Purchasing Service Credit
Types of Purchasable Service Credit
Military Service in the U.S. Armed Forces: Regular & Interrupted
Regular Military Service
Military Service That Interrupted Teaching
Ohio National Guard or Reserve Military Service
Section 3307.75 and 3307.751, Revised Code including:
-
Regular military service;
-
Full-time service with the American Red Cross in a combat zone; and
-
Prisoner-of-war periods within regular duty military service dates.
Armed forces include Army, Navy, Air Force, Marine Corps, Coast Guard or:
-
Auxiliary Corps established by Congress; and
-
Army Nurse Corps, Navy Nurse Corps or Red Cross nurse serving with the
Army, Navy, Air Force or hospital service of the United States of America.
Eligibility Requirements
Following is a list of the basic eligibility requirements:
-
You must accumulate at least one year of contributing service credit in
STRS Ohio after the regular military service to be purchased is performed.
If your employment is part time, it must total at least one year of service
credit.
-
Credit cannot be purchased if the regular military service is or will be
used in any other retirement program, including a career military pension.
Credit is purchasable even though a Social Security or military reserve retirement
benefit is paid based on the same service. Military reserve retirement refers
to retired pay for nonregular service under Chapter 67 of Title 10, United
States Code.
-
Eligibility to purchase credit is evaluated by the retirement system (STRS
Ohio, OPERS or SERS) in which you plan to purchase the military service.
How Purchasable Credit is Determined
Both purchasable and free credit for regular military service is determined on
an eight-month basis per fiscal year. Total service credit cannot exceed one
year in any STRS Ohio fiscal year.
Maximum Credit
The maximum credit you can buy is:
-
Five years — Regular military service or American Red Cross service
in a combat zone. This maximum includes Ohio National Guard and reserve military service.
-
Five years — Prisoner-of-war periods (can be concurrent service that
is purchased as regular military service).
For each year of purchasable credit, you must have at least one year of service
in STRS Ohio.
Free Military — Up to 10 years of retirement credit
are free if you entered regular military duty in the U.S. armed forces within five months
of Ohio public teaching service and returned to Ohio public service within two
years of discharge (unless delayed one year by continuous professional training).
One year of contributing service credit must be established following your return
to Ohio public service, and an honorable discharge or transfer to inactive duty
is necessary to qualify for free military credit.
Certification
To request a certification form for regular military service in the U.S. armed forces, call STRS Ohio toll-free at 1-888-227-7877.
A copy of your DD-214 discharge papers or NA Form 13038 must be submitted with the certification form.
Cost
If STRS Ohio membership and the regular military service began before July 1, 1989,
the cost is determined by:
-
Multiplying the first contract or full-time equivalent earnings for Ohio
public service following the regular military service by the STRS Ohio contribution
rate when the military service began; then
-
Multiplying by 4% annual compound interest (subject to change) from the
military ending date through the month of purchase; then
-
Multiplying by the number of years eligible for purchase.
Example
Assume regular military service was from Sept. 1, 1976, through Aug. 31, 1979. Full-time
STRS Ohio-covered teaching service began Sept. 1, 1980, at an annual salary
of $9,500.
To estimate the cost to purchase 3.00 years of credit for military service:
Step 1: Using the table below, find the STRS Ohio member
contribution rate in effect on Sept. 1, 1976, and multiply it by $9,500.
