman Service, which is service such as substitute teaching or per diem work for a city or state public employer in New York during a member’s leave of absence from a TRS-eligible position or after separating from service.

Other TRS members may be eligible for credit for military service that interrupted their employment prior to or after becoming a TRS member.