Service Purchases
You may also acquire service through the purchase of permissive service credits. You may want to help meet a different retirement eligibility date or to increase your pension. There are four types of service purchase and each applies in different situations. Please review the summaries below. There are variables to keep in mind before you make decisions. The cost to purchase service credit for each individual is based on many factors, some of which are age, projected earnings, benefit provisions and expected retirement date. If you are interested in purchasing service, please contact the Retirement Fund for additional information.
- Service Purchase (Buy-Up)
- Additional Credited Service
- Refund Buy Back
- Military Buy Back
Purchase of Credited or Non Credited Service (Buy Up)
A member who wants to increase the amount of service may purchase service of either qualified or non-qualified service:
Qualified – If you have worked in service as (i) an employee of the government of the United States, any state or political subdivision thereof, or any agency instrumentality of any of the foregoing, (ii) service as an employee of an education organization which is a public, private, or sectarian school which provides elementary or secondary education (through grade 12), (iii) service as an employee of an association of employees who are described in clause (i) above, or (iv) military service (other than qualified military service) recognized by such governmental plan, then you are eligible to purchase the equivalent time provided that you are not going to receive a retirement benefit from them.
- You must provide verification of service from the entity
- You may purchase the full number of years worked (e.g., if you’ve worked 10 years, you can purchase 10 additional years)
Non Qualified – Is a purchase of service that is other than qualified service defined above. This type of service purchase is available to any vested member and is limited to five (5) years of service.
Some general points to remember about service purchases:
- A member must have earnings from the city for the then current year to purchase service.
- Minimum purchase is one month.
- You can purchase qualified service credit any time during your employment.
- You can purchase non-qualified service any time after you are vested.
- Your retirement date will change after purchasing service.
- Payment for a service purchase must be made all at one time.
- Only Orange service may be purchased after Sept. 30, 2013 for police and general members and after Jan. 9, 2015 for fire members.
Additional Credited Service
A member who wants to increase the amount of benefit service at the time of termination may purchase additional service. This purchase must be done before you terminate but after you are certain you will terminate employment.
Some general points to remember about service purchases:
- You must have earnings from the city for the then current year to purchase service.
- You must provide proof of separation in writing from city Human Resources or supervisor.
- You must not be enrolled in the DROP.
- Minimum purchase is one month.
- Your retirement date will NOT change.
- Payment for a service purchase must be made all at one time.
- As a terminated vested member, the amount paid is based on the fact that you will no longer be receiving a salary or any other compensation from the city. If you become reemployed by the city, it will change the basis for the cost of the purchase and probably reduce the benefit service, since you will be receiving compensation again from the city.
Refund Buyback
If you have received a refund of your contributions, your prior service will not be restored unless you repay the total amount of all contributions withdrawn plus interest. Employees who are rehired by the City of Fort Worth have 90 days from the date of rehire to contact the Retirement Fund regarding the repayment of withdrawn contributions to restore prior service.
This can be accomplished in two ways:
- Repay your prior distribution plus interest in a single lump sum payment within 90 days of reemployment, or,
- Repay your prior distribution plus interest through a payroll deduction buyback plan, which commences within 90 days of reemployment; interest will be charged through the payback period, which will not exceed three years.
If you want to repay your prior distribution, please contact the Retirement Fund for information and necessary forms to complete.
Note: The Interest on a buyback will be at the assumed rate of return in effect at the start of any buyback. The assumed rate of return is set by the Retirement Board of Trustees. (effective 01/01/2018).
Military Buyback
Additionally, should you elect not to make up your employee contributions, the time served in active duty will count towards your eligibility for retirement, but will not be included in the computation of benefits.