JB Pritzker, Governor
NOTE: All optional credit must be purchased prior to retirement.
There are several different types of optional service.
• A qualifying period is the time a state employee may have served before becoming a SERS contributing member. This includes the 12 months of employment before becoming a member prior to January 1, 1972, or 6 months for a person entering state service from January 1, 1984 through November 30, 2010.
• Short periods are intermittent periods of service not exceeding the qualifying period time when no retirement deductions were taken.
• Leaves of absence are periods of less than one year spent on an authorized leave of absence, provided the period of leave began on or after January 1, 1982. A member may also establish service credit for more than one authorized leave of absence. The total period of service established can then exceed one year.
• Repayment of a refund if you terminated state employment, and received a refund of your contributions, and were later rehired, you may reestablish your credited service by repaying the refund with interest after completing at least two additional years of credited service with SERS or any of the Reciprocal Retirement Systems that participate in the Retirement Systems' Reciprocal Act. (click here for list of Reciprocal Systems)
A person who has met the two year requirement may also purchase a portion of the refund. If part of the refund is repaid, the member may repay additional whole months of the remaining portion if they choose.
• Military service includes active duty in the United States Army, Navy, Air Force, Marines, or Coast Guard, or any of the women's auxiliaries.
Interest is calculated from the date the employee last became a member of SERS or November 19, 1991, whichever is later.
SERS allows members to tax-defer optional service credit purchases through payroll deduction. This lets members defer taxation until they retire. The tax-deferred withholding is made through an irrevocable payroll agreement for the total service credit purchase amount. SERS members may also transfer funds from their Deferred Compensation account to purchase permissive service credit or repay a refund.
Service credit is granted only after a refund or service purchase is paid in full. If the member dies, a partial service credit may be granted based on contributions and interest paid on the date of death.
In the case of retirement, termination or absences of more than one year, the member can choose to make an after-tax lump sum payment for the balance due, or the contributed amount can be refunded with taxes withheld and reported as income in that calender year. Any after-tax lump sum payment must be made no later than 30 days after the member has been notified by SERS of the amount due.
Most employees will receive a lump sum payment at retirement for unused sick days earned between January 1, 1984 and December 31, 1997, and all vacation days. This lump sum payment can be used to purchase any tax-deferred optional service credit. This election must be completed before the member leaves state service.
You may rollover money from another qualified pension plan, an Individual Retirement Account (IRA), 403b or 457 containing money from a qualified total distribution to purchase optional service credit or repay a refund. To do so, you must obtain and complete a Transfer/Rollover Certification from the Service & Refunds Division.