Certain periods of employment are used to determine eligibility for and the amount of OPERS benefits. These types of service are added together to determine service credit.

Prior Service

Prior Service is a period of a member’s employment with an eligible employer before that employer’s entry date into this System. In most cases, prior service is granted free of charge to all eligible members only if their employer began participating in OPERS on or before January 1, 1975. Proof of such service must be verified in writing by the Retirement Coordinator of each participating employer from payroll and personnel records on file in their office. Prior service may be purchased at actuarial cost by a member for employment with a participating employer that occurred prior to the date the agency joined OPERS if the agency joined after January 1, 1975. (See Purchasing Service).

Bonus Years

Bonus Years of Participating Service For Employee Contributions

Employee contributions required by the System and which were paid by the member prior to June 30, 1977 will entitle the member to additional years of participating service in accordance with the following schedule if the funds are not withdrawn upon termination of employment prior to retirement.
More than $1 up to $500 1 yr. participating service
More than $500 up to $1,000 2 yrs. participating service
More than $1000 up to $1,500 3 yrs. participating service
More than $1500 up to $2,000 4 yrs. participating service
More than $2,000 5 yrs. participating service

Purchasing Services

Purchase Service From Other State Retirement Systems
A member may purchase service credit in OPERS for years of credited service accumulated by the member while a member of the:

  • Oklahoma Firefighters Retirement System
  • Oklahoma Police Pension and Retirement System
  • Uniform Retirement System for Justices and Judges
  • Oklahoma Law Enforcement Retirement System
  • Oklahoma Teachers’ Retirement System

 
If the member is not receiving or eligible to receive retirement credit or benefits for service in any other public retirement system. The cost to purchase such service shall be the actuarial cost to fund the member’s projected benefits with the additional service credit.

 
A member who wishes to purchase such service must submit to OPERS written documentation from one of the systems listed above. The documentation must include dates of membership and service, salary for each year of membership broken down by fiscal year, and a statement that he or she is no longer eligible for benefits from that system. No other documentation will be accepted.

Purchase of Prior Service
Members who were employed by an agency which entered this System after January 1, 1975, are not eligible for free prior service credit for their employment with that agency prior to its entry into OPERS. However, members can now purchase prior service credit for their employment with such an agency from January 1, 1975, until the agency’s entry into this System. The cost for the purchase will be the actuarial cost. The member and the Retirement Coordinator for the agency must complete and submit Form 515-144 entitled Application for Purchase of Prior Service to OPERS. The member will be contacted directly by OPERS about the cost.
Purchasing Incentive Credit

Active, participating members of this System may purchase no more than two years of age and/or participating service combined to accelerate their retirement eligibility date and/or increase benefits. The cost of purchasing such age or service will be the actuarially determined cost of the projected incremental increase in benefits as a result of the additional age and/or service.

To purchase incentive age or service, a member must:

1. Have reached or is within two years of reaching normal retirement eligibility;
2. Have reached or is within two years of reaching early retirement eligibility.

Members must have at least four years of the required six years of full-time-equivalent employment in order to be eligible for this purchase and must accrue six years of full time equivalent employment prior to retirement.

Incentive credit may not be purchased to attain eligibility for Disability Benefits.

The amount a member will pay to purchase incentive credit is the actuarial cost. For a more detailed explanation of actuarial cost, see below.

Purchase of OESC Service
A member may purchase OPERS service credit for any years of employment the member had with the Oklahoma Employment Security Commission (OESC) if the member is neither receiving nor eligible to receive service credit.

A member who is interested in purchasing such employment must submit written verification of the dates of employment and the salary earned during each fiscal year. The verification must be obtained from the Retirement Coordinator of OESC and submitted to OPERS. OPERS will notify the member of the cost to buy the service credit.

Purchase of Elected Service
A member who is currently a nonelected member may purchase OPERS service credit for previous service as an elected official if the member is not receiving or eligible to receive retirement credit for said service with any other public retirement system. The cost to purchase such service shall be the actuarial cost to fund the member’s projected benefits with the additional service credit. Interested members should contact OPERS in writing and state the elected official rate they wish to pay. The rate chosen may determine the benefits paid for each year of elected service.
Actuarial Purchase Price

In the past, purchases of service credit generally have been related to payment of contributions plus interest. This payment did not truly represent the cost to OPERS for providing benefits for the additional service. The Legislature recognized this as an increased liability to OPERS, and effective July 1, 1990, based most purchases and payments on the actuarial cost of the projected incremental benefits to be purchased. The actuarial purchase price is designed to represent a discounted present value of the projected incremental benefit based upon the member’s age at the time of the purchase. A major factor in the determination of the incremental benefit is the difference between the amount of the future benefit that a member would receive without the purchased credit and the amount of the future benefit after purchase, computed as of the earliest age that particular member would be eligible to retire with full benefits.

