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Service Credit

1. What is service credit?
2. How do I calculate service credit?
3. How do I determine if an employee is full time or part time for service credit calculation?
4. If a full-time teacher or administrator leaves during the year, does he or she earn a full year of service credit?
5. Can a part-time teacher earn a full year of service credit?
6. What is meant by the “120-day employment relationship?”
7. If I know the days and hours a member worked, can I calculate service credit on the method which provides the highest credit?
8. Can I use two different methods for calculating service credit for a member?
9. How do I correct service credit for a member for a prior fiscal year?
10. How do I calculate service credit for coaches that work part-time at our district? They are paid a set amount for the season and they do not keep track of the days they work.
11. If a member works 120 days do they automatically receive a full year of service credit?
12. How do I calculate service credit for someone that works half-days?
13. Where can I get the required paperwork to set up a tax-deferred payroll deduction plan to purchase service credit?
14. For members to purchase service credit, do I have to offer both after-tax and pre-tax plans?
15. How does a member get more information about purchasing service credit?
16. Can I get a copy of a member cost statement for purchasing service credit?
17. Can I send the payments for payroll deduction with my payroll report for purchased service credit?

 

1. What is service credit?
   Service credit is the percentage of a full year granted to an educator for teaching services performed during the fiscal year. Accumulated service credit determines eligibility for benefits and in most cases is a factor in determining the amount of retirement benefits.
2. How do I calculate service credit?
   Service credit is governed by State Teachers Retirement Board Rule 3307:1-2-01. The calculation is based on the employee’s full-time or part-time status as defined by the rule. The calculation also is based on one of three factors: days, hours or full-time equivalent (FTE). For specific information about calculating service credit, see the service credit calculator and service credit decision tree.
3. How do I determine if an employee is full time or part time for service credit calculation?
   A member is full time if they have a contract that begins and ends on the first and last day of the 365-day calendar year or the 180-day academic year and the contract provides compensation equal to 100% of full-time salary as defined by the teachers salary schedule for a teacher of the same status teaching all day, every day. A member is part time if he or she does not meet the criteria for full-time teaching or if he or she is a full-time teacher working less than 120 full days.
4. If a full-time teacher or administrator leaves during the year, does he or she earn a full year of service credit?
   A full-time teacher or administrator is granted a full year of service credit for 120 days of full-time service. If the teacher or administrator leaves prior to 120 days of full-time service, service credit is calculated as part-time service and he or she generally would not qualify for a full year of service credit.
5. Can a part-time teacher earn a full year of service credit?
   Part-time teachers earn a full year of service credit after 180 days or 1,000 hours of service. In addition, part-time teachers are eligible for a full year of service credit if they work at least 90 days or 500 hours, have an employment relationship with the employer for at least 120 days of the school year and earn the state minimum salary.
6. What is meant by the “120-day employment relationship”?
   This relationship exists between a teacher and employer when the teacher has been employed for at least 120 days of the school year. The school year is defined as the scheduled academic year, usually from late August until early June. In addition to teachers under contract for at least 120 days, substitute teachers on the district’s sub list for the entire year would also be considered to have met the 120-day employment relationship.
7. If I know the days and hours a member worked, can I calculate service credit on the method which provides the highest credit?
   No. The State Teachers Retirement Board Rule governing service credit indicates that if the number of days is known, credit must be based on days.
8. Can I use two different methods for calculating service credit for a member?
   No. Only one method of calculation, days, hours or full-time equivalent, can be used per fiscal year per member.
9. How do I correct service credit for a member for a prior fiscal year?
   Send a letter to STRS Ohio with the following information:
   • Member’s name
   • Social Security number
   • Prior fiscal year to be corrected
   • Correct service credit
   • Method used to substantiate corrected service credit calculation: days worked, full-time equivalency (FTE),etc.
10. How do I calculate service credit for coaches that work part-time at our district? They are paid a set amount for the season and they do not keep track of the days they work.
    Service credit is calculated based upon the number of days or hours worked. For each day they are coaching they should receive credit for that day. Therefore they must record the days or hours worked so that proper credit can be reported.
    
    
11. If a member works 120 days do they automatically receive a full year of service credit?
    If the member were full-time according to the STRS Ohio Board Rule definition, then they would receive 1.0 year of credit for 120 days worked. If credit is calculated using the part-time rule, then the determining factor would be based upon if the member worked at least 90 days, had 120-day employment relationship and earned state minimum salary.
    
    
12. How do I calculate service credit for someone that works half-days?
    Each day worked they receive credit for that day. It doesn’t matter whether they work 1 hour or 8 hours. A day is a day. Therefore each day worked is counted towards the total.
    
    
13. Where can I get the required paperwork to set up a tax-deferred payroll deduction plan to purchase service credit?
    Your board must first pass a resolution authorizing a tax-deferred plan. A sample resolution is available for reference as a PDF. You must then complete the Notification of Adoption of a Tax-deferred Payroll Deduction Plan form and forward a copy of the form and the board resolution to STRS Ohio at least 60 days prior to the effective date of the plan. Once we receive your notification and board resolution we will send you a letter confirming the plan you selected and the effective date. Please review the letter and contact us if there are any discrepancies.
    
    
14. For members to purchase service credit, do I have to offer both after-tax and pre-tax plans?
    No. It is your decision whether you want to offer pre-tax only or both pre-tax and after-tax.
    
    
15. How does a member get more information about purchasing service credit?
    A member interested in obtaining information regarding purchasing eligible service credit should contact the STRS Ohio Member Service Center toll-free at 1-888-227-7877. A Member Representative will review all of their options and forward to them a cost statement listing the total cost to purchase the credit.
    
    
16. Can I get a copy of a member cost statement for purchasing service credit?
    The member must provide you with a cost statement. Statements will not be released to employers without the consent of a member.
    
    
17. Can I send the payments for payroll deduction with my payroll report for purchased service credit?
    No. The payroll deduction money should be sent monthly with the payroll deduction remittance either by mail or via the STRS Ohio employer Web site. The Cash Receipt Remittance form should also be completed and submitted.

For additional information on calculating service credit refer to the Earned Service Credit section of the Employers Manual or calculate credit using the service credit calculator.

 

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