CalPERS Service Credit Purchase: Costs, Rules, and Timing

Editorial note: This page is educational and is not legal, tax, or financial advice. CalPERS service credit purchase eligibility, costs, and payment options are set by California statute, by the California Public Employees' Retirement Law (PERL), and by CalPERS regulations. Confirm your specific eligibility and cost in your myCalPERS account and consult a California licensed CPA or attorney before signing an election.

Last updated: August 13, 2026 · By Gold California Editorial

This page explains what a CalPERS service credit purchase is, which categories a California member may buy, how CalPERS calculates the cost, the payment methods available, and the exact steps to request a personalized cost estimate in myCalPERS. Every figure, form number, and statutory reference is cited to the CalPERS Service Credit page (Updated June 27, 2025), to CalPERS Publication 12 (Service Credit Purchase Options), or to the California Government Code.

Service credit purchases affect three things at retirement: the total years used in your benefit formula, the size of your monthly allowance, and any survivor continuance based on that allowance. That is why the eligibility rules, the cost methodology, and the payment path matter well before you file your service retirement election.

What service credit purchase means at CalPERS

CalPERS service credit is a measure of time worked (or time otherwise creditable) that feeds into the retirement formula: Service Credit x Benefit Factor x Final Compensation. A service credit purchase converts an eligible period (a redeposit of a prior refund, an approved leave, qualifying military service, or another listed category) into additional months of credit on your CalPERS account.

Service credit purchases are separate from the annual accrual you earn from your CalPERS-covered payroll. They are voluntary. They are also priced by CalPERS using assumptions about your salary, age, and expected retirement date, and the price generally rises the longer you wait to buy.

The PEPRA limit under Government Code Section 7522.46

The California Public Employees' Pension Reform Act of 2013 (PEPRA) added Government Code Section 7522.46. Subdivision (a) states: "A public retirement system shall not allow the purchase of nonqualified service credit, as defined by Section 415(n)(3)(C) of the Internal Revenue Code of 1986 (26 U.S.C. Sec. 415(n)(3)(C))."

Subdivision (b) preserves elections received before that date: the ban does not apply to an official application received by the public retirement system prior to January 1, 2013 and later approved. In practical CalPERS terms, this closed the Additional Retirement Service Credit (ARSC) purchase (the former 1 to 5 year "airtime" option) to any application received on or after January 1, 2013.

CalPERS confirms the ARSC closure directly on its Service Credit page: "As a result of the Public Employees' Pension Reform Act of 2013 (PEPRA), the Additional Retirement Service Credit (ARSC) is no longer a service credit purchase option." The other purchase categories described below remain available under their own eligibility rules.

Redeposit of previously withdrawn contributions

Redeposit is available if you were previously a CalPERS member, took a refund of your contributions and interest, and want to restore those years of service credit. Per the CalPERS Service Credit page, four member categories may redeposit:

• active CalPERS members;
• inactive CalPERS members with remaining service credit;
• members of a reciprocal California retirement system;
• members whose former spouse or registered domestic partner took a refund under a community property split.

The redeposit cost is the amount you withdrew plus interest compounded annually to the date of payment. You are not eligible to redeposit if you are retired, or if you already received credit for that time in another retirement system. You are also not eligible if you are not currently a CalPERS or qualifying reciprocal member and the agency you worked for no longer contracts with either.

Service Prior to Membership (including CETA, Fellowship, Prior Service)

Service Prior to Membership (SPM) covers time you worked for a CalPERS-covered employer before you became a CalPERS member. CalPERS calculates the cost using the pay and contribution rate method: your pay rate at the time and the contribution rate on the date you became a CalPERS member, with interest compounded annually until you elect to purchase.

Two related categories fall under the same pay and contribution rate method. CETA service (Employment and Training Act of 1973) covers 1973 to 1982 CalPERS-employer work under federal or state CETA programs. Fellowship covers 1973 to 1982 work under the Assembly, Senate, Executive, or Judicial Administration Fellowship programs.

Prior Service covers time worked for an employer before the employer contracted with CalPERS. Whether it is credited at no cost, at partial cost, or offered for purchase depends on the specific employer contract.

Alternate Retirement Program (ARP) conversion

If you were a first-time state miscellaneous or industrial employee hired between August 11, 2004 and June 30, 2013, you participated in the Alternate Retirement Program (ARP) for your first 24 months of state employment. ARP is administered by the California Department of Human Resources (CalHR) and does not count as CalPERS service credit until it is transferred or purchased.

You had an initial three month election window (opened at your 47th month of state service) to transfer ARP funds to CalPERS, receive a lump sum, or roll the funds to a Savings Plus account. Per the CalPERS Service Credit page, members who did not elect during that window may purchase all unconverted ARP service starting on the first day of the 50th month following the CalPERS membership date.

