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Purchasing TRSL Service Credit
Active TRSL members may purchase credit for the types of service discussed below to increase the service credit used to calculate their retirement benefits.
To calculate the cost of these purchases, TRSL must first receive the appropriate cost application. A list of the various applications can be found below. These applications include official certification of the member's current salary, including PIP salary and any supplemental pay, and employer certification of service to be purchased, including salary for the period to be purchased. TRSL may also request employment history certification from each of your current and/or former TRSL employers.
For all purchases, except refunded service credit and USERRA (see below) service credit, the member making application will be required to pay a nonrefundable calculation fee of $150 to TRSL's actuary. This fee may be paid by personal check, cashier's check, certified check, or money order, made payable to S.J. Actuarial Associates and should accompany the application.
Members may not purchase credit for any period for which they already have TRSL service credit.
No more than one year of TRSL credit may be obtained for any one fiscal year, and all years must be certified by employers before a cost can be calculated.
Members should purchase any service credit well in advance of applying for retirement or DROP. It can take several months to complete the purchase process.
Payments for purchases of service credit must be made in one lump sum or by a rollover.
Refunded service credit
Some TRSL members withdraw their retirement contributions when they become ineligible for further TRSL membership, for example, when they stop teaching or move out-of-state.
By taking a refund of contributions, these former members lose the service credit they earned by making those contributions. However, if they later return to TRSL service, they may restore that service credit by paying back the refund they received plus interest.
The cost to restore refunded service is computed using the amount of contributions refunded plus interest at the board-approved actuarial rate compounded daily from the date of refund until payment is made. The current interest rate is 8.25 percent but is subject to change each year.
To buy back refunded service, a member must complete an Application for Purchase of Refunded Service (Form 9D). This is an in-house cost calculation, so no actuary calculation fee is required for purchases of refunded service.
After the application is reviewed, the member will receive an invoice giving the amount necessary to purchase the refunded service. Please allow a minimum of six weeks to receive an invoice.
Is it a good idea to purchase refunded service credit?
The following example shows (1) the difference the purchase can make in a retirement benefit and (2) the period of retirement needed to recover the cost of purchase.
Let's say a member is age 59, has 25 years of service credit, an average compensation of $35,000, and wishes to purchase 5 years of refunded credit. This member has received an invoice totaling $14,875 ($2,975 per year) to buy this time.
25 years x 2.5% x $35,000 = $21,875
30 years x 2.5% x $35,000 = $26,250
$26,250 - $21,875 = $4,375 (approximate increase in annual retirement benefit from purchasing 5 years of refunded time)
$14,875 /4,375 = 3.4-year recovery period
After 3.4 years of retirement, this member would recover the cost of purchasing 5 years of refunded service credit.
Sabbatical leave
A member is allowed to contribute on the full rate of pay while on sabbatical leave. If contributions are made on less than the full rate of pay, the member is credited with less than a full year of service credit for benefit calculation, but does receive a full year of credit for retirement eligibility purposes.
To gain a full year for the purpose of benefit calculation, the additional service credit may be purchased. An Application for Purchase of In-state Service (Form 9) must be completed and submitted with the calculation fee.
Legal leaves of absence
An active, contributing member may purchase credit for legal leaves of absence from a TRSL employer, such as maternity leave and leave without pay.
A member must have 5 years of creditable service for each year of leave to be purchased, or 2.5 years of service for each half year of leave.
No more than 2 consecutive years of leave may be purchased. An Application for Purchase of In-state Service (Form 9) must be completed and submitted with the calculation fee.
Involuntary furlough or strike
A member who is involuntarily furloughed without pay due to the temporary closure of his or her employer can purchase additional salary credit.
When no compensation is paid and the employer does not place the employee on official leave without pay, the employee is entitled to purchase that salary credit, and the cost may be paid by either the employer or employee or both. The member must be an active member of TRSL immediately before and after the period to be purchased. An Application for Purchase of In-state Service (Form 9) must be completed and submitted with the calculation fee.
Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA)
Retirement credit may be purchased by a member of the uniformed services of the United States who left employment or who leaves employment in order to perform military service. The member must meet certain eligibility criteria for purchasing the military service credit. Those criteria are honorable discharge and timely return to employment after release from military service.
TRSL must receive an Application for Purchase of Military Service (Form 9B) and the following:
- Copy of certification of release or discharge from active duty (Form DD-214).
- Certification of salary the member would have earned if not on leave. (Provide monthly breakdown and annual rate, and include any pay increase that may have been received.)
- Employee contributions that would have been payable if the member had continued in service. (Paid by the employee.)
- Employer contributions that would have been paid by the employer if the member had continued in service. (Paid by the employer within 30 days after the employee payment.)
- All payments must be made within an interval of three times the period of uniformed service, not to exceed 5 years.
No actuary calculation fee is required for service that qualifies under USERRA.
