Why creditable service is important
Creditable service:
- is one of the three factors used to calculate the amount of your retirement benefit (the other two are your age and final salary average); and,
- determines whether you are “vested” for purposes of receiving a retirement benefit.
At the time of your retirement, we will review and verify your creditable service history.
You may earn service credit in two ways: automatically while you are contributing to the MTRS via regular payroll deductions; and, if you have previously rendered eligible service, you may be able to purchase credit for your prior employment.
Regular MA public school teaching service
This service is credited through your school’s monthly deduction reporting. Note: If you previously rendered MA public school service, and then left and took a refund of your MTRS account, you may “buy back” your prior service credit (this is known as a “refund buyback”). See Other MA public service.
Regular service is earned by all teachers and administrators who are employed on at least a half-time basis and who are contributing members of the MTRS. If you are employed on a full-time basis, you will earn one year of creditable service for each contract year you complete. For service rendered on or after 7/9/2010, service rendered on less than a full-time basis will earn an amount of regular service credit which equals their percentage of full-time employment.
For information on how part-time service is credited, see Part-time “membership” service.
Authorized leaves of absence, including sabbaticals
For paid leaves, you will be credited based on the length of your leave and amount of compensation received, as documented by you and your school district; for unpaid leaves, you may receive up to one month of credit.
You will receive creditable service depending on how you were compensated during your leave. If you received:
- full compensation, you will receive full service credit.
- partial compensation, you will receive prorated service credit.
- no compensation (an unpaid leave), you will receive either the exact number of days of your leave if it was for one month or less, or one month of service if it was for longer than one month.
Please note:
- Paid sabbaticals, regardless of when they were rendered, will always be prorated to reflect the percentage at which they were paid. For example, a sabbatical at 75 percent pay will be credited as 0.75 year of service.
- Two or more consecutive leaves of absence will be treated as one leave. For example, school districts often allow leaves of absence in one-year increments and require educators who wish to take two-year leaves to reapply after the first year of the leave. In these cases, the two-year or more leave is counted as one leave of absence, and credited as noted above.
Military leave of absence during your membership in a MA contributory retirement system
If you rendered active military service in the middle of your Massachusetts public service career, generally you may be eligible to receive credit for a maximum of four years of your time in the military. Please note that if you qualify, the cost of this service is borne by the school district or municipality; you do not have to pay for this time.
To qualify, you must have been an active member of a Massachusetts contributory retirement system immediately prior to entering military service, and, within two years of your discharge or release, you must have returned to membership service. While you were in the military, your local school district or municipality should have been making contributions to the retirement system you belonged to prior to your military service. If such contributions were not made, we will bill the municipality on your behalf for the contributions that should have been made to the retirement system.
If you rendered any of the types of service listed below, you may be eligible to purchase credit for your service. If you wish to purchase credit, you must complete and submit the appropriate service purchase applications, along with any required documentation. We will review your application, determine your eligibility to purchase your service, and send you an invoice.
Please note:
- You must be an active member at the time of application: As of July 3, 2014, to be eligible to purchase service, at the time you submit your service purchase application, you must be a member in service with the MTRS (exception: you do not need to be a member in service at the time you wish to purchase Peace Corps service). Generally, you are a “member in service” if you are: actively teaching; receiving Workers’ Compensation for total incapacity; on a sick leave; or, on an authorized unpaid leave of less than one year). Please note that if you are no longer a member in service at the time your initial invoice is due, then in order to be eligible to purchase your service, you must EITHER pay the total amount by the due date indicated, OR enter into our five-year installment plan, pay the first installment amount by the due date indicated, and make all future installment payments in full and on time. If you do not take either action after receiving your initial invoice, you will not be able to purchase your service unless and until you again become a member in service, at which time you will need to request an updated invoice from us and your purchase will be subject to additional interest at the rate then in effect.
- If your due date has passed, you must request an updated invoice: If you previously applied to purchase creditable service and received an invoice, but then decided to postpone purchasing your service until a later date, you may still be eligible to purchase your service, but at an increased cost due to interest charges.
(Request for an updated invoice for a prior service purchase) - You must make full payment before your retirement date: All service purchases must be paid for in full prior to your date of retirement; late payments will delay your date of retirement—and because retirement benefits are retroactive only to your date of retirement, late payments will cause you to lose money!
- Are you a military veteran as defined by M.G.L. Chapter 32 Section 1?
If you are a military veteran, you may apply to receive up to four years of service credit with the MTRS for this time. You may apply to make this purchase at any time during active service prior to one year after the date on which you earn 10 years of creditable service1. This 10-year total can be reached through regular work with any MA contributory retirement system or through completing another service purchase2. This deadline is absolute.Please note: If more than a year has passed since you earned 10 years of creditable service, and you have either not previously applied to purchase this time or did previously apply but never completed the service purchase, you have a one-time grace period to purchase this service which ends August 8, 2025.