$9,500 x 8.0% = $760
Member Contribution Rate &
Salary Base |
| 9/1/1920–8/31/1945 |
4.0% up to first $2,000 |
| 9/1/1945–8/31/1951 |
5.0% up to first $3,000 |
| 9/1/1951–8/31/1959 |
6.0% of total compensation |
| 9/1/1959–6/30/1968 |
7.0% of total compensation |
| 7/1/1968–12/31/1973 |
7.8% of total compensation |
| 1/1/1974–6/30/1977 |
8.0% of total compensation |
| 7/1/1977–12/31/1983 |
8.5% of total compensation |
| 1/1/1984–6/30/1988 |
8.75% of total compensation |
| 7/1/1988–6/30/1990 |
8.77% of total compensation |
| 7/1/1990–6/30/1994 |
9.25% of total compensation |
| 7/1/1994–6/30/2003 |
9.30% of total compensation |
| 7/1/2003–Present |
10.0% of total compensation |
Step 2: Using the table below, find the 4% annual compound
interest factor for 30 years (1979 until 2009) and multiply it by the answer
from Step 1.
3.24 x $760 = $2,462
Annual Compound Interest Factors
by Years |
| Years |
4% |
8% |
| 1 |
1.04 |
1.08 |
| 2 |
1.08 |
1.17 |
| 3 |
1.12 |
1.26 |
| 4 |
1.17 |
1.36 |
| 5 |
1.22 |
1.47 |
| 6 |
1.27 |
1.59 |
| 7 |
1.32 |
1.71 |
| 8 |
1.37 |
1.85 |
| 9 |
1.42 |
2.00 |
| 10 |
1.48 |
2.16 |
| 11 |
1.54 |
2.33 |
| 12 |
1.60 |
2.52 |
| 13 |
1.67 |
2.72 |
| 14 |
1.73 |
2.94 |
| 15 |
1.80 |
3.17 |
| 16 |
1.87 |
3.43 |
| 17 |
1.95 |
3.70 |
| 18 |
2.03 |
4.00 |
| 19 |
2.11 |
4.32 |
| 20 |
2.19 |
4.66 |
| 21 |
2.28 |
5.03 |
| 22 |
2.37 |
5.44 |
| 23 |
2.46 |
5.87 |
| 24 |
2.56 |
6.34 |
| 25 |
2.67 |
6.85 |
| 26 |
2.77 |
7.40 |
| 27 |
2.88 |
7.99 |
| 28 |
3.00 |
8.63 |
| 29 |
3.12 |
9.32 |
| 30 |
3.24 |
10.06 |
| 31 |
3.37 |
10.87 |
| 32 |
3.51 |
11.74 |
| 33 |
3.65 |
12.68 |
| 34 |
3.79 |
13.69 |
| 35 |
3.95 |
14.79 |
Step 3: Multiply the number of years of military service
by the answer from Step 2.
3.00 x $2,462 = $7,386
In this example, the cost to purchase 3.00 years of credit for regular military service
in June 2009 is approximately $7,386.
If STRS Ohio membership or the regular military service began on or after July 1, 1989,
the cost is based on 50% of the liability to STRS Ohio resulting from this purchase.
The 50% liability cost is calculated on your attained age and the salary base at the time of the purchase. The salary base is the greater of the average of your three highest full years of earnings or the average annual salary calculated on the most recent 36 months of earnings at the time of the purchase. If you have less than three years of earnings, the salary base will be calculated on the length of employment.
To calculate a cost estimate, refer to the chart below. Multiply the percentage opposite your age by the salary base at the time of purchase. This is the cost for
1.00 year of service.
Example:
Assume a member, currently age 35, served in the Army from August 1995 through
July 1997. Full-time STRS Ohio-covered teaching service began Aug. 26, 1997.
The member’s salary base at the time of purchase is $40,333.
To estimate the cost to purchase 2.00 years of credit for military service:
Step 1: Using the table below, find the factor for age 35 and multiply
it by the salary base.
11.7% x $40,333 = $4,719 per year
Step 2: Multiply the number of years of military service by the answer
from Step 1.
2.00 x $4,719 = $9,438
In this example, the current cost to purchase 2.00 years of credit for military
service in August 2009 is approximately $9,438.
