Did You Spend Time Working Outside MCPS? You May Be Eligible for Retirement Credit
You may be eligible for service credit on your pension for time worked with other organizations. Purchasing service and applying for credit for military service are two ways that you can earn service toward your retirement for time spent at other organizations.
Why Apply for Additional Service?
Applying for or purchasing additional service credit toward your retirement can help you achieve your retirement goals. Depending on your circumstances, additional service may increase your retirement benefit or even allow you to retire earlier than you had anticipated.
There are two ways to gain additional service credit.
1. Apply for military service credit for time spent on active duty in the United States military and time served in the National Guard and Reserves, the Maryland National Guard, and the Maryland Air National Guard. See Understanding Your Retirement for details.
You can receive up to five years of service credit for active duty military service on your Montgomery County Public Schools (MCPS) county core and/or supplemental pension plan or state pension, after accruing 10 years of creditable service with MCPS. There is no cost to obtain military service credit. However, you may not claim this service with any other retirement or pension system, including your military pension.
You must apply for military service credit and complete the required forms before retirement or resignation from MCPS. Once you have retired or resigned, no additional credit may be claimed.
To apply for military service credit toward your MCPS pension plan (core and supplemental), submit MCPS Form 455-18, Statement of Military Service, to the Employee and Retiree Service Center (ERSC), along with a copy of your discharge papers that show the type of military service and dates of entry and discharge.
To apply for military service credit toward your State core pension plan, submit State Form 43, Claim of Retirement Credit for Military Service, to the Maryland State Retirement Agency (MSRA).
2. Apply to purchase service credit for time spent employed by the federal government; an out-of-state municipality; a nonparticipating Maryland municipality; or a private, parochial, or out-of-state school (as a teacher).
You may purchase a minimum of one month, up to a maximum of 10 years, if you were previously employed by one of the following:
- Federal government
- Out-of-state municipality
- Nonparticipating Maryland municipality
- Private, parochial, or out-of-state school (as a teacher only)
This service must be purchased at least 90 days prior to retirement. You pay the full cost of purchased service. The cost depends on age, final salary, and the amount of service you wish to purchase. Typically, purchasing service is expensive.
In addition, previous service may be purchased for periods of the following types of qualified approved leave:
- Personal illness
- Birth or legal adoption of a child
- Study leave
- Government-sponsored and/or subsidized employment
If you are on a paid, qualified leave of absence, contributions are paid during the time of leave and you earn service credit.
If you are on an unpaid, qualified leave of absence, you can purchase service for the period of leave after returning to work. You do not have to wait until the time of retirement to purchase credit for periods of approved leave. Purchasing leave of absence time is less costly when it is done immediately after returning to work.
It is extremely important to file all required paperwork during an approved leave of absence. This ensures that you are eligible to purchase service credit for the period of leave and the active employee pension death benefit will remain in effect while you are on leave. You must pay any pension contributions missed during the approved leave (plus interest) to be eligible for retirement credit.
To purchase service toward your MCPS core and supplemental pension plan, you must submit ERSC Form 421, Request to Purchase Service, to ERSC at least 90 days prior to your retirement.
To purchase service toward your State core pension plan, you must submit to MSRA State Form 26, Request to Purchase Previous Service, as indicated in the form’s instructions. If you need to also purchase this service toward the MCPS supplemental pension plan, you need to forward the cost-to-purchase-service notice you receive from the state to ERSC. MCPS will provide you with the cost to purchase this service toward the MCPS supplemental pension plan.