TFN Trust Fund News Vol. Service cannot be purchased after termination of employment. This is because the cost of qualifying and forfeited service are based on a formula that uses the highest annual earnings and an average of the three highest years of earnings, respectively. The cost of purchasing other governmental service is based on a much more complex actuarial calculation. In general, the higher the annual earnings, the higher the cost of purchasing service.
Some participants decide to wait to purchase service until just before they retire.
That way they know exactly how much the additional service will increase their retirement benefit and what the payback period is for the cost they paid. Other participants have elected to make additional contributions to the WRS and use these specific contributions and accumulated interest to purchase creditable service later in their employment. Over the years the accrued interest helps to cover the cost of the service purchase. In addition, the interest credits usually exceed the percentage increases in their annual earnings so the actual cost to the participant is reduced. Under Act 11 all future contributions, whether regular or additional, made by active employees and employers will be credited with the full interest earned in the Trust Fund.