A look at service credit
Definitions can differ for pension, health care, retirement plans
By Michael Pramik, Ohio Public Employees Retirement System
Feb. 3, 2022 – Service credit in the Traditional Pension Plan and Combined Plan or contributing months for Member-Directed Plan participants represents the period of time you are employed by a public employer and making contributions to OPERS.
There are different thresholds of service time that count toward your pension benefit and health care eligibility, and pensions and health care are set up differently for those in the various OPERS retirement plans.
Let’s take an introductory look at service credit for retirement and health care in each of our plans.
Traditional Pension Plan and Combined Plan
Retirement
For the Traditional Pension Plan and Combined Plan, members earn contributing service credit when contributions are remitted to OPERS by employers and posted to the members’ OPERS accounts. The service credit is calculated each reporting month, and members can’t receive more than one year of service credit for any calendar year.
The “reporting month” is an important term. It reflects the earnings that fell within a specific earning period, which may overlap a calendar month. That could have implications on service credit in a given month, especially credit that applies to health care eligibility.
Members earn full-time service credit for a reporting month by earning a minimum salary that has varied over the years. For 2022, this minimum earnable salary is $696.84. It will increase by 1.75 percent annually through 2029.
If you work less than 12 months in a year, or your earnable salary is less than the amounts listed above, you will receive part-time service credit toward your pension.
How does this service credit add up for part-time and full-time retirement benefits? It depends on your retirement group, one of three member classifications. (You can always find out what group you’re in by looking at your annual statement, available in your online account.) Refer to the eligibility charts in the Service Credit and Contributing Months leaflet to determine the age and service requirements for retirement eligibility based on your retirement group.
Health care
As of Jan. 1, 2014, to earn full service credit applicable to eligibility for OPERS health care in the Traditional Pension and Combined plans, you must earn a minimum of $1,000 per reporting month, and only the following service credit types will apply to health care program eligibility:
- Contributing service (which includes plan change service credit)
- Eligible Ohio Retirement System service combined at retirement
- Interrupted military time (USERRA)
- Unreported public service
- Redeposit (refunded/restored) service
Unlike pension service credit, members cannot earn partial credit for health care eligibility in a given month.
Please refer to the OPERS Health Care Program Guide for information about the health-care options that OPERS offers retirees.
Member-Directed Plan
Retirement
If you are participating in the Member-Directed Plan, you earn contributing months rather than service credit when your contributions are remitted by your employer and posted to your OPERS account.
Employee contributions are always fully vested. Employer contributions to your account are vested based on your contributing months of service. One year of participation is defined as 12 contributing months of participation in the plan, and full vesting takes place after five years.
Health care
A portion of the employer contribution of participants in the Member-Directed Plan is credited to a Retiree Medical Account. This account can be used for reimbursement of qualified health, dental and vision care expenses, including premiums for health insurance coverage.
There are two vesting schedules for the RMA, depending on when members were hired. Refer to the OPERS website for more information about each.
You can begin to use vested funds from the RMA after taking a distribution from your OPERS account by either a refund or retirement.
Purchasing service credit
OPERS members may be eligible to purchase service credit and, in limited instances, free credit may be available. See the OPERS website and the Service Credit and Contributing Months leaflet for more information.
Michael Pramik
Michael Pramik is communication strategist for the Ohio Public Employees Retirement System and editor of the PERSpective blog. As an experienced business journalist, he clarifies complex pension policies and helps members make smart choices to secure their retirement.
First off, I appreciate all that OPERS does on behalf of all current and retired OPERS covered people!! I do have a question, on the OPERS website it reads “You cannot receive more than one year of service credit for any calendar year, even if you are employed concurrently in more than one public job in an OPERS-covered position or one covered by another Ohio retirement system.” How does that work for OPERS covered employees who concurrently have a position as an OPERS covered Public representatives? Thank you, Bob
Bob,
That statement simply means that at the end of a calendar year our members can’t earn, say, 13 months of service credit related to any employment circumstance that might apply to them.
Your analysis of earnings explains a lot remembering my situation. I worked for both the County Park district and the sheriff’s office at the same time, both law enforcement. Both part time with regulated time as part time, even though both together amounted more than full time, for 20 years. In1995 I went with the sheriff’s office full time, retiring in 2010 + some time with state. Making full time at 19 3/4 years with OPERS. My retirement Plaque states 35 years with the sheriff, but my retirement is only 19 3/4 years. Now I see why the county kept my two part time jobs pay regulated for 20 years. They saved paying to you OPERS their stair.
Are school crossing guards eligible for retirement benefits?
Judi,
Typically crossing guards contribute to the School Employees Retirement System (SERS), which you would need to contact them for their retirement requirements. If the position is contributing to OPERS please send your inquiry through the online message center or contact our office at 1-800-222-7377 so we may provide account specific information.
I worked for the state 19 years and five months, then worked for a county part time for a year. How can I find out if my county time has been added to my total state years?
Linda,
Your current service credit totals can be found in your annual statement. We just updated them, and you can access your statement through your online account.
I have about 6 months of working over two summers for the city of fairlawn in summit county. How do I get an estimate to purchase this service credit.
Note: I have 14 years with Ohio SERS and so ultimately would apply my PERS total time to that retirement account at time of retiring.
To request a service purchase cost statement you will need to either contact our office by phone at 800-222-7377 or send a message through the Message Center in your OPERS online account which can be accessed on our website at http://www.opers.org.
Would my monthly pension amount be any different at 14.45 years of service instead of a full 15 years under OPERS for local government employees? What if I put in another 5.55 years (assuming my FAS did not change) would that make my monthly pension any higher?
Judi,
We always tell members that they can increase their monthly pension benefit by working longer, since years of service is one part of the benefit calculation. In the case of working an extra 5.55 years, the benefit would be significantly increased. You can use our Benefit Estimator, which you can access through your OPERS online account, to see how working longer can boost your benefit.
Hello, I’m interested in finding out how I can purchase my military time back.
I’d like to have a good understanding of the process, and understand how it will effect me in the future with regard to healthcare eligibility for myself as well as my spouse. I’d like to know the cost associated with this as well.
Thank you
Shelley,
Here’s our leaflet on service purchases. There’s a section that describes military service purchases.
If I left state service 10 years ago, and did not withdraw my funds, can I withdraw them when I am 55. I worked for SOH for 21.5 years. Thanks
Norma,
You can apply for a refund at any time after leaving an OPERS-covered positions. Here’s a link to more information about refunds.
How do I find the amount of service years I have in OPERS from past employers? Specifically, Anderson Park District in Cincinnati, OH and The University of Cincinnati?
Shannon,
Call our Member Services staff at 800-222-7377, and they can get you that information.