Get the Credit for Prior Service
Did you work in public employment for New York City or New York State before becoming a member of TRS? If the answer is yes, you probably have pensionable prior service—meaning you can “buy back” that time and boost your future pension.
Why Purchase Credit for Prior Service?
Service credit is an important factor in calculating your guaranteed pension under the Qualified Pension Plan (QPP). The higher your service credit total, the higher your pension amount at retirement.
Purchasing prior service early in your membership can also help you become vested sooner. (Vesting occurs once you reach five years of service credit.)
How Does Prior Service Purchase Work?
Generally, the City’s Department of Education provides TRS with data about any pensionable prior service you may have. You’ll see this service total reported in the Total Service Credit Details section on your Annual Benefits Statement.
If you had other New York City service before joining TRS, or if you worked in a public-sector job elsewhere in New York State, you’ll need to tell us by completing a form. We’ll review your service claim and validate your service with your former employers. To start this process, download the Cost Letter Request Form (code SB64).
Once TRS has validated the service, we will send you an email and post a cost letter online for you. Your cost letter will explain the amount of service credit available, the cost of purchase, and the different payment options. Due to accumulating interest charges, the cost will increase over time, so we will post updated cost letters periodically. TRS will not send you these letters by mail, but we will notify you by email whenever new correspondence is posted.
How Much Does Service Purchase Cost?
For Tier VI members, the cost is 6% of the wages you earned while performing the service, plus applicable interest back to the dates of service. For Tier IV members, the cost is based on a different percentage of those wages (usually 3% or 4.85%), plus applicable interest.
When Should I Purchase My Prior Service?
If you plan to retire soon, keep in mind that TRS must receive claims for prior service credit before your retirement date. If you’re a long way from retiring, good! Claiming and purchasing prior service credit sooner rather than later will limit the interest charges that accrue over time. Just note that purchased prior service cannot be credited to your account until you’ve been a member for two years.
Purchasing credit for prior service is always optional, but we hope you’ll consider the benefits!