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Indiana Public Retirement System

Indiana Public Retirement System (INPRS) > My Fund > Public Employees > Purchasing Additional Service Credit Purchasing Additional Service Credit

What factors are considered when a member wants to purchase additional service credit?

A member’s age, years of service and current salary are considered when a member wants to purchase additional service credit.

Why do some members purchase additional service credit?

Some members may purchase additional service credit because it will increase their monthly pension benefit after they retire. The purchase of additional service credit may allow a member to retire earlier.

Why is the price to purchase service credit expensive?

Members who purchase enough service to retire earlier will draw a pension benefit for a longer period of time. Since they will draw a benefit longer, the price to purchase service will be higher.

The price to purchase service can be costly, because members must pay the full actuarial cost. This means the amount due from the member must be enough to cover his or her lifetime benefit.

How is the value of purchasing additional service credit determined?

The value of purchasing additional service depends on factors that are unknown at the time of purchase. Those factors include the date the member stops working and the date the member will begin receiving retirement benefits.

Other determining factors include the member’s highest five years of compensation in a covered position and the full actuarial cost due from the member.

Should I purchase additional service credit?

INPRS does not offer financial advice. You may want to consult with a financial adviser to ensure that purchasing service is the best decision for you.

You may consider using the online benefit calculator. It will allow you to compare the cost of purchasing service credit at various ages to the increase in the monthly benefit amount you would receive. It can help you determine whether the final cost to purchase service is worth the amount of service you are allowed to purchase.

More information on purchasing additional PERF service is available here.

More information on purchasing additional TRF service is available here.

NOTE: We strongly encourage you to consider the information above before deciding to purchase additional service credit. This can be a costly expense. In some cases, your decision may be irrevocable.