Age |
Percentage |
Age |
Percentage |
25 |
5.7 |
50 |
17.1 |
26 |
6.3 |
51 |
17.1 |
27 |
6.9 |
52 |
17.1 |
28 |
7.5 |
53 |
16.8 |
29 |
8.1 |
54 |
16.5 |
30 |
8.7 |
55 |
16.1 |
31 |
9.3 |
56 |
15.8 |
32 |
9.9 |
57 |
15.4 |
33 |
10.5 |
58 |
15.1 |
34 |
11.1 |
59 |
14.7 |
35 |
11.7 |
60 |
14.4 |
36 |
12.0 |
61 |
13.8 |
37 |
12.2 |
62 |
13.2 |
38 |
12.5 |
63 |
12.7 |
39 |
12.8 |
64 |
12.1 |
40 |
13.0 |
65 |
11.6 |
41 |
13.3 |
66 |
11.1 |
42 |
13.6 |
67 |
10.7 |
43 |
13.8 |
68 |
10.2 |
44 |
14.1 |
69 |
9.7 |
45 |
14.4 |
70 |
9.3 |
46 |
14.9 |
71 |
8.8 |
47 |
15.5 |
72 |
8.3 |
48 |
16.0 |
73 |
7.9 |
49 |
16.6 |
74 |
7.4 |
Interrupted Teaching Due to Military Service
Section 3307.752, Revised Code
The Uniformed Services Employment and Reemployment Rights Act requires retirement
plans to allow members to purchase credit for periods of employment missed due
to being activated for military service. In many cases, STRS Ohio’s benefits provide for free credit
for military service (see above). Credit that does not qualify as free may be purchased as interrupted teaching due to military service.
This includes performance of duty on a voluntary or involuntary basis in the
Army, Navy, Air Force, Marine Corps, Coast Guard or one of the following:
-
Reserve components of military;
-
National Guard;
-
Commissioned Corps of the U.S. Public Health Service;
-
Army Nurse Corps, Navy Nurse Corps or Red Cross nurse serving with the
Army, Navy, Air Force or hospital service of the United States of America;
-
Full-time service with the American Red Cross in a combat zone; or
-
Any other category of persons designated by the president in time of war
or emergency.
This service can consist of active duty for training, initial active duty for
training, inactive duty training, full-time National Guard duty or physical
examination for fitness to perform such duty.
Eligibility Requirements
Following is a list of the basic eligibility requirements:
-
Less than a full year of service credit was earned in the STRS Ohio fiscal
year (July 1 – June 30) that was interrupted by the military service.
-
Normal STRS Ohio employment was interrupted by the military service.
-
You began military service within five months of leaving STRS Ohio-covered
employment and returned to the same employer within three months of ending
military service.
-
STRS Ohio membership was not withdrawn during the military absence.
-
You were honorably discharged or released.
How Purchasable Credit is Determined
Purchasable credit for interrupted teaching due to military service is determined on an eight-month
basis per fiscal year. Total service credit cannot exceed one year in any STRS
Ohio fiscal year.
Maximum Credit
The maximum credit you can buy is five years.
Certification
To request a certification form for interrupted teaching due to military service, call STRS Ohio toll-free at 1-888-227-7877.
Submit this form to STRS Ohio along with military documentation that reflects
the exact dates of service.
Once the certification form is submitted, we will contact the employer for
earnings and verification of departure from and return to teaching dates.
Cost
Member pays contributions and interest (if applicable) on earnings he or she
would have earned if not in military service. The interest rate is currently
4% and is subject to change.
-
No interest is charged if the purchase is completed within three times
the length of the member’s period of military service (five years maximum).
Time is calculated from the date of reemployment or the effective date of
Section 3307.752 R.C. (Oct. 29, 1996), whichever is later.
-
If purchase is completed after the interest-free period, interest is calculated
from the date of reemployment or the effective date of Section 3307.752 R.C.
(Oct. 29, 1996), whichever is later.
-
Payroll deduction is not available for this type of service credit.
Employer pays employer contributions (no interest).
