Creditable Service

Your retirement allowance is calculated using creditable service — the total years of public service the board credits to you when you retire. The formula in MGL Chapter 32 § 5 multiplies your average annual rate of regular compensation by your creditable service and your age factor:

benefit = (average salary) × (creditable service in years) × (age factor)

So every additional year of credited service directly increases your benefit.

What counts as creditable service

Three sources of creditable service:

1. Active membership in a Massachusetts contributory retirement system. Each year you contribute to the system from regular compensation gives you one year of credit. Members hired before April 2, 2012 use the pre-2012 formula; post-2012 members use the post-reform formula. Both accumulate creditable service the same way.
2. Purchased service for past public service that wasn't covered at the time. See Service Purchase and Makeup Payments for what's eligible: prior public service, military service, FMLA leave, and several other categories defined by statute.
3. Transferred service from another Massachusetts contributory retirement system, if you moved between MA systems while still a member (§ 3(8)(a)) and did not take a refund of your contributions (PERAC Memo #36/2011).

What does not count

• Federal employment other than military service.
• Out-of-state public service (a few specific exceptions exist; ask before assuming).
• Private employment, even with a public-sector contractor.
• Periods you were on unpaid leave without buyback.
• Prior service for which you took a refund and didn't repay (you can still buy it back — see Service Purchase).

Caps on creditable service

Massachusetts public retirement allowances are capped at 80% of average salary under MGL Chapter 32 § 5(2)(c). At the maximum age factor of 2.5%, this cap is reached at about 32 years of creditable service (2.5% × 32 = 80%); with a lower age factor it takes longer; you can keep working past that point but additional years won't increase your monthly benefit.

How service is reported

Each year, our office reports your year-to-date creditable service to PERAC and to the Member Portal. Your annual statement shows your service and contributions.

Verify your statement against your own records. Pay-period gaps, leaves of absence not properly coded as "with-credit", and prior service that should have been transferred but wasn't are the most common sources of error. Discrepancies can be corrected — but the further back the period, the more documentation we'll need.

Counseling

If you're uncertain whether a past period of service is creditable, schedule a counseling appointment. Bring whatever paperwork you have (W-2s, employment verifications, prior retirement-system statements). The board will determine whether the service is eligible and, if buyback is needed, what it would cost.