Purchasing Service Maximizing Your IPERS Benefits

What Are the Various Types of Service Purchases?

The various types of service purchases are summarized below. All service purchase applications must be in writing using IPERS’ Application for Service Purchase. You may purchase service even if you are already retired.

Service purchases are divided into two broad classifications: qualified service purchases and nonqualified service purchases. Qualified service purchases require you to have less IPERS service credit and have fewer limits on how much you can buy than nonqualified service purchases.

QUALIFIED SERVICE PURCHASES

You may convert regular membership class service credits to Special Service class credits, provided that you meet both of these conditions:

• Are a vested IPERS member.
• Have at least 1 quarter of covered wages on file with IPERS in a Special Service membership class (for example, service as a sheriff, police officer, or firefighter).

You can purchase IPERS service for a leave of absence or a leave that qualified for workers’ compensation benefits that began on or after July 1, 1998, if you meet both of these conditions:

• Are a vested member of IPERS with at least 4 quarters of covered wages on file.
• Were on an approved leave of absence or were absent because of an illness or injury that qualified for workers’ compensation benefits.

If you served in the Iowa Legislature and elected out of IPERS coverage, you may buy this service.

If you terminated covered employment because of an illness or injury that qualified for social security disability benefits or railroad retirement disability benefits and you requested an IPERS refund, you may be eligible to purchase service for the period covered by the refund, provided that you meet all of the following conditions:

• Were a vested member who had terminated IPERS-covered employment because of a disability.
• Have been issued an IPERS refund payment.
• Have begun to receive federal social security disability payments or railroad retirement disability payments for the disability.
• Provide IPERS with a copy of the applicable disability award letter within 90 days of beginning to receive disability payments.

If you withdrew accumulated contributions (took a refund) for service earned after July 4, 1953, you may purchase the refunded credit if you meet both of these conditions:

• Are a vested IPERS member.
• Have received 1 or more refunds for the applicable period.

Effective January 1, 2009, you may be able to receive a credit against the actuarial cost of the buy-back if you meet the conditions listed above plus all of the following requirements: 

• Received a refund before July 1, 1998.
• Were vested in IPERS when you received the refund.
• Returned to full-time employment before July 1, 1998, with mandatory IPERS coverage.

You may purchase IPERS credit for active duty in the Armed Forces of the United States, provided that you meet all of these conditions:

• Are a vested IPERS member with at least 4 quarters of covered wages on file.
• Submit a copy of DD Form 214 (or other acceptable military records) to verify the dates of the active-duty service.
• Are not receiving and are not eligible to receive military disability benefits in place of military retirement benefits.

You may purchase service credit for all your active duty if you receive retirement pay for nonregular military service (for example, service in the military reserves or disability pay from the U.S. Department of Veterans Affairs that is not paid in place of retirement benefits).

If you are eligible for a regular military pension, your service purchase will be limited to 20 quarters maximum.

QUALIFIED OR NONQUALIFIED SERVICE PURCHASES

The following meet requirements for a qualified service purchase only if you are not eligible for a retirement benefit for the period of employment related to the purchase. If you are eligible for a retirement benefit based on the employment, you may still purchase service, but it will be a nonqualified service purchase. Limits on buying nonqualified service are explained below.

You may purchase IPERS service credit for other U.S. public employment if you are a vested IPERS member with at least 4 quarters of covered wages on file. This employment can be as a public employee in another state or the federal government comparable to IPERS-covered employment, or public employment within Iowa that was not covered by IPERS.

You can purchase service on the basis of employment with optional IPERS coverage if you meet all of these conditions:

• Are a vested IPERS member with at least 4 quarters of covered wages on file.
• Were employed before January 1, 1999, in a position eligible for optional IPERS coverage.
• Have not previously elected coverage for that employment.

NONQUALIFIED SERVICE PURCHASES

You must have at least 20 quarters of covered wages on file with IPERS to buy nonqualified service. You may purchase up to 20 quarters of nonqualified service.

Nonqualified service is:

• Service that is not considered a qualified service purchase as described above.
• Periods of time in which you did not perform any services at all (known as “air time”).
• Service in public employment (excluding military service) for which you remain eligible for retirement benefits.

FREE SERVICE CREDIT

IPERS will provide you with service credit at no cost for the following types of service:

• Family and medical leaves of absence granted under standards established by the federal Family and Medical Leave Act.
• Service in the U.S. Armed Forces, provided you worked in covered employment immediately before entering the Armed Forces and you return to covered employment within 1 year after leaving active-duty service in the Armed Forces.¹
• Leaves of absence granted before July 1998.

If you think you qualify for free service credit, contact IPERS.

¹ Free service credit will also be granted for your period of military leave if you do not return to IPERS-covered employment because of an active duty injury or disease that results in death. In order to receive this free service credit, the injury or disease must be sustained in a combat zone, hazardous duty area, or during a contingency operation and the death must occur within 2 years after you suffer the injury or disease.