Buying your refunded or military service credit? Make your purchase by August 31 and save

Buying your refunded or military service credit? Make your purchase by August 31 and save

June 3, 2020
older couple sitting outside, woman hugging man's neckIf you plan to buy your refunded or military service credit for your State of Texas Retirement, you should do so by August 31. You’ll pay more for refunded and military service credit starting September 1.
 

What you need to know about buying your refunded or military service credit:

  • The cost of buying withdrawn service credit includes the original withdrawn amount plus 10% interest for each fiscal year from the date of your withdrawal. If you’re mailing your payment, it must be postmarked by August 31, 2020 for you to get the FY20 price. If you miss the August 31, the price of your withdrawn service credit will increase 10% in the new fiscal year. (Note: The August 31 deadline does not apply to Additional Service Credit and waiting period service credit costs. These types of service increase on your birthday.)
  • If you’re paying with a rollover from an outside financial institution other than Texa$aver 401(k) or 457, ERS must receive the payment by August 31, 2020.  Rollovers from outside financial institutions can take 30 to 90 days. Start the rollover process now to ensure you can buy service credit by August 31. If you do not have sufficient funds in your outside financial institution account to cover the entire cost of the purchase, it will take longer since you will have to send in additional funds.  You must wait to send in the remaining amount until ERS notifies you of how much you owe.  If you send it before we have received your rollover payment from your outside financial institution, you may send the wrong amount.  This will cause delays.  Allow sufficient time to ensure all of your funds are here in time.
  • Texa$aver rollovers take seven to 10 business days and are made electronically; no paperwork is required. However, if you do not have sufficient funds in your Texa$aver account to cover the entire cost of the purchase, it will take longer since you will have to send in additional funds.  You must wait to send in the remaining amount until ERS notifies you of how much you owe.  If you send it before we have received your rollover payment from Texa$aver, you may send the wrong amount.  This will cause delays.  Allow sufficient time to ensure all of your funds are here in time.
  • ERS must certify your military service or waiting period before we calculate the cost of the credit. Please allow additional time if you plan on purchasing either of these types of service for the first time.
  • Service purchases must be applied to your ERS account before your retirement date. This can take two to three days after ERS has received your payment for your service purchase. If you need to purchase service credit to be eligible for retirement, you must wait to apply for retirement until after you get a letter or email from ERS verifying that we have applied the service to your account.
Remember, we must get your signed retirement documents by your intended retirement date. If you plan on purchasing service and retiring, give yourself plenty of time to complete the service purchase, apply for retirement and return your documents by the intended retirement date.

See more information on purchasing service, purchasing service with a rollover and the three steps to retirement.