Reminder: Service Purchase Costs Recalculate on October 1
If you have an open service purchase with an unpaid balance, PSRS/PEERS will recalculate the cost for the unpaid portion on October 1. Understanding how this annual recalculation works can help you plan and potentially save money.
Why are Costs Recalculated?
The cost to purchase service is based on two key factors:
- The current combined (employer and employee) contribution rate for your system
- Your highest annual salary on record
Each October 1, if you have an open, unpaid service purchase application, your cost is recalculated using these figures. This ensures your purchase cost reflects the most current numbers.
What This Means for You
If your salary has increased or contribution rates have changed, your cost to purchase service may go up. That’s why applying early and paying off your purchase sooner can often result in a lower total cost. Remember, too, you can decide not to complete the purchase at any point.
You’ll receive a Service Purchase Application Recalculation Statement each October if you have an open balance. This statement outlines your updated cost and payment options.
Tools to Help
PSRS/PEERS offers helpful resources to guide you in service purchases:
- PSRS Service Purchase and Reinstatement Overview
- PSRS Reinstating and Service Purchases Brochure
- PEERS Service Purchase and Reinstatement Overview
- PEERS Reinstating and Purchasing Service Brochure
- Purchase Cost Recovery Calculator (available through Web Member Services). This tool can help you estimate how long it will take to recover your purchase cost through increased retirement benefits.
Have questions? Contact PSRS/PEERS at (800) 392-6848 for personalized assistance.