Credited service is the amount of time an employee works for a LAGERS employer. It is calculated as the sum of membership service and prior service.
Membership service is any employment earned after an employer has joined LAGERS. A member earns one month of credited service toward his or her benefit for every one month of LAGERS covered employment.
Prior service is employment prior to the date an employer joins LAGERS. A LAGERS employer has the option to cover 100%, 75%, 50%, or 25% of prior service.* In order to receive credit for all eligible prior service, an employee must be an active employee on the effective date of membership and continuously for one year thereafter.
*Prior service is a one-time election an employer makes when joining LAGERS. If an employer has a retirement plan that was determined to be ‘similar in purpose’ to LAGERS, prior service will be handled on a case by case basis. Click here to learn more about how this may impact a member's benefit.
Because LAGERS is a state-wide plan with hundreds of member employers, an employee can work for any combination of member employers and continue to accumulate credited service toward his or her benefit.
Credited service with each employer would be calculated separately at the unique benefit levels elected by each employer. Each of these employers would be financially responsible only for the service the employee earned while working for them. Only the last 120 months of credited service are used in the calculation of final average salary.