Jeff Pabst, CRC
We recently received a question from a member about the option to purchase service within the LAGERS system:
“I’m currently an active, vested LAGERS member working for a LAGERS covered employer. I have about 6 years of service available that I can purchase from other non-LAGERS government employment where we didn’t have retirement. If I get a job with a non-LAGERS employer, will I have to buy back those months before I leave employment with my LAGERS agency or just before I retire and start pulling my pension? I’m also wondering if I would have to get a loan to purchase the service. Thanks!”
First off, let’s break this down a bit. There are two types of service that can be purchased:
- Active Duty Military Service – up to 4 years can be purchased
- Any other non-federal government employment worked in Missouri, where there was no retirement or you were not vested in that organization’s retirement plan
So, this person’s service would qualify for purchase through LAGERS. So we’ve answered the “what kind” of service can be purchased. Now let’s answer the “when” portion of the member’s question.
At a minimum, you must be an active LAGERS member to purchase service. “Active member” means currently employed by a LAGERS covered employer. So waiting until you leave LAGERS covered employment to purchase your service, in this scenario, would not work. As well, to purchase non-federal public employement, you must be vested with LAGERS. Keep in mind, it is best to try and purchase service sooner rather than later, as it can be expensive, and there can be financial benefits to doing it when you are still a ways off from retirement.
So that’s the when. Now the big question…how to pay for purchasing service. There is a purchase estimator on myLAGERS that will give you an estimate for the amount of service you’d like to purchase. You can roll over funds from another retirement account to pay to fund the service. You can pay in a lump sum or in 12- or 24-month installments. Contact our office if you would like additional help in purchasing service. Let’s turn that time into some protected lifetime income for you in retirement!