National Guard or Reservists, who do not meet the M.G.L. c. 32 definition of veteran within one year of accumulating 10 years of creditable service in the MTRS, or who have not reached the maximum of four years of eligible military service purchase time (on a five years for one year basis) within one year of accumulating 10 years of MTRS service, will have additional time to make the purchase3. They will have five years from the date on which they qualify as a veteran, or the date that they qualify for the full four-year purchase, whichever date last occurs, to make payment or enter into an installment plan agreement. It is incumbent on the member to track their military service time and earning of veteran status, not the retirement board.
1 Example 1: Joe Teacher became a member of the MTRS on 9/1/2020. Provided he continues to teach full-time, he will accumulate 10 years of service by 8/31/2030. He has until 8/31/2031 to purchase his military service credit or begin an installment payment plan. As of 9/1/ 2031, he will be ineligible to purchase this time.
2 Example 2: Sara Science presently has 8 years of creditable service with the MTRS. She completes payment on 2 years of out-of-state public school service on 8/31/2027, giving her a total of 10 years of creditable service. Thus, she has until 8/31/2028 to purchase her military service credit or begin an installment payment plan. As of 9/1/ 2028, she will be ineligible to purchase this time.
3 Example 3: Paula Pencil is an Army Reservist who will reach 10 years of creditable service as of 6/30/2030. She accrues enough active military duty to meet the c. 32 definition of a military veteran on 12/31/2030. She will have until 12/31/2035 purchase her military service credit or begin an installment payment plan. As of 1/1/ 2036, she will be ineligible to purchase this time.
We strongly encourage you to start the service purchase process early because it often takes some time for you and your prior employers to gather documentation of your past service.
| Types of purchasable service and application forms | Maximum time creditable | Applicable interest rate |
|---|---|---|
Other MA public service with the MTRS or a MA town, city, state, county or regional authority, during which…
| 20 years No maximum | As of January 1, 2022, actuarial interest (currently, 7.0%)1 |
| Substitute, temporary or part-time public school service in Massachusetts | 20 years | |
| Out-of-state public school teaching service 2, 4 | 10 years | |
| Nonpublic, private school teaching service BEFORE 1973 2, 3, 4 | 10 years | |
| Overseas dependent school teaching service 2, 4 | 5 years | |
| Vocational education work experience (for Chapter 74 certified educators) | 3 years | Buyback interest for all members (currently, 3.5%) |
| Nonpublic school teaching service in a MA publicly-funded school 3, 4 | 10 years | |
| Peace Corps service | 3 years | |
| Pre-1975 maternity leave (except in rare situations, you must have purchased this service by 12/31/2001; however, if you believe you may qualify, please contact our office) | 4 years | |
| Active military service in U.S. armed forces, MA National Guard or Active Reserves, other than a military leave of absence during membership in a MA contributory retirement system (Chapter 71 military service application) | Generally 4 years | No interest charged on first invoice, first due date; thereafter, buyback interest |
- EXCEPTION: If you established membership in a Massachusetts public retirement system on or after April 2, 2012, and you had previously been a member of a Massachusetts public retirement system and taken a refund of your account, you will have one year from the date that you re-entered public service to apply and pay for your service purchase at the lower “buyback” interest rate (currently, 3.5%). After your first year of re-entry to membership, you will be subject to actuarial interest.
- You may purchase a combined total maximum of ten years of out-of-state service (i.e., service rendered: in an out-of-state public school; before 1973 in an out-of-state nonpublic school; or, in an overseas dependent school).
- You may purchase a combined total maximum of ten years of nonpublic school service.
- In order to receive credit for your out-of-state and/or nonpublic school purchases toward your retirement benefit calculation, you must—at the time of retirement—also have at least as many years of “matching” Massachusetts membership service; you may not count your same years of “matching” Massachusetts membership service toward both the out-of-state and nonpublic school “matching” service requirements.
How can I find out how much creditable service I have?
You can:
- Estimate your total based on your employment history: Because you best know what types of service you have rendered, and when, you can make a rough estimate of your creditable service. To do this, see both Service automatically credited by MTRS and Types of purchasable service and application forms, above, then add up the number of years of each type of service you have rendered.
- Request a creditable service estimate: Complete a Request for creditable service estimate form if you are retiring within the next two years or have a complicated employment history and need to know how much creditable service you have to plan your retirement. Due to the time required to research your service history and the volume of requests we receive; it may take up to 14 months for us to process your estimate.