Military Leave of Absence (USERRA-style protections)

A Military Leave of Absence covers time off from CalPERS-covered work to serve in the uniformed services. Per the CalPERS Service Credit page, the leave is posted to your account at no cost if three conditions are met. You were granted a military leave. You entered active duty within 90 days of leaving your CalPERS-covered employment. You returned to CalPERS-covered employment (or were placed on a state civil service re-employment list) within six months of your discharge date.

If you returned after the six month window, you may still be eligible to purchase the service credit at cost. The cost is based on the contributions you would have owed for the period of the absence, using your pay rate, any exemption amount that applied, and the contribution rate in effect at the time of the leave. No interest is added to the lump-sum cost for a Military Leave of Absence purchase.

Military service credit for pre-CalPERS active duty

Military service credit for active duty served before CalPERS-covered employment is capped at 4 years. Per the CalPERS Service Credit page, active members must meet three requirements. You need at least 1 year of earned CalPERS service for each year of military credit requested. You must have served at least 1 year of active military duty. You cannot have been dishonorably discharged.

You cannot purchase military service credit if you are receiving military retirement pay based on 20 or more years of active military service. You are also ineligible if you already received military service credit in any other retirement system.

Certain retired members may also purchase military credit. Per CalPERS, they must have retired on or after December 31, 1981, met the earned-CalPERS-service requirement, and retired within 120 days of separation from a qualifying employer. The resulting benefit increase is prospective from receipt of the election and is not retroactive to the retirement date.

Military service credit requests currently cannot be submitted through the myCalPERS online request tool. CalPERS notes on its Service Credit page: "At this time, Retired Military service credit requests are not able to be submitted online." Members use the applicable paper request form for these purchases.

Peace Corps, AmeriCorps*VISTA, and AmeriCorps service

An active or inactive CalPERS member may purchase up to 3 years combined of Peace Corps, AmeriCorps*VISTA (Volunteers In Service To America), or AmeriCorps service credit. The requirement is dated certification of service from the Peace Corps or AmeriCorps. Public agency members are eligible only if the employer contract includes this option; state and school members are eligible if active or inactive.

The cost is calculated using the present value method, based on your highest monthly full-time pay rate, your estimated future final compensation, and the projected retirement benefit increase. CalPERS uses the same actuarial assumptions (projected age at retirement, life expectancy, salary inflation, and assumed rate of return) that fund the plan overall.

Approved leaves of absence

Per the CalPERS Service Credit page, the leave of absence categories that may be purchased are Educational, Maternity or Paternity, Sabbatical, Serious Illness, Service, and Temporary Disability. Each leave period must be requested separately. Eligibility depends on the leave type and on your employer contract; you must have been a CalPERS member at the time of the leave.

Category-specific caps and eligibility apply. For example, per CalPERS, you may purchase a maximum of 2 years of Educational leave (for state or California State University employees before and after the leave), and up to 1 year of Maternity or Paternity leave. The cost for a non-temporary-disability leave is calculated using the present value method described above.

Layoff service credit

Layoff service credit covers time away from work due to a formal layoff action on or after January 1, 1981. Per the CalPERS Service Credit page, the eligibility rules are:

• up to 1 year per layoff period;
• you must currently be active with the layoff employer;
• you must have been a full-time employee before the layoff;
• you must elect the purchase within 3 years of returning to work, or within 3 years of the effective date the employer added the option to its contract.

The employer must contract with CalPERS to allow the layoff purchase option. Employers that do not include the option in their contract cannot offer it to their members.

Optional Member Service

Optional Member Service is time worked in a position that permits (but does not require) CalPERS membership. Per the CalPERS Service Credit page, three categories qualify.

• A state employee appointed by the Governor, Lieutenant Governor, Attorney General, Controller, Secretary of State, Treasurer, or Superintendent of Public Instruction who is exempt from civil service.
• A California Senate or Assembly employee whose wages are paid from funds controlled by either body.
• Certain officials elected or appointed to a fixed term of office with a city or county, including some city attorneys and elected or appointed school and contracting-agency officials.

There are no CalPERS-set caps on the amount of Optional Member Service that can be purchased. Position eligibility is determined by the dates of your term and by the employer contract. You cannot purchase Optional Member Service credit if you are retired, or if the position is excluded by the employer contract.

How CalPERS calculates the cost

CalPERS uses two primary cost methods, both described on the Service Credit page and in Publication 12 (Service Credit Purchase Options).

The present value method estimates the value today of the future increase in your CalPERS retirement benefit that the purchased credit will produce. It uses your highest monthly full-time pay rate, your estimated future final compensation, and the projected retirement benefit increase. CalPERS applies actuarial assumptions for projected retirement age, life expectancy, salary inflation, and the assumed rate of return on investments. This is the method CalPERS applies to most leave-of-absence types and to Peace Corps, AmeriCorps*VISTA, and AmeriCorps service.