Example:
Assume a member was employed during the 1976-77 school year at an annual salary
of $7,900. He taught the first 45 days of school before he was activated for
full-time service with the Ohio National Guard from Nov. 10, 1976, until March
27, 1977. The member then returned to his teaching position on April 1, 1977,
and completed the last 41 days of the school year. The member earned .48 of
a year of STRS Ohio service credit for the 86 days taught during the 1976-77
school year.
To estimate the cost to purchase 0.52 of a year of credit for interrupted teaching due to military
service:
Step 1: Using the table below, find the STRS Ohio member
contribution rate in effect during the 1976-77 school year and multiply it by
$7,900.
$7,900 x 8.0% = $632
Member Contribution Rate &
Salary Base |
| 9/1/1920–8/31/1945 |
4.0% up to first $2,000 |
| 9/1/1945–8/31/1951 |
5.0% up to first $3,000 |
| 9/1/1951–8/31/1959 |
6.0% of total compensation |
| 9/1/1959–6/30/1968 |
7.0% of total compensation |
| 7/1/1968–12/31/1973 |
7.8% of total compensation |
| 1/1/1974–6/30/1977 |
8.0% of total compensation |
| 7/1/1977–12/31/1983 |
8.5% of total compensation |
| 1/1/1984–6/30/1988 |
8.75% of total compensation |
| 7/1/1988–6/30/1990 |
8.77% of total compensation |
| 7/1/1990–6/30/1994 |
9.25% of total compensation |
| 7/1/1994–6/30/2003 |
9.30% of total compensation |
| 7/1/2003–Present |
10.0% of total compensation |
Step 2: Using the table below, find the 4% annual compound
interest factor for 13 years (1996 until 2009) and multiply it by the answer
from Step 1.
1.67 x $632 = $1,055
Annual Compound Interest Factors
by Years |
| Years |
4% |
8% |
| 1 |
1.04 |
1.08 |
| 2 |
1.08 |
1.17 |
| 3 |
1.12 |
1.26 |
| 4 |
1.17 |
1.36 |
| 5 |
1.22 |
1.47 |
| 6 |
1.27 |
1.59 |
| 7 |
1.32 |
1.71 |
| 8 |
1.37 |
1.85 |
| 9 |
1.42 |
2.00 |
| 10 |
1.48 |
2.16 |
| 11 |
1.54 |
2.33 |
| 12 |
1.60 |
2.52 |
| 13 |
1.67 |
2.72 |
| 14 |
1.73 |
2.94 |
| 15 |
1.80 |
3.17 |
| 16 |
1.87 |
3.43 |
| 17 |
1.95 |
3.70 |
| 18 |
2.03 |
4.00 |
| 19 |
2.11 |
4.32 |
| 20 |
2.19 |
4.66 |
| 21 |
2.28 |
5.03 |
| 22 |
2.37 |
5.44 |
| 23 |
2.46 |
5.87 |
| 24 |
2.56 |
6.34 |
| 25 |
2.67 |
6.85 |
| 26 |
2.77 |
7.40 |
| 27 |
2.88 |
7.99 |
| 28 |
3.00 |
8.63 |
| 29 |
3.12 |
9.32 |
| 30 |
3.24 |
10.06 |
| 31 |
3.37 |
10.87 |
| 32 |
3.51 |
11.74 |
| 33 |
3.65 |
12.68 |
| 34 |
3.79 |
13.69 |
| 35 |
3.95 |
14.79 |
Step 3: Multiply the number of years of purchasable
credit by the answer from Step 2.
0.52 x $1,055 = $549
In this example, the cost to purchase 0.52 of a year of credit in October 2009
for interrupted teaching due to military service is approximately $549.
Ohio National Guard or Reserve Military Service
Sections 3307.75 and 3307.751 Revised Code including:
-
Ohio Army National Guard;
-
Ohio Air National Guard; and
-
Reserve military service with the U.S. armed forces.
