You can increase your benefit, but it comes at a cost. Check with us if it's right for you.
What is Service Credit?
Service credits represent how long a member has worked. Employees automatically earn “participating” credit for the years they work in a KPERS-covered position. Purchasing additional service credit could help you vest your benefit faster, get more at retirement and possibly retire sooner.
Don't wait. Purchase costs are based on salary and age. Now is probably the most inexpensive time for you to buy.
How Does the Process Work?
- Contact KPERS or your employer to see if your past service is eligible.
- Complete an Application to Purchase Service Credit: KPERS & KP&F | Judges
- Your designated agent completes the employer part of the form and sends it to KPERS.
- KPERS calculates your cost and sends you a letter. At this point, you can consider the cost and benefits.
- To complete the purchase, sign the paperwork, arrange for payment and return both to KPERS.
- KPERS receives your payment or payroll deduction commitment. We must receive your complete payment on or before your last day on your employer's payroll.
- KPERS adds service credit to your record after the purchase is completed.
Federal Tax Requirements on Service Purchases
Only active members may purchase service. Federal law may limit you if you are purchasing service with after-tax money. This limit applies only to after-tax contributions.
- Not on purchases with rollover or payroll deduction
- Annual limit changes each year
- Can cause a delay in completing a lump-sum after-tax purchase
- Most likely to affect high-cost purchases (large number of years or member's age and salary)
Types of Service Credit You Can Purchase
- Forfeited judges service
- Forfeited KPERS and KP&F service
- Military Service
- Senior judges service (retired judges only)
- VISTA service
- Additional benefit service (first took office after age 60)
Check with your employer to see if your past public service qualifies. He or she also will be able to help you start the purchase process.
District Magistrate Judges may increase or convert certain types of DMJ service.
- Convert KPERS District Magistrate Service to Judges Distrcit Magistrate service (1.75% to 3.5% multiplier)
- Increase Judges District Magistrate service rate from 3.5% to 5% (membership date before July 1, 1987)
Cost of Purchase
If you are under age 45, a year of service generally costs about 6 percent of your annual salary (or final average salary, whichever is higher). See example below. Each year after age 45, the actuarial cost increases significantly.
|KP&F Service Purchase Example - Under Age 37|
|Salary (or FAS)||Service Purchase Cost|
|$30,000||Salary x 7.15% = $2,145|
|$50,000||Salary x 7.15% = $3,575|
|$70,000||Salary x 7.15% = $5,005|
Benefit of Purchase
|Benefit of Purchasing Service Credit|
|Final Average Salary||Each Additional Year of Service, Your Benefit Increases By ...|
|$30,000||$233 per month||$2,800 per year|
|$50,000||$291 per month||$3,500 per year|
|$70,000||$350 per month||$4,200 per year|