The pay and contribution rate method uses your pay rate at the time the service was rendered, the contribution rate on the date you became a CalPERS member, and interest compounded annually until the purchase is made. CalPERS applies this method to Service Prior to Membership, CETA, Fellowship, and (when a cost is charged) Prior Service.

Because CalPERS interest accrues while a request is pending, waiting to request a cost estimate generally increases the purchase price. CalPERS states on its Service Credit page: "The longer you wait to request cost information, the more expensive it could be."

Payment methods a member may use

Per the CalPERS Payment Options page, a member may pay for an eligible service credit purchase using one or a combination of the following methods.

Lump sum. A one-time payment for the full cost. If you already have an after-tax installment schedule and want to submit a lump sum on top of it, follow the CalPERS lump-sum instructions in your election paperwork.

After-tax payroll installments. Available to active members whose payroll is reported to CalPERS. The installments are taken from wages after taxes are applied, so the deduction amount is already taxed. You may make additional payments or pay off the balance early on this schedule.

Pre-tax (tax deferred) payroll installments. Available to all state employees and to some school and public agency employees whose employer offers the plan; part-time California National Guard members are not eligible. Per Federal Internal Revenue Code Title 26, subsection 414(h)(2)(D), you cannot make additional payments, change the number of payments, alter the schedule, or pay the balance off early on a pre-tax installment schedule.

Partial payment. You may pay part of the cost and put the remaining balance on an installment schedule.

Rollover or direct trustee-to-trustee transfer. CalPERS will accept a rollover or transfer from a qualified fund as a partial payment or lump sum. Per the CalPERS Payment Options page, eligible source plans are:

• 401(k), 401(a), or IRA plans;
• 403(a) or 403(b) plans;
• governmental 457 plans;
• Conduit IRAs that originated from qualified 403(a), 403(b), or governmental 457 plans and have not been commingled with other funds;
• Traditional Contributory IRAs, including SEP and Keogh IRAs.

Roth IRAs are not eligible.

Actuarial Equivalent Reduction (AER) at retirement. AER lets you close an outstanding purchase balance at retirement by taking a permanent monthly reduction to your allowance rather than paying the balance in full. Per the CalPERS Payment Options page, AER is available only at retirement (or to state employees converting past Second Tier service).

Installment length is capped by pay frequency, and there is a $15 minimum monthly payment (or the equivalent if paid other than monthly), per the CalPERS Payment Options page. The schedule includes interest through completion of payments.

Source: CalPERS, Payment Options (Service Credit). Checked August 2026 at calpers.ca.gov/members/retirement-benefits/service-credit/payment-options.

Elections received on or after January 1, 2020 that carry an unpaid balance to retirement can be closed only by paying the remaining balance in full or by AER. Per the CalPERS Payment Options page, Benefit Roll Deduction (BRD) at retirement is available only for elections received prior to January 1, 2020.

How to request a cost estimate in myCalPERS

The steps below outline the general CalPERS process to request a service credit purchase cost estimate. They describe the mechanics only. Discuss the specifics with CalPERS and a California licensed CPA or fiduciary planner before signing an election.

1. Log in to myCalPERS at my.calpers.ca.gov. Use your CalPERS credentials. Create an account if you do not yet have one.
2. Open the Retirement tab and select Service Credit Purchase. Per the CalPERS Service Credit page, use the Search for Purchase Options button to start the eligibility questionnaire.
3. Answer the eligibility questions and provide employment and service information for the period. The tool will surface which service credit types you may be eligible to purchase.
4. Review the estimated cost for each eligible option and submit the request for CalPERS review. If certification is required from your employer or a reciprocal system, CalPERS will request it. The employer or reciprocal agency has 30 days to provide certification, and the request expires if certification is not provided within that window (in which case you must resubmit).
5. Wait for CalPERS to make the final cost details available (within 60 days after receiving all required documents). The final cost information appears in the Service Credit Purchase section of your myCalPERS account.
6. Select a payment option and electronically sign the election before the stated expiration date. If your election is not submitted on or before the expiration date, the election becomes invalid and you must submit a new request; the new eligibility and cost may not match the earlier estimate.
7. Use the paper form for categories that cannot be submitted online. Per the CalPERS Service Credit page, Retired Military service credit requests cannot be submitted online at this time.

None of these steps replaces professional advice. A California CPA or fiduciary planner can model each purchase against your household's tax and cash-flow picture before you commit.

Publications, forms, and where to check for updates

The table below lists the primary CalPERS publications and forms that govern service credit purchases, with the publisher, document title, and checked date so you can verify the current version.

