There are six different types of service that you may be eligible to
purchase while active:
A member currently participating in one of the state administered retirement systems who has taken a refund of retirement contributions for previous employment may regain the service lost by paying the amount of contributions withdrawn plus interest calculated from the time of withdrawal. The member must work for at least six months to validate the purchase. A recontribution of a refund will not alter the member’s participation date.
Verification Required: Information should be on file at KRS
If a member worked in a participating position and, due to some oversight, contributions were not reported to KRS, the member can purchase those months of service or missing contributions. KRS will also bill the employer for missing employer contributions. Once KRS receives both the member and employer contributions, KRS will reinstate the original participation date for that service.
Verification Required: Form 4225 - Verification of Past Employment or Personnel Form
If you previously received a cost for Omitted service and did not act on that cost by the due date, you may request a recalculation. The recalculation will include interest as of the date of the original cost. Once KRS receives both the member and employer contributions, KRS will reinstate the original participation date for that service.
Verification Required: Information on file at KRS
If a member was called to active duty military, the member can purchase the missing months of service. The cost is based on the contributions the member would have paid had they been participating during that time. The member’s employer also must pay the missing employer contributions.
Verification Required: Form DD-214 and Personnel Forms
Allows a member to purchase military service in excess of six years if certain conditions are met.
Verification Required: Form DD-214 and Personnel Forms
If a member returns from military leave and does not immediately
return to work, the member can purchase up to ninety days between the date of discharge and return to employment. The
employer also must pay the employer portion for this period of time.
Verification Required: Form DD-214 and Personnel Forms
No other service purchase types are available if you began participating on
or after January 1, 2014. Please refer to the Summary Plan Description for more
details and eligibility criteria.
Paying for a Purchase
Eligible service credit may be purchased by the following payment methods,
provided it falls within the limitation set forth in Section 415 (c) of the
Internal Revenue Code. Any combination of these three methods may be used to pay
for most service purchases.
- Lump Sum Payment: Service may be purchased by making a lump
sum payment to KRS. In many instances, the lump sum payment amount for some
purchase types is limited by federal tax laws.
- Installment Purchase of Service Agreement (IPS): Members
may choose to have the cost of service deducted from their paycheck for a period
not to exceed five years. To be eligible, the purchase cost must be at least
$1,000.00. An interest charge of 7.50% compounded annually will be applied. KRS
offers both before- and after-tax IPS contracts; however, some purchases may
only qualify for before Tax IPS contracts. The before-tax IPS contracts are
irrevocable contracts, so you should be mindful of the conditions of the
contract before you enter the agreement. Additionally, tax laws limit how much
money you can pay, if any, on an after tax contract for some service types.
- Rollover or Transfer From a Qualified Plan: The Internal
Revenue Code allows KERS, CERS, and SPRS to accept rollovers from other
qualified plans such as Section 401(a), Section 401(k), Section 403(b), Section
457, a "Rollover" IRA or Traditional IRA. In order to complete a direct rollover
or transfer of funds from another qualified plan to purchase service with KRS,
the member and the financial institution making the direct rollover or transfer
of funds must complete a Form 4170, Direct Transfer/Rollover Acknowledgement Form.