Military service credit not under USERRA
Service credit may not be purchased for any military service for which the member is drawing a regular military retirement benefit based on age and service. This restriction does not apply to members who are drawing a disability benefit based on 25-percent-or-less disability received as a result of regular military service. A member may purchase service credit for military service if he or she is drawing a nonregular military pension (national guard, coast guard, reserves, etc.) from that service
All purchases of non-USERRA military service are at actuarial cost. (See below for explanation of actuarial cost .)
A member may purchase the same military service in more than one Louisiana public retirement system, as long as he or she is not receiving a benefit from the first system when he or she purchases the same military service in the second system.
A member may purchase up to four years of credit for military service. However, this credit cannot be used to meet eligibility requirements for survivor benefits, disability retirement, or for retirement with 5 years at age 60, or 20 years at any age.
TRSL must receive an Application for Purchase of Military Service (Form 9B); a copy of the Form DD-214 showing dates of service and honorable discharge; official certification from the current employer of the member's current salary, including PIP salary and any supplemental pay; and the calculation fee.
National guard, coast guard, and reserve forces
Retirement credit may also be purchased for time served with the state national guard, coast guard, and reserve forces. To purchase this service, the member must pay the actuarial cost for receiving such credit under the provisions of LSA-R.S. 11:158, unless it qualifies under USERRA. This is a lump-sum payment. The employee must submit an official copy of the employee's retirement points as maintained by their respective military branch. The member may purchase one day of retirement credit for each point, not to exceed 4 years. The member must pay the system actuary to calculate the cost of the purchase.
This service can only be purchased provided the member does not have a full year of service credit in TRSL for the fiscal year he or she served.
TRSL must receive an Application for Purchase of Military Service (Form 9B); a copy of the Form DD-214 showing dates of service and honorable discharge, if applicable; and official certification from the current employer of the member's current salary, including PIP salary and any supplemental pay; and the calculation fee.
Payment for military service must be made in one lump sum.
Out-of-state public school, in-state private school, or U.S. military base teaching service
Any TRSL member may purchase the following kinds of service by paying the actuarial cost:
Actuarial cost or contributions plus interest
To purchase additional service credit (except for refunded service credit and USERRA service credit), the greater of either the actuarial cost or the employee and employer contributions plus interest at the assumed actuarial valuation rate must be paid. The actuarial cost is computed by the system's actuary and completely offsets TRSL's accrued liability in allowing the credit.
The member making application will be required to pay a nonrefundable fee of $150 to TRSL's actuary. This fee may be paid by personal check, cashier's check, certified check, or money order, made payable to S.J. Actuarial Associates and should accompany the application.
Other service credit eligible for purchase
Members may purchase substitute teaching time in Louisiana public schools for which they did not contribute to TRSL, or any period of Louisiana public employment (city, parish, or state), excluding federal employment, for which they did not contribute to TRSL. An Application for Purchase of In-state Service (Form 9) must be completed and submitted with the calculation fee.
Service as an elected official is not eligible for purchase except, in some cases, for school board members.
Rollovers (Form 9R)
Payment for purchases of service credit may be made by a rollover of funds from an eligible plan under one of the following sections of the Internal Revenue Code: 401(a), 401(k), 403(a), 403(b), 408(a), 408(b), or 457(b). A Rollover/Trustee-to-Trustee Transfer Acceptance (Form 9R) must accompany any such funds used to purchase service.
Transfer or reciprocal recognition of service credit
Members of Louisiana state, parochial, or municipal retirement systems, who have at least six months of service in the system to which they are currently contributing, may repay refunded contributions plus compounded interest at the board-approved actuarial rate to a system from which they previously received a refund in order to reestablish credit for purposes of an actuarial transfer to, or reciprocal recognition of service credit with, their current system. Either an Application for Purchase of Refunded Service to Reciprocate (Form 8BR) or an Application for Purchase of Refunded Service to Transfer (Form 8BT) must be completed and submitted. No actuary calculation fee is required for purchases of refunded service credit to transfer or reciprocate.
A member of any Louisiana state or statewide retirement system may also transfer service credit from one Louisiana system to another Louisiana system. The member must have a minimum of 6 months of service credit with the retirement system to which they are currently contributing in order to transfer any service credit in another Louisiana public retirement system.
If the amount being transferred is less than the accrued liability of the receiving system, the member must pay the difference or accept pro rata credit based on the funds transferred and may choose to purchase only a portion of the credit remaining. Any credit not purchased at the time of transfer can never be purchased later.
An Application for Transfer of Creditable Service (Form 8A) must be completed and submitted with the calculation fee.
See the TRSL booklet Purchases and Transfers of Service Credit for more information.
Member's cost calculation
Once all necessary information has been submitted for any purchase (except refunded service credit and USERRA service credit), TRSL will forward it to the actuary, whose cost calculation will be sent to the member. When the member receives the invoice, he or she is under no obligation to complete the purchase. However, action to complete the purchase must be taken within 45 days. After that time, additional interest accrues. After 90 days, the member must reapply and pay an additional calculation fee.
Applications for purchasing service
Applications to purchase service credit must be completed in their entirety, or they will be returned. This could cause a delay in the cost calculation and result in additional interest charges. A list of these forms can be found below. These forms are available from employers, TRSL, or on this website at the following links:
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