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South Carolina Retirement System (SCRS)

Purchasing Service

Active members may establish additional service credit for various types of previous employment and leaves of absence, and up to five years of non-qualified service, which is a type of service credit not associated with any specific employment. Generally, a member on leave without pay from a covered employer is not eligible to establish service credit of any type. 

You may establish service credit through a lump-sum payment, an installment service purchase (pre- or post-tax, plus interest), or a tax-deferred rollover from an Individual Retirement Account (IRA), a 401(k) plan, a 401(a) eligible plan, a 403(b) plan, or a 457 plan. The interest rate for an installment service purchase is calculated at the prime rate plus 2 percent.

You may establish each type of service credit once within a fiscal year. If you are establishing service to meet retirement eligibility, contact PEBA for more information. Payment for service purchases must be made in full prior to your retirement date or termination from employment. If you previously established service credit for periods of part-time service or previously earned service credit for periods of part-time service prior to July 1996, you may be eligible to establish additional service credit at an additional cost. Please contact PEBA for more information.

One of the factors used to determine the cost of most types of service purchases is your career highest fiscal year earnable compensation. This includes any salary earned during a period of withdrawn service, regardless if the withdrawn service has been established through a service purchase. This also includes earnable compensation received while participating in the State Optional Retirement Program (State ORP) if you have purchased SCRS service credit for any State ORP participation. The cost to purchase periods of less than one year will be prorated. You may not establish SCRS service credit for a period of service, other than military service, for which you may also receive a retirement benefit from another defined benefit retirement plan or for a period of service for which you already have credit in SCRS. You also may not establish SCRS service credit if doing so would violate Section 415 or any other provision of the Internal Revenue Code.

A Class Three member who purchases a period of withdrawn service or State ORP participation for any period of covered employment rendered prior to July 1, 2012, will revert to Class Two membership.

Some types of purchased service may not be used in determining eligibility for retiree health insurance. If you are covered by the state’s employee health insurance program, contact PEBA at 803-734-0678 or toll free at 888-260-9430 for eligibility information. If your employer does not participate in the state’s employee health insurance program, contact your employer for information about insurance in retirement.

Types of Service
Installment Service Purchase Program