Making a service purchase allows you to increase your IPERS monthly retirement benefit amount. At retirement, IPERS allows you to buy additional service time that you have not earned. To qualify, you must have an Application for IPERS Monthly Retirement Benefits on file with IPERS and meet the years-of-service requirement for vesting.
When purchasing service, you make a payment to IPERS to receive additional service credits. These additional credits will be used to calculate your benefit. Increasing your amount of service credits can increase your retirement benefits; however, it’s important to determine whether the added benefits you will receive from a service purchase outweigh the cost of making the service purchase.
Before retirement, use the Application for Service Purchase to request a cost estimate from IPERS. This will provide you with an estimate of how much money you will need to make your purchase at retirement. Cost estimates are subject to change. You can request an updated estimate anytime.
Some IPERS members may qualify for free service credit for certain times when they were not working in IPERS-covered employment. There may be a deadline for requesting free service credit in certain cases. For more information, explore our earned service credits page.
Why purchase service?
One factor in the benefit formula is the amount of service credit you have earned. Purchasing IPERS service credit can increase your retirement benefits or eliminate an early retirement penalty.
Various types of service purchases
Service purchases are divided into two broad classifications: qualified service purchases and nonqualified service purchases. Qualified service purchases require you to have less IPERS service credit and have fewer limits on how much you can buy than nonqualified service purchases.
Qualified service purchases
IPERS buy-up credit conversion
You may convert Regular Membership service credits to Special Service credits if you have at least one quarter of covered wages in a Special Service membership group on file.
Leave of absence/workers’ compensation buy-in
You can purchase IPERS service to make up for a leave of absence, a leave that qualified for FMLA, or a leave that qualified for workers’ compensation benefits and began on or after July 1, 1998. Up to one year of service credit can be purchased for each leave.
Buy-Ins for members of the Iowa General Assembly and part-time county attorneys
If you served in the Iowa Legislature and elected out of IPERS coverage or as a part-time county attorney and were not IPERS-covered, you may buy this service.
IPERS buy-back because of disability
If you were a vested IPERS member who left covered employment because of an illness or injury, received an IPERS refund and began receiving Social Security disability or Railroad Retirement disability benefits for that disability, you may be eligible to purchase service credit for the period covered by the refund.
IPERS buy-back
If you took a refund for service earned after July 4, 1953, you may purchase the refunded service credit.
IPERS buy-back with cost credit
Effective January 1, 2009, you may be able to receive a credit against the actuarial cost of the buy-back if you took a refund for service earned after July 4, 1953, received the refund before July 1, 1998, were vested in IPERS when you received the refund, and returned to full-time employment before July 1, 1998, with mandatory IPERS coverage.
Veteran’s credit buy-in
You may purchase IPERS service credit for active duty in the Armed Forces of the United States if you are not receiving and are not eligible to receive military disability benefits in place of military retirement benefits. You may purchase service credit for all your active duty if you receive retirement pay for nonregular military service (for example, service in the military reserves, National Guard or disability pay from the U.S. Department of Veterans Affairs that is not paid in place of military retirement benefits).
If you are eligible for a regular (active duty) military pension, your service purchase will be limited to 20 quarters maximum.
Qualified or nonqualified service purchases
The following types meet requirements for a qualified service purchase only if you are not eligible for a retirement benefit for the period of employment related to the purchase. If you are eligible for a retirement benefit based on the employment, you may still purchase service credit, but it will be a nonqualified service purchase. Limits on buying nonqualified service credit are explained below.
Other U.S. public employment buy-in
You may purchase IPERS service credit for other U.S. public employment. This employment can be as a public employee in another state or the federal government comparable to IPERS-covered employment or public employment within Iowa that was IPERS-covered.
Buy-ins for members with optional coverage
You can purchase service credit for employment with optional IPERS coverage if you were employed before January 1, 1999, in a position eligible for optional IPERS coverage and elected out of coverage for that employment.
Nonqualified service purchases
You must have at least 20 quarters of covered wages on file with IPERS to buy nonqualified service credit. You may purchase up to 20 quarters of nonqualified service credit.
Nonqualified service is:
- Service that is not considered a qualified service purchase as described above.
- Periods of time in which you were not working (known as “air time”).
- Service in public employment (excluding certain military service) for which you remain eligible for retirement benefits.