CalSTRS Service Credit Purchase: Types, Cost, Timing

Editorial note: This page is educational and is not legal, tax, or financial advice. CalSTRS service credit purchase eligibility, costs, and payment options are set by the California Teachers' Retirement Law (Education Code Part 13) and by rates the CalSTRS Teachers' Retirement Board adopts as a plan amendment. Confirm your specific eligibility and cost in your myCalSTRS account and consult a California licensed CPA or attorney before signing a purchase election.

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

This page explains what a CalSTRS Defined Benefit service credit purchase is. It covers which categories a California member may buy, how CalSTRS calculates the cost, and the payment methods allowed by California statute. It also lays out the exact steps to request a personalized cost estimate in myCalSTRS.

Every figure, category, and statutory reference is cited to primary sources. Those sources include the CalSTRS 2021 Member Handbook, the CalSTRS Service Credit and Contribution Rates pages, and the Purchase Service Credit Now brochure (COM 1566, revised January 2026). Statutory citations are to the California Education Code and Government Code.

Service credit purchases matter because CalSTRS calculates the monthly service retirement benefit as service credit multiplied by age factor multiplied by final compensation. Adding qualifying years or partial years directly raises the first factor in that product, and the added credit continues to influence the retirement allowance for the retiree and any option beneficiary for life.

What service credit purchase means at CalSTRS

Service credit at CalSTRS is the accumulated time (in years and partial years) during which you received creditable compensation and made contributions to the Defined Benefit Program. A CalSTRS full-time school year equals one year of credit. Part-time work is credited proportionally. You cannot earn more than one year of service credit in a single school year, per the CalSTRS 2021 Member Handbook.

A service credit purchase converts a qualifying prior period into additional months on your Defined Benefit account. Under Education Code Chapter 14, two purchase types are available to a member other than a retired member: redeposit of previously refunded contributions, and permissive service credit for qualifying prior service or approved leave. The purchase must be completed before your retirement effective date.

The 2013 nonqualified service credit ban

Before January 1, 2013, CalSTRS members with at least 5 years of service credit could purchase up to 5 years of nonqualified service credit, often called "air time," under the pre-PEPRA rules described in the CalSTRS 2021 Member Handbook. The purchased time was not tied to any prior employment. The California Public Employees' Pension Reform Act of 2013 (PEPRA) closed that option.

Government Code Section 7522.46 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) preserved elections tied to an official application received before January 1, 2013 that was later approved. In practical CalSTRS terms, this ended new "air time" applications for anyone who had not already applied by that cutoff.

The other purchase categories described below remain available under their own eligibility rules. Members who already purchased nonqualified service credit under the pre-2013 window still see it counted, subject to the CalSTRS-specific limitations in the handbook. Nonqualified service does not count toward the career factor or the 25 year threshold for one year final compensation. It may, however, help meet the 30 year requirement for retirement between ages 50 and 55 under CalSTRS 2 percent at 60.

Redeposit of previously refunded contributions

Redeposit lets you restore Defined Benefit service credit you lost when you took a refund of your CalSTRS contributions and interest. Per the CalSTRS 2021 Member Handbook, you are eligible if you returned to CalSTRS-covered employment, or if you are a member of one or more other eligible California public retirement systems. Defined Benefit Supplement termination benefits are not eligible for redeposit.

The cost equals the refunded amount plus interest at the CalSTRS actuarially assumed rate of return on investments (currently 7 percent), compounded from the refund date to the date of payment. You may redeposit all or a portion of the refund; a partial redeposit restores service credit proportional to the amount paid. Your redeposit must be paid in full before your retirement date.

Before you can begin receiving CalSTRS service retirement or disability retirement benefits, you must have earned at least 1 year of service credit after your most recent refund. You must also have at least 5 years of service credit. Narrow exceptions apply if you retire concurrently with another eligible California public retirement system or meet a disability benefits exemption. Redepositing does not reestablish your earlier membership date for calculating benefits.

Permissive service credit categories

Permissive service credit is credit for qualifying prior service or approved leave that was not credited to CalSTRS at the time. Education Code Section 22803 lists the categories. Per the CalSTRS 2021 Member Handbook and Section 22803, a member (other than a retired member) may request to purchase credit for the categories in the table below.

Source: California Education Code Section 22803 and Chapter 14.2 (Section 22820 et seq.), and the CalSTRS 2021 Member Handbook, "Purchasing service credit," page 59. Checked August 2026 at leginfo.legislature.ca.gov, section 22803.

You cannot purchase permissive service credit if you have received (or are eligible to receive) credit for the same service or time in another public retirement system. The same bar applies to time credited under the CalSTRS Cash Balance Benefit Program under Part 14 of the Education Code. Payment must be completed before your retirement effective date, per Section 22801.

Military service and USERRA-covered leave

CalSTRS handles active military service through two distinct paths. USERRA-covered reemployment is governed by Chapter 14.5 of the Education Code (Sections 22850 to 22856). It provides credit at no additional member cost for periods of qualifying uniformed service. You must return to work with the same employer under the federal Uniformed Services Employment and Reemployment Rights Act of 1994 (38 U.S.C. Sections 4301 et seq.).

