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Purchase of prior or uncredited military service credit

If you are a vested, active member of TRA, and have prior or uncredited military service, you may wish to purchase service credit toward your retirement for all or a portion of that time.  The purchase authority was passed during the 2008 legislative session (Minnesota Statutes 354.543).

You may purchase all or a portion of your military service (initial period of enlistment, induction, or call to active duty) if you:

* “Active TRA member” means a teacher who is actively teaching with a TRA-eligible employer.  This includes a member on a leave of absence, or who is participating in the Part-Time Teacher Program.  A member receiving disability benefits from TRA may not purchase service.

The purchase cost is calculated using member and employer contributions, plus interest; or the actuarial cost method, whichever is higher.  Actuarial cost is generally higher, since it reflects the expected increase of time you will receive retirement benefits and the expected decrease in the length of time you and your employer will make contributions to TRA.  Actuarial cost is determined using your current salary, assumptions for future salaries, service credit, age and the date of purchase.

You are required to repay all refunds to any Minnesota public retirement system, including TRA, prior to purchasing prior military service.

If you wish to purchase all or a portion of your prior military service, you must complete and sign an Application to Purchase Prior Military Service (TRA-6030) and submit it along with a copy of your DD‑214 form to TRA.  TRA will provide you with the cost to purchase your prior military service and estimates demonstrating the impact this purchase will have on your monthly retirement benefit.  The cost estimate will include the date by which payment must be received.

You have the option to purchase service credit with personal funds or to transfer funds on a pre-tax basis from a traditional IRA or other qualified pension plans. An eligible pension plan includes a plan qualified under section 401(a) of the Internal Revenue Code, including a 401(k) plan, profit-sharing plan, defined benefit plan, stock bonus plan, and money purchase plan; a section 403(a) annuity plan, a section 403(b) tax-sheltered annuity; and an eligible section 457(b) plan maintained by a governmental employer (governmental 457 plan).

Purchase of prior military service will be complete once full payment has been received. 

 

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