PURPOSE

The purpose of this policy is to clarify service credit purchase provisions of the County Employees’ Retirement Law (CERL) in accordance with conditions set forth in resolutions adopted by the Sacramento County Board of Supervisors and governing bodies of SCERS member districts, and guidelines adopted by the Board of Retirement.

POLICY

A member may purchase eligible Service Credit by paying the required contributions and interest as determined by SCERS.

APPLICATION

Service Credit Categories

Active Military Leave (Government Code §§31649, 31653)

A member who resigns or obtains a leave of absence from a Participating Employer to enter active military service, and later returns to SCERS-covered employment, can receive Service Credit for the active military service. To receive Active Military Leave Service Credit a member must:

• Provide a Certificate of Release or Discharge from Active Duty (Form DD214) issued by the U.S Department of Defense;
• Separate from active military duty under conditions other than a dishonorable discharge; and
• Return to SCERS-covered employment within the period established by law after release from active duty, or within 90 days after recovering from a disability incurred while in active duty.

If a member dies while performing qualified military service, they will be treated as if reemployed for purposes of vesting and death benefits.

SCERS records the military time in the membership file and the service is considered in the calculation of benefits at retirement. The contributions made by the employer shall be available for retirement purposes only and not available to the member if resigning from employment after reinstating from military service.

Prior County Service While on Deferred Status (Government Code §31641.56)

A member may purchase service for a Participating Employer that was not eligible for coverage by SCERS that was performed between two periods of service that are covered by SCERS. SCERS may require earnings and employment verification from the employer. Service performed as a contractor through a temporary agency or third party is not eligible for purchase.

Pre-Membership Employment (Government Code §31641.5)

Work performed for a Participating Employer in a capacity not eligible for SCERS membership (e.g., as a seasonal, intermittent or temporary employee) before becoming a SCERS member may be purchased as Service Credit. SCERS may require earnings and employment verification from the employer. Service performed as a contractor through a temporary agency or third party is not eligible for purchase.

Public Service (Government Code §§31641.1, 31641.2, 31641.4, 31478, 31479, 31479.2)

A member may purchase service credit for verified service in one or more of the following agencies as defined in:

• Federal Military and Civilian service including the District of Columbia
• State of California
• Any California City or County
• Any Public Corporation, municipal corporation or public district situated in whole or in part within the County of Sacramento

Members cannot receive, or be eligible for, a pension or retirement allowance from the entity which is the origin of the credit for Public Service. However, public service for the U.S. military that counts towards reservist retirement pay is purchasable. Additionally, disability benefit payments made to members from the Veterans Administration are not considered pensions or retirement allowances.

If service in any entity was covered by a retirement system into which “redeposit” can be made (with full rights of reciprocity, including “final compensation”) then a member cannot purchase such service credit as public service credit with SCERS.

A SCERS member may purchase a maximum of four (4) years of public service credit. A member may take up to five years to complete purchase of any public service credit once the first initial payment is made.

If a member, after purchasing public service credit, becomes eligible to receive a pension from the public entity for service in such entity, the member must be refunded public service contributions and service credit adjusted in the member’s account.

Redeposit of Previously Withdrawn SCERS Member Contributions (Government Code §31652)

A member who terminates their membership with SCERS, withdraws their member contributions, and later again becomes a member of SCERS may redeposit the withdrawn funds plus the interest that would have accrued up to the redeposit date had the funds remained on account at SCERS. The redeposit may allow the member to preserve the original benefit tier.

Partial redeposits are not allowed. The full amount of the previously withdrawn funds must be repaid in full and all previous service credit restored. A redeposit of contributions restores past service credit with SCERS.

Forgoing a decision to redeposit means prior service credit does not count towards becoming vested.

Uncompensated Leave of Absence Due to Illness (Government Code §31646)

Upon returning to active service following an uncompensated leave of absence due to their own illness, a SCERS member may receive up to a maximum of one year of Service Credit for the period of such absence.

Service Purchase Payment Methods

A SCERS member may submit a service purchase request up until the date of retirement. The purchase shall be completed within 120 days of the effective date of retirement (Government Code Section 31485.7) using one or more of the following payment methods:

• Lump sum payment in full or in part. Any balance due after applying the lump sum payment may be paid using payroll deduction installment payments.
  o Personal check or a cashier’s check made payable to SCERS.
  o Direct Rollover or Trustee-to-Trustee Transfer. This is a transfer of pre-tax funds (eligible rollover distribution) from a qualified retirement account, such as a 457(b) or 403(b), usually earned from your former employment.
  
  SCERS will only accept a direct rollover or trustee-to-trustee transfer with the required form completed and signed by the administrator of the transferring plan.
   
• Payroll deduction installment payments divided equally over the term of the contract. The specific contract term may vary depending on the type and duration of service purchased. In no event shall any installment payment be less than twenty-five dollars ($25) biweekly.
  
  The service purchase installment deduction amount is in addition to regular Member Contribution deductions. The installment payments are currently deducted on a pre-tax basis and will continue accordingly unless the Internal Revenue Service should later require the installment payments to be deducted on a post-tax basis.
  
  To establish an installment payment plan for a service purchase, a member must sign a
  purchase contract and submit to SCERS. A purchase contract is irrevocable and once it
  begins, the payment cannot be stopped, increased, or decreased.

APPENDIX

Service Purchase Chart

AUTHORITIES

California Government Code Sections 31485.7, 31640-31658
SCERS Bylaws Chapter 1, Section 21
Sacramento County Board of Supervisors Resolution 2003-0517

RESPONSIBILITIES

Executive Owner: Chief Benefits Officer

POLICY HISTORY

Date	Description
10-16-2024	Board approved new policy