Section 22850 defines "service in the uniformed services" broadly, including active duty, active duty for training, initial active duty for training, inactive duty training, and time absent for a fitness examination. It also defines "uniformed services" to include the Armed Forces, the Army National Guard and Air National Guard (when engaged in specified duty), the commissioned corps of the U.S. Public Health Service, and other categories designated by the President in time of war or emergency.

Certain active military service outside the USERRA reemployment path may still be purchasable as permissive service credit, subject to the CalSTRS Service Credit page eligibility rules and the age-based contribution rate. Members should confirm whether their period of service qualifies under USERRA (no member cost) or under the permissive purchase path (paid at the age-based rate).

Peace Corps and Job Corps teaching

Education Code Section 22803(a)(5) and (a)(6) frame the two federal-service categories. A member may purchase up to 2 years of certificated teaching service in a federally administered Job Corps center located in California. A member may also purchase up to 2 years of teaching service as a member of the Peace Corps.

For both categories, you must have been employed to perform CalSTRS-covered creditable service within 1 year before entering the program. You must also have returned to CalSTRS-covered creditable service within 6 months after the date of termination in the program.

These purchases are priced under the permissive service credit method (age-based contribution rate multiplied by highest compensation earnable in the last three school years, multiplied by years). They cannot be credited if you have received or are eligible to receive credit for the same time in another public retirement system.

How CalSTRS calculates the cost

CalSTRS uses two cost methods, one for redeposit and one for permissive service credit. Both are described in the CalSTRS 2021 Member Handbook and in the Purchase Service Credit Now brochure (COM 1566, revised January 2026).

The redeposit method is the refunded contribution amount plus interest at the CalSTRS actuarially assumed rate of return on investments, compounded from the refund date to the payment date. The handbook cites the current rate at 7 percent. Because interest compounds, the longer you wait to redeposit, the higher the total cost.

The permissive service credit method combines three inputs. It multiplies the amount of service credit you want to purchase (in years) by the contribution rate for your age at the time of purchase. It then multiplies that product by your highest annual compensation earnable during your last three school years of CalSTRS-covered employment.

The rates come from the CalSTRS Service Credit contribution rates page. Rates depend on whether you are a CalSTRS 2 percent at 60 or CalSTRS 2 percent at 62 member. Rates may be adjusted each July 1 under a board-adopted plan amendment.

Waiting increases the permissive cost even without a rate change, because the age input rises each year and your highest compensation earnable typically rises with salary growth. The CalSTRS Purchase Service Credit Now brochure states plainly: "The sooner you purchase service credit, the less expensive it will be."

Worked example: cost by age and salary

Payment methods and installment limits

Payment mechanics are set by Education Code Section 22801(a). Contributions to purchase additional service credit shall be paid in a lump sum, or in not more than 120 monthly installments (up to 10 years). No installment other than the final installment may be less than $25.

Regular interest is charged on the monthly unpaid balance during the installment period, per Section 22801(f). Interest may not be charged for a period of delay caused by CalSTRS' inability or failure to determine and inform the member of the amount payable, subject to the specific timing rules in that subdivision.

You must sign and return the completed CalSTRS statement of contributions and interest within 35 calendar days from the date of the offer, per Section 22801(a). The statement documents the specific cost required to purchase the service credit.

A backstop applies when CalSTRS is unable to inform the member or beneficiary of the amount required before the effective date of the applicable allowance. In that case, payment may be made within 30 working days after the date of mailing of the statement or the effective date of the appropriate allowance, whichever is later.

The purchase must be paid in full before a member or beneficiary receives any adjustment in the appropriate allowance because of that payment. In practice, that means the redeposit or permissive purchase must be complete before your retirement date. The employer may pay the amount required as employer contributions for certain permissive categories listed in Section 22801(d) (sabbatical, Mutual Educational and Cultural Exchange, maternity or paternity leave, and FMLA or CFRA leave), if the employer so elects.

How to request a cost estimate in myCalSTRS

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

1. Log in to myCalSTRS at myCalSTRS.com. Activate your account first if you have not already. The homepage links directly to Service Credit Purchase.
2. Open the Service Credit Purchase section. Per the CalSTRS Purchase Service Credit Now brochure (COM 1566, revised January 2026): "From the homepage, click Service Credit Purchase."
3. Choose the purchase type. Redeposit uses the Redeposit Calculator; permissive service uses the Permissive Service Credit Calculator. Both calculators live at CalSTRS.com/calculators.
4. Enter the required inputs. Redeposit needs the amount and date of your prior refund. Permissive service needs the category, the years to purchase, your date of birth, your benefit structure (CalSTRS 2 percent at 60 or 2 percent at 62), and your highest annual compensation earnable during the last three school years.
5. Submit the Redeposit or Purchase Permissive Service Credit form. Forms are available inside myCalSTRS and at CalSTRS.com/forms. Employer certification (or reciprocal system certification) is required for many permissive categories.
6. Sign and return the CalSTRS statement of contributions and interest within 35 calendar days. Per Education Code Section 22801(a), the offer expires if not signed and returned in that window.
7. Select lump sum or installment payment. Under Section 22801(a), installments may run up to 120 monthly payments (10 years), with each payment other than the final one at least $25, and regular interest charged on the unpaid balance.
8. Complete payment before your retirement effective date. The purchase must be paid in full before you receive any allowance adjustment based on it.