Armed services include Army, Navy, Air Force, Marine Corps and Coast Guard.
Eligibility Requirements
Following is a list of the basic eligibility requirements:
-
You must accumulate at least one year of contributing service credit in STRS Ohio. If your employment is part time, it must total at least one year of service credit.
-
Less than a full year of service credit was earned in the STRS Ohio fiscal year (July 1-June 30).
How Purchasable Credit is Determined
Purchasable credit for Ohio National Guard and reserve military service is determined by dividing the number of days of active duty by 365. Total service credit cannot exceed one year in any STRS Ohio fiscal year.
Maximum Credit
The maximum credit you can buy is five years. This includes regular military service and Ohio National Guard and reserve military service. For each year of purchasable credit, you must have at least one year of service in STRS Ohio.
Certification
To request a certification form for Ohio National Guard and reserve military service, call STRS Ohio toll-free at 1-888-227-7877.
Submit this form to STRS Ohio along with military documentation that reflects the actual dates of service or a summary of retirement points.
A copy of your DD-214 discharge papers or NA Form 13038 must be submitted with the certification form to certify regular full-time military service, such as basic training.
Cost
The cost is based on 100% of the additional liability resulting from the purchase.
A 100% liability cost is calculated on your attained age and the salary base at the time of purchase. The salary base is the greater of the average of your three highest full years of earnings or the average annual salary calculated on the most recent 36 months of earnings at the time of purchase. If you have less than three years of earnings, the salary base will be calculated on the length of employment.
To estimate a cost, refer to the chart below. Multiply the percentage opposite your age by the salary base at the time of purchase. This is the cost for 1.00 year of service.
100% Liability Cost Factors for Ohio National Guard and Reserve Military Service |
Age |
Percentage |
Age |
Percentage |
25 |
11.3 |
50 |
39.7 |
26 |
12.5 |
51 |
42.0 |
27 |
13.7 |
52 |
44.6 |
28 |
14.9 |
53 |
47.3 |
29 |
16.1 |
54 |
50.1 |
30 |
17.3 |
55 |
53.2 |
31 |
18.6 |
56 |
56.5 |
32 |
19.8 |
57 |
60.2 |
33 |
21.0 |
58 |
64.2 |
34 |
22.2 |
59 |
68.6 |
35 |
23.4 |
60 |
68.4 |
36 |
23.9 |
61 |
68.0 |
37 |
24.4 |
62 |
67.7 |
38 |
25.0 |
63 |
67.3 |
39 |
25.5 |
64 |
66.9 |
40 |
26.0 |
65 |
66.6 |
41 |
26.6 |
66 |
66.3 |
42 |
27.1 |
67 |
66.0 |
43 |
27.6 |
68 |
65.7 |
44 |
28.2 |
69 |
65.4 |
45 |
28.7 |
70 |
65.1 |
46 |
30.4 |
71 |
64.8 |
47 |
32.5 |
72 |
64.4 |
48 |
34.7 |
73 |
64.2 |
49 |
37.1 |
74 |
63.8 |
Example:
Assume a member, currently age 45, was a member of the Ohio National Guard or reserves for a six-year tour of duty before becoming a teacher. Duty included drills one weekend each month and two weeks of annual training.
| Drills |
=24 days a year |
| Annual training |
= 14 days |
| |
38 days per year |
| 38 days per year x 6 years = 228 days |
| 228 days ÷ 365 days = .62 of a year of credit |
Assume the member’s salary base is $40,000.
To estimate the cost to purchase .62 of a year of credit for Ohio National Guard or reserve military service:
Step 1: Using the chart above, find the factor for age 45 and multiply it by the salary base.
28.7% x $40,000 = $11,480 per year
Step 2: Multiply the number of years of military service by the answer in Step 1.
.62 x $11,480 = $7,118
In this example, the current cost to purchase .62 of a year of credit for Ohio National Guard or reserve military service in August 2009 is approximately $7,118.
