If I have less than 5 years of service am I still able to purchase nonqualified service credit or air time?

Ask Jack Jack Ehnes

With the recent passage of Assembly Bill 340, the Public Employees’ Pension Reform Act of 2013, all purchases of nonqualified service credit, also known as ‘air time’, will be prohibited beginning January 1, 2013. Members who have earned at least five years of service credit are eligible to purchase up to five additional years of nonqualified service credit or ‘air time.’

All purchases or requests for purchases, received prior to 5 p.m. December 31, 2012, will be honored even if full payment is not yet complete. All mailed requests must be received prior to 5 p.m. December 31, 2012; all faxed requests must be received before 5 p.m. December 31, 2012; all hand-delivered requests must be date stamped prior to 5 p.m. December 31, 2012. Any requests received after 5 p.m. December 31, 2012 will be denied.

Nonqualified service credit is defined as service credit not connected to any specific prior employment. You cannot use the purchase of nonqualified service credit or airtime to qualify for the career factor benefit enhancement or one-year final compensation.

Permissive Service Credit Allowed

You may still be eligible to purchase permissive service credit for a specific service performed in the past, such as:

  • Creditable service before becoming a CalSTRS Defined Benefit member.
  • Employer-approved sabbatical leave.
  • Certain active military leave before 1994.
  • University of California or California State University teaching service not credited or purchasable under another retirement system.
  • Employer-approved maternity or paternity leave.
  • Out-of-state or foreign school education services performed in a public education position.
  • Employer-approved leave covered under the federal Family and Medical Leave Act.

The purchase of permissive service credit is not prohibited under AB 340 and the cost depends or your age, and your highest annual earnable compensation during your last three years of creditable service.

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