Actuarial cost more closely represents the actual cost of the additional credit to OPERS, and as such assists in maintaining a financially sound retirement plan for all of us. Actuarial cost has no relationship to contributions that would have been paid. The purchase price takes into account the past loss of the use of those funds for investment purposes and the length of time the funds will be available for investment in the future before OPERS begins to pay benefits to that member. As a general rule, the earlier a purchase is made, the less the cost will be, and the actuarial cost for a younger member with fewer years of service credit will not be as high as for a member who is nearer to retirement, since OPERS will have investment use of those funds for a greater amount of time before being required to pay benefits.

Installment Payment Plan

Certain categories of purchases may be made through an installment payment plan. The categories are as follows:

  • All purchases of service at the actuarial purchase price including, but not limited to, eligible service from another State retirement system, military service or incentive credit.
  • Current members, who as former members, withdrew their accumulated contributions and now wish to repay the amount of the withdrawal to reinstate service credit can repay the withdrawal either in one lump-sum payment or through the installment payment plan.

Installment plan payments must be made only through payroll deduction for a maximum time period of 60 months and will include interest at a current annual percentage rate of 7.5%. The minimum monthly payment is $25. Failure to complete all payments may result in the loss of eligibility for the service credit. For the rules governing installment payment plan purchases, see your Retirement Coordinator.

Termination Credit

All inquiries about the purchase of service due to a reduction-in-force will only be entertained after the member’s participating employer has officially notified OPERS of the those employees subject to a reduction-in-force. OPERS will then communicate detailed instructions about the purchase of termination credit to these members affected by a reduction-in-force. A general description of the purchase of termination credit is given below.

Purchase of Termination Credit

The purchase of termination credit will allow an eligible OPERS member to preserve the same normal retirement date as he or she would have had if the member’s position had not been terminated by a reduction-in-force. In other words, termination credit allows a member to “constructively” participate as if still employed by a participating OPERS employer until reaching eligibility for normal retirement either by age 62 or 80/90 points. The purchase of termination credit represents the amount of service that would have accrued through the member’s normal retirement date. The cost to purchase termination credit will be an amount equal to the employee and employer contributions that would have been paid to OPERS through the member’s normal retirement date. Termination credit cannot be purchased in conjunction with incentive credit.

Participating Service

Participating service is a member’s period of employment and participation in OPERS after the entry date of their employer into this System. Participating service credit will be granted for the period of actual employment for which required employee and employer contributions have been paid in full, either by payroll deductions or by the employer on behalf of the member.

An approved leave of absence of 2 years or less shall not constitute a break in service, but it shall not be counted as credited service. An employee who is not receiving pay and for whom contributions are not being paid is not accruing participating service. Members do not accrue service credit while receiving Workers’ Compensation payments. All part-time employment or periods of leave without pay are prorated in relation to full-time employment. For service prior to July 1, 1979, such members will receive a full month’s credit for each calendar month in which he or she received salary and for which retirement contributions were paid on that salary, regardless of the number of hours worked in that calendar month. No deductions in service credit or salary are made for involuntary furloughs as provided for by OAC 530:10-15-48 or as otherwise approved by the Office of Personnel Management.

Unused Sick Leave

A member who retires or terminates employment and elects a vested benefit is entitled to add unused sick leave to all the other service credit the member has accrued. One hundred sixty hours of unused sick leave qualifies as one month of participating service credit. A maximum of 6 months of unused sick leave can be added to a member’s credit.
Hours of Unused Sick Leave Months of Service Credit
0 – 159 0
160 – 319 1
320 – 479 2
480 – 639 3
640 – 799 4
800 – 959 5
960 + 6
If the addition of the member’s unused sick leave causes the total credited service to equal or exceed a fractional year of 6 months, service is rounded up to the next year and the member gains a year of service credit.*
* Note: HB 2321 eliminates rounding for new members after 11/1/2012.