The longer you work in IPERS-covered employment, the larger your retirement benefit. IPERS calculates your benefit using a multiplier based on your length of IPERS-covered employment, called “service,” and the average of your highest-earning years.
Why Purchase Service?
Depending on your circumstance, purchasing service can:
- Increase your monthly benefit: As your amount of service increases, so does your benefit.
- Eliminate an early retirement reduction: Purchasing service can help you acquire more years of service possibly eliminating or reducing the early retirement reduction.
- Increase your Death Benefit: Depending on the benefit payment option you choose at retirement, your beneficiary(ies) may receive a larger benefit in the event of your death.
Service Purchase Requirements and Types
Only IPERS members who are vested by years of service may purchase service. Regular IPERS members become vested after seven years of service. Protection Occupation and Sheriff/Deputy Sheriff members become vested after four years. Additionally, each type of service purchase includes specific eligibility requirements. If you qualify for multiple service purchase options, you must purchase in this order:
# 1 Buy-Up
IPERS Buy-Up Credit Conversion
If you change jobs and move from IPERS Regular membership to Protection Occupation or Sheriffs/Deputy Sheriffs membership, you may convert your service if you have earned at least one quarter of covered wages.
#2 Buy-Back With Cost Credit
IPERS Buy-Back With Cost Credit
The cost of your service purchase may be reduced if, before July 1, 1998, you were vested in IPERS, received a refund and returned to employment that required IPERS coverage.
If you received a refund for IPERS service, you may buy back the service for the refunded time.
IPERS Buy-Back Because of Disability
If you are a vested IPERS member who left IPERS-covered employment because of a disability, received an IPERS refund, and received Social Security or Railroad Retirement disability benefits, you may be eligible to purchase service for the refunded time.
Buy-In for Members of the Iowa General Assembly and Part-Time County Attorneys
If you served in the Iowa Legislature or were a part-time county attorney and did not elect IPERS coverage, you can purchase service for the time that you did not have IPERS coverage.
Leave of Absence/FMLA/Workers’ Compensation Buy-In or Free Credit
You may be granted free credit for FMLA leave or leave related to a workers’ compensation claim that was approved before January 1, 1998, and ended no later than July 1, 1999. You may purchase service for periods of leave that were approved on or after July 1, 1998, and/or extended past July 1, 1999. Up to one year of service can be granted or purchased for each leave. Free credit for FMLA leave is limited to 12 weeks in a calendar year.
Veteran’s Buy-In or Free Credit
You may purchase IPERS service for active duty in the Armed Forces of the United States. You may be eligible for free service if you left and returned to IPERS-covered employment within one year of your military service. If your military service was before December 14, 1994, you must complete the Application for Service Purchase. If your military service was after December 14, 1996, you should complete the Application for Free Military Credit. Disability pay from the U.S. Department of Veteran’s Affairs that is not payable in place of retirement benefits will not impact your ability to purchase service. If you receive a military pension, you may not purchase more than 20 credits of service.
Optional Coverage Buy-in
You may purchase service for past employment with optional IPERS coverage before January 1, 1999, if you declined coverage for that employment. You must not be eligible to receive a retirement benefit based on this employment.
Other U.S. Public Employment Buy-In
You may purchase service for employment with a public employer elsewhere in the United States. You must not be eligible to receive a retirement benefit based on this employment. (If you are eligible for a retirement benefit for this period of employment, you may apply for a “nonqualified” service purchase.)
Nonqualified Service Purchases
Nonqualified service purchases do not have to be linked to any particular type of employment. Nonqualified service includes service that is not qualified service–periods of time in which you did not perform any services at all (also known as “air time”) – and service in public employment (excluding military service) for which you remain eligible for retirement benefits. To be eligible, you must have 20 quarters of covered wages in IPERS and your purchase is limited to 20 quarters.
Service Purchase Cost
The cost to purchase service can vary widely and depends on your unique situation. To view an estimate, you can:
- Generate an estimate on-demand in My Account, your IPERS retirement toolkit.
- Complete the Application for Service Purchase.
Completing the application does not require you to purchase any or all service credits, which are priced in quarterly increments. Your official cost quote is prepared when you complete the Application for Retirement Benefits. Keep in mind that quotes expire after six months, and you are only able to purchase service at retirement.
IPERS does not profit from service purchases.
Paying for Service Purchases
Service purchases are paid in cash. You cannot pay with a credit card, nor may you make payments in installments. If you have money in one or more of the following retirement savings plans or accounts, you can transfer that money to IPERS to purchase service:
- 401(a) and 401(c) qualified plans, including 401(k).
- IRAs and annuities.
- 403(b) tax-sheltered annuities.
- Governmental 457(b) plan.