Note: Please remember that you don’t “need” an estimate to apply for retirement. If you have a general sense of how much creditable service you have, it is not necessary for you to request an estimate. When we process your completed retirement application, we will determine your exact amount of creditable service and you will be notified of the total by way of your Notice of Estimated Retirement Benefit. You will then have an opportunity to review that form before your benefit is finalized.Need help remembering previously purchased or transferred service? If you have previously purchased service, or transferred credit into the MTRS, our representative can verify dates and service credit for you. We can also help you identify periods of service that you may need to buy back, based on our records.
NOTE: To avoid any misunderstandings, our representatives are not allowed to provide you with an estimate of your creditable service over the phone.
Is all creditable service equal?
To the extent that you have, for example, two years of Massachusetts teaching service and two years of out-of-state service that you have purchased, yes—each counts as two years of creditable service. However, creditable service is also categorized as either membership or nonmembership service:
- Membership service is that which required your membership in the MTRS and during which you contributed to the MTRS via payroll deduction
- Nonmembership service is that which did not require your membership in the MTRS, but is eligible for purchase. Types of nonmembership service are: substitute teaching service in a Massachusetts public school; out-of-state public school teaching; nonpublic school teaching; vocational work experience; other Massachusetts public employment; military service; Peace Corps service; pre-1975 maternity leave; and, teaching service in an overseas school for dependents sponsored by the U.S. Department of Defense.
How much does it cost to purchase past service?
Generally, the cost of purchasing past service is based on what you would have paid in contributions during that period (plus interest to date) or what you actually paid and withdrew (plus interest to date). Please refer to the information on each type of creditable service to learn how the cost is calculated for that specific type, and be aware of how the type of interest charged is determined, including, if applicable, the limited timeframe for qualifying for the lower, buyback interest rate.
Is it always a good idea to purchase past creditable service?
Often, but not always—depending on how much creditable service you already have, it may or may not make financial sense for you to purchase outstanding service. If, based on your established creditable service and age, you:
- are not at or near the maximum retirement allowance—80 percent of the allowable salary average—then, depending on how much outstanding service you have, purchasing it may result in a meaningful increase in your retirement allowance. While the present cost of purchasing the service may seem substantial, the difference in your retirement allowance may allow you to recoup the expense in a short period of time and pay off in the long run.
- are already eligible to receive the maximum retirement allowance (80 percent of the allowable salary average) by reason of your established creditable service and age, then purchasing outstanding service will be an expense that will not result in an increase in your retirement allowance.
When can I purchase creditable service?
You can pay in full for any creditable service purchases before the effective date of your retirement. If you wish to purchase creditable service you must apply while a member in service (exception: prior refunded service from a MA Contributory Retirement System and Peace Corps Service). Generally, you are a “member in service” if you are: actively teaching; receiving Workers’ Compensation for total incapacity; on a sick leave; on a paid leave; or on an authorized unpaid leave of less than one year. Because an interest charge is added to the amount due, the cost of purchasing creditable service is increased monthly.
How do I purchase creditable service?
While the specifics differ depending on what type of service you wish to purchase, the basic steps are as follows:
Step 1: You obtain the service purchase application form, if applicable (please see types of purchasable service).
Step 2: You complete and submit the form, supplying us with specific information about the type of service, where and when you rendered it, and what you received as compensation.
Step 3: We review your form, determine how much service you are eligible to purchase as well as your cost, and send you an invoice.
Step 4: Depending on your particular situation, you may then pay the total in full, or, if eligible, in payments over time on our installment plan. Or—except if you are purchasing vocational work experience—you may decide to postpone purchasing the service until a later date, if at all. You are under no obligation to purchase service you have been billed for; however, if you choose to defer your purchase, the cost will increase because of interest charges. Be aware that, depending on the type of service you wish to purchase, deferring your purchase to a later date may result in a significant increase in the interest you must pay because of added interest changes over time, or an increase in the type of interest your purchase is subject to, or both (see Applicable interest in the chart for the different types of purchasable service). [Note: You may be able to pay for your service purchase with pre-tax dollars. Please see Purchasing creditable service with a direct transfer or rollover.]
I am participating in RetirementPlus. What types of creditable service count toward the enhanced benefit eligibility requirement of “at least 20 years of membership service with the MTRS (or Boston Retirement System) as a teacher?”
In addition to your regular service during which you contribute to the MTRS via regular payroll deductions, the following two types of purchased service count toward the 20-year “teaching service” requirement:
- repayment of a refund from the MTRS or the Boston Retirement System, and
- if you began service with an MTRS employer on a temporary or part-time basis, the purchase of your mandatory six-month waiting period.
All other types of service do not count toward the 20-year “teaching service” requirement. They do count, however, toward the 30-year creditable service requirement.
Is service rendered as a “consultant” in a school district, or as an “03” employee of the Commonwealth of Massachusetts, eligible for purchase?
No—this type of service is ineligible for purchase by MTRS members.