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, and CalSTRS staff can confirm eligibility, category, and forms for your specific case.

Publications, forms, and where to check for updates

The table below lists the CalSTRS publications and California code sections that govern service credit purchases, with the publisher, document title, and checked date so you can verify the current version.

Source: CalSTRS publications at calstrs.com, and California Education Code Part 13 and Government Code Section 7522.46 at leginfo.legislature.ca.gov. All URLs checked August 2026.

When a service credit purchase may not fit

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

• You expect to leave CalSTRS-covered work and take a refund. Taking a refund forfeits all rights to CalSTRS benefits. If you later return to CalSTRS-covered employment, you may buy back the forfeited service credit, but the redeposit cost includes interest that compounds over time. Confirm the impact with CalSTRS before you elect.
• You are pursuing nonqualified service credit ("air time"). That option was closed by Government Code Section 7522.46 for applications received on or after January 1, 2013 and cannot be reopened.
• You would receive credit for the same time in another public retirement system. Per Education Code Section 22803(b), you cannot receive CalSTRS credit for service or time if you have already received (or are eligible to receive) credit for the same service or time in the Cash Balance Benefit Program or another public retirement system.
• You cannot pay off the balance before retirement. Per Section 22801, service credit purchases must be paid in full before a member receives any allowance adjustment due to that purchase. That means your redeposit or permissive purchase must be complete before your retirement effective date.
• You are close to retirement and comparing purchase cost to future benefit. The permissive rate rises with age, and your final compensation may already be near its peak; the incremental benefit still has to break even over your assumed remaining life expectancy. Model both figures with a licensed California CPA or fiduciary planner before you commit.
• Your only source of funds would be a non-eligible plan. Not every plan is eligible to fund a CalSTRS purchase; verify the specific plan type and rollover mechanics with CalSTRS staff before starting a rollover.

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

CalSTRS service credit purchase, answered

Can I still buy CalSTRS "air time" (nonqualified 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. CalSTRS confirms in the 2021 Member Handbook that members may no longer purchase nonqualified service credit after that date.

What are the two purchase types available to CalSTRS members?

Per the CalSTRS 2021 Member Handbook and Education Code Chapter 14, the two types are redeposit of previously refunded Defined Benefit contributions and interest, and permissive service credit for qualifying prior service or approved leave. Nonqualified service credit is not a third live option after January 1, 2013.

How is the cost of redeposit calculated?

Per the CalSTRS 2021 Member Handbook, the redeposit cost equals the refund plus interest at the CalSTRS actuarially assumed rate of return on investments (currently 7 percent), compounded from the refund date to the payment date. Partial redeposit restores service credit proportional to the amount paid.

How is the cost of permissive service credit calculated?

Per the CalSTRS Purchase Service Credit Now brochure (COM 1566, revised January 2026), the cost equals three inputs multiplied together. Those inputs are the number of years to purchase, the age-based contribution rate for your benefit structure (CalSTRS 2 percent at 60 or 2 percent at 62), and your highest annual compensation earnable during your last three school years. Rates by age are published on the CalSTRS Service Credit: Contribution rates page and may be adjusted each July 1.

What are the payment options and installment limits?

Per Education Code Section 22801(a), you may pay in a lump sum or in not more than 120 monthly installments, up to 10 years. Each installment other than the final one must be at least $25. Regular interest is charged on the monthly unpaid balance during the installment period. Payment must be completed before your retirement effective date, and the CalSTRS statement of contributions and interest must be signed and returned within 35 calendar days of the offer.

Does CalSTRS charge interest during the installment period?

Yes. Per Education Code Section 22801(f), regular interest is charged on the monthly unpaid balance if the member pays in installments. The same subdivision protects the member from interest during a period of delay caused by CalSTRS' inability or failure to determine the amount payable, subject to the specific timing rules in that section.

Can I purchase military service credit if I never returned to my old employer?

USERRA-covered credit at no member cost requires that you return to work with the same CalSTRS employer under the federal Uniformed Services Employment and Reemployment Rights Act of 1994 and Education Code Section 22850. If you did not return to the same employer, USERRA no-cost credit does not apply, though certain active military service may still qualify as permissive service credit under the CalSTRS Service Credit page rules and the age-based contribution rate. Confirm your specific facts with CalSTRS staff.

Do I have to complete a service credit purchase before retirement?

Yes. Per Education Code Section 22801(a), the payment shall be paid in full before a member or beneficiary receives any adjustment in the appropriate allowance due because of that payment. In practice, that means the redeposit or permissive purchase must be completed before your retirement effective date, or the added credit will not increase your allowance.