Military Service

Service in the military can impact your retirement, death and disability benefits. By law, you have certain rights. When you are called to active duty or return from military service, contact IPERS to learn about your options for obtaining or purchasing service credits. (You should also contact your employer.) In fact, you may be eligible for free service under some circumstances. The benefits described here apply solely to your IPERS benefits.

Returning to work with your IPERS-covered employer

If you serve in the military, you have certain rights under the law. The Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) helps to minimize the disruption that can occur in your life by providing you with certain re-employment rights when you leave from and return to covered employment following service in the military. 

To be eligible for the rights and other benefits covered under USERRA, you must receive an honorable discharge from military service. Under USERRA, reemployment and reinstatement deadlines are based on your length of military service. Contact your employer for more information about when to apply for reemployment under USERRA guidelines.

Maximizing your IPERS benefit

The amount of your IPERS service credits affects the amount of your IPERS benefits. You may be eligible to receive free service credit or purchase service credits for active duty service. You may also make up contributions.

Free service credit and deemed wages

If you have served in the Armed Forces, you may be eligible for free IPERS service credit for the period of your military service. To be eligible for free service credit, you must:

• Be working in IPERS-covered employment immediately before entering the Armed Forces.
• Return to IPERS-covered employment within one year after discharge.
  • If you are unable to return to IPERS-covered employment because of an active duty injury or disease sustained in a combat zone, hazardous duty area, or during a contingency operation that results in death, free service credit will be granted for your period of military leave. In order to receive this free service credit, the death must occur within two years after you suffer the injury or disease.

Use the Application for Free Military Credit to request the free credit. This form must be completed by your employer.

If you do not return to IPERS-covered employment within one year after being released from active duty, you can still purchase service credit for your period of military service. 

If you qualify for free service credit, your account will also be credited with the wages you would have earned had you not entered the Armed Forces. These deemed wages may be considered in determining your average salary.

Making up contributions

If you leave from and return to IPERS-covered employment, you may, but are not required to, make up the contributions you would have paid while on active duty. Making up contributions may help you if you want to:

• Take a refund.
• Maximize your death benefits. 

If you decide to make up contributions, you and your employer must fill out and submit the Application for Military Leave Contributions. The form includes an agreement that you will make the required contributions within the required period. After you sign the agreement, it cannot be revoked. Your employer will then take a pretax deduction from your paycheck and send it to IPERS. Your employer will pay IPERS the employer’s share. 

You have up to three times the period of your military service (up to a maximum of five years) from the date of your re-employment to apply for and pay contributions to IPERS. For example, if your military service was 12 months, you have 36 months to apply for and make up the contributions.

Purchasing service for active duty

If you served in the U.S. Armed Forces, but are not eligible for free service credit, you can still purchase additional service called Veteran’s Credit Buy-In when you are ready to start receiving IPERS retirement benefits. You can purchase IPERS service for periods of active duty in the U.S. Armed Forces if you meet all of the following criteria:

• Are vested by service.
• Have an Application for IPERS Monthly Retirement Benefits on file with IPERS.
• Are not eligible to receive military retirement or disability pay in lieu of military retirement, unless the retirement pay is for nonregular service. Examples include service in the military reserve or National Guard. 

Use the Application for Service Purchase to request a cost quote for this purchase. You will need to provide a copy of DD Form 214, Certificate of Release or Discharge From Active Duty (or other acceptable military records), to verify the dates of your active duty. You can obtain a copy of a DD Form 214 by contacting your military personnel office or veterans’ representative. Disability pay received from the U.S. Department of Veterans Affairs that is not payable in lieu of retirement will not affect your ability to purchase service credit. 

To see how military service credits can boost your monthly retirement benefit or death benefit, look at the example in the table below.

Jeff is a member of the National Guard and was called up to active duty while working for an IPERS-covered employer. During his tour of active duty, wages were not reported on his behalf for five quarters. Upon his return to IPERS-covered employment, Jeff contacted IPERS to inquire about his free military credit and the possibility of making up contributions. After completing the application for free military credit and providing acceptable proof of active-duty military service, Jeff’s account is credited with the five quarters of service at no cost to him. Let’s look at how the five quarters of free military credit and making up contributions for five quarters affect his IPERS benefits.