Source: CalPERS Service Credit (Time Worked), Payment Options, and Forms & Publications sections at calpers.ca.gov, and California Government Code sections 7522.46 and 21024 at leginfo.legislature.ca.gov. All URLs checked August 2026.

When a service credit purchase may not fit

This page covers the mechanics. It is not personalized advice. Several situations warrant extra caution before a member elects a service credit purchase.

• You expect to leave CalPERS-covered work soon and take a refund. If you refund your contributions after purchasing service credit, you generally lose that credit unless you later redeposit under the redeposit rules. Confirm the impact with CalPERS before you elect.
• You are close to retirement and comparing purchase cost to future benefit. The present value method already prices the future benefit increase, but your own break-even year depends on assumed longevity and Option election. Model both figures with a licensed California CPA or fiduciary planner.
• You would need to draw the purchase money from a Roth IRA or non-qualified source. Roth IRAs are not eligible for rollover to CalPERS. Confirm the source plan against the CalPERS Payment Options page before starting a rollover.
• You cannot commit to a pre-tax installment schedule. Pre-tax installments are irrevocable under IRC 414(h)(2)(D). If flexibility to prepay or change the schedule matters, an after-tax installment or a lump sum may fit better.
• You are pursuing an ARSC-style airtime purchase. That option was closed by Government Code Section 7522.46 for applications received on or after January 1, 2013. It is not available.
• You are receiving military retirement pay based on 20 or more years of active service. You are not eligible to purchase CalPERS military service credit in that case, per the CalPERS Service Credit page.

None of these situations replaces professional advice. Consult CalPERS, a California licensed attorney, or a fiduciary planner for facts specific to your case.

CalPERS service credit purchase, answered

Can I still buy CalPERS airtime (Additional Retirement Service Credit)?

No. Government Code Section 7522.46 (added by PEPRA) bars public retirement systems from allowing the purchase of nonqualified service credit for applications received on or after January 1, 2013. CalPERS confirms on its Service Credit page that the Additional Retirement Service Credit (ARSC) is no longer a service credit purchase option.

Can PEPRA members redeposit prior withdrawn contributions?

PEPRA closed the ARSC (nonqualified airtime) purchase but did not close redeposit of a member's own previously withdrawn CalPERS contributions. Per the CalPERS Service Credit page, redeposit is available to active CalPERS members, inactive CalPERS members with remaining service credit, and members of a reciprocal California retirement system, among the listed categories. Confirm your specific eligibility in myCalPERS.

How long does CalPERS take to produce the cost estimate?

Per the CalPERS Service Credit page, once CalPERS receives all required documents and determines eligibility, the cost details are available in the Service Credit Purchase section of myCalPERS within 60 days. If certification is needed from your employer or a reciprocal agency, the employer or agency has 30 days to provide it, and the request expires if certification is not received within that window.

Can I roll a Roth IRA into a CalPERS service credit purchase?

No. Per the CalPERS Payment Options page, eligible source plans for a rollover or trustee-to-trustee transfer include 401(k), 401(a), IRA, 403(a), 403(b), governmental 457, certain Conduit IRAs, and Traditional Contributory IRAs (including SEP and Keogh IRAs). Roth IRAs are not accepted.

What is the maximum installment period for a service credit purchase?

Per the CalPERS Payment Options page, monthly payroll installments run up to 180 payments (roughly 15 years). Quad-weekly runs up to 195 payments; semi-monthly up to 360; bi-weekly up to 390. The minimum installment is $15 per month or the equivalent if paid other than monthly, and the schedule includes interest through completion of payments.

Can I change a pre-tax installment schedule after signing?

No. Per the CalPERS Payment Options page, pre-tax (tax deferred) installments follow Federal Internal Revenue Code Title 26, subsection 414(h)(2)(D). You cannot make additional payments, change the number of payments, alter the schedule, or pay the balance off early on a pre-tax schedule. After-tax installments offer that flexibility.

What happens if I retire with an unpaid service credit purchase balance?

It depends on when CalPERS received the election. For elections received on or after January 1, 2020 with an outstanding balance at retirement, your options are to pay the remaining balance in full or to use an Actuarial Equivalent Reduction (AER). AER reduces your monthly allowance to satisfy the unpaid balance. Elections received prior to January 1, 2020 also allow continued payments through Benefit Roll Deduction (BRD), per the CalPERS Payment Options page.

How much CalPERS military service credit can I buy, and what disqualifies me?

Per the CalPERS Service Credit page, the cap is 4 years of military service credit. You must have at least 1 year of earned CalPERS service for each year requested.

You cannot purchase military service credit if you are receiving military retirement pay based on 20 or more years of active military service. You are also ineligible if you already received military service credit in any other retirement system. Retired military service credit requests currently cannot be submitted through the myCalPERS online tool.