Buying ASRS service credit

What you can buy

• Prior public employment. Prior employment with the U.S. government, a state or territory, or a political subdivision (not prison work while incarcerated). Not allowed for a period that earns or could earn a benefit from another public retirement system. A.R.S. 38-743(A), (C)
• Unpaid leave. Up to 1 year of an officially granted unpaid leave, if the member was active when the leave was granted, returns to the same employer (unless disabled or no position), and the employer certifies the leave benefits it. A.R.S. 38-744(A)(1)-(6)
• Military service. Active military service with honorable separation (DD-214), if not yet eligible for a military retirement benefit. Separately, members called up from ASRS employment have up to 60 months credited with employer-paid contributions (USERRA), at no cost to the member. ASRS Session 3, slide 10; A.R.S. 38-745(A), (D)-(I)
• A refund you took. Forfeited service (from a refund) can be bought back at the refund amount plus compound interest; no minimum service is needed. A member who took a refund and is rehired earns service only from the new hire date, but may redeposit the refund plus interest at the board's actuarial rate to restore the old service; a partial redeposit restores service proportionately. The member is then under the rules in effect at the most recent reemployment (except the pre-1984 AMC rule). ASRS Session 3, slide 6; A.R.S. 38-742(B); ASRS Employer Basics 2025, p. 24; A.R.S. 38-742(A)-(B)

Cost and limits

• Public service, leave without pay, and military service are bought at the present value of the additional benefit the service produces, using board-approved actuarial assumptions. ASRS prices a purchase at actuarial present value using the member's service to the nearest month, age to the nearest day, and current pay. ASRS Session 3, slide 7; A.R.S. 38-743(B); A.R.S. 38-744(B); A.R.S. 38-745(C)
• Members whose membership date is on or after July 1, 2010 need 5 years of ASRS credited service before buying public service, leave, or military service. ASRS Session 3, slides 7-8; A.R.S. 38-743(D); A.R.S. 38-744(D); A.R.S. 38-745(A)(3)
• Members whose membership date is on or after July 20, 2011 may buy no more than 5 years (60 months) of each type of service; members before July 20, 2011 have no such limit. ASRS Session 3, slides 7-8; A.R.S. 38-743(A); A.R.S. 38-744(A)(4); A.R.S. 38-745(B)
• Purchases can be paid by lump sum, rollover or trustee transfer from a 401(a), 403(a), 403(b) or governmental 457(b) plan, IRA transfer, installments under board rule, or pre-tax payroll deduction through the employer. Service is credited only as payments are received; a member who retires before finishing gets credit only for what was paid. A.R.S. 38-747(A)-(B), (H)-(I), (K), (M)

The purchase limit starts at July 20, 2011, not July 1. ASRS's training slides use the same date. ASRS Session 3, slides 7-8; A.R.S. 38-743(A); A.R.S. 38-744(A)(4); A.R.S. 38-745(B)

How service is credited

• No more than one year of credited service in any fiscal year. ASRS Employer Basics 2025, p. 9; A.R.S. 38-739(A)
• Each month with contributions counts as one month of service credit, however few days were worked. School employees earn a full year in 9 months (August to April); nobody earns more than 1.0 year in a fiscal year. ASRS Employer Basics 2025, p. 9; A.R.S. 38-739(B)-(C); A.R.S. 38-711(31)(a)-(b)
• With two or more concurrent contracts, the longest contract decides service. A.R.S. 38-739(D)
• Members on paid sabbatical make contributions and are treated as full time. A.R.S. 38-739(E)
• If an employer under-reported contributions, the member pays the missed member contributions and the employer pays its share plus interest; corrections reach back 15 years, and older service is treated as public service credit to be purchased under 38-743. A.R.S. 38-738(B)-(D)
• An inactive member (contributions left on deposit) who is rehired returns to active status, and all service counts at retirement. A.R.S. 38-741(A)-(B)

From ASRS and the law

• You can buy credit for prior public employment (federal, state or local government elsewhere), up to one year of unpaid leave, and active military service.ASRS Session 3, slides 7-10; A.R.S. 38-743(A); A.R.S. 38-744(A); A.R.S. 38-745(A)
• The cost is the actuarial present value of the extra benefit, using your service to the nearest month, your age to the nearest day and your current pay.ASRS Session 3, slide 7; A.R.S. 38-743(B); A.R.S. 38-744(B); A.R.S. 38-745(C)
• If your membership began on or after July 1, 2010, you need 5 years of ASRS service before you can buy service.ASRS Session 3, slides 7-8; A.R.S. 38-743(D); A.R.S. 38-744(D); A.R.S. 38-745(A)(3)
• If your membership began on or after July 20, 2011, you can buy at most 5 years of each type of service. Earlier members have no such limit.ASRS Session 3, slides 7-8; A.R.S. 38-743(A); A.R.S. 38-744(A)(4); A.R.S. 38-745(B)
• You can't buy service that earns, or could earn, a pension from another public retirement system.A.R.S. 38-743(C); A.R.S. 38-744(C)
• If you took a refund and came back, you can buy back the forfeited service at the refund amount plus compound interest. You still get a new membership date, so the rules for that date apply.ASRS Session 3, slide 6; ASRS Employer Basics 2025, p. 24; A.R.S. 38-742(B)
• You can pay with a lump sum, a rollover from a 403(b), 457(b) or similar plan, installments, or pre-tax payroll deduction. Credit is given only for what has been paid when you retire.A.R.S. 38-747(B), (H), (M)
• If you are called to active military duty from an ASRS job, your employer pays the contributions and you get up to 60 months of credit at no cost.ASRS Session 3, slide 10; A.R.S. 38-745(D)-(I)

Extra years feed straight into the benefit formula; see what one more year adds to compare buying with working longer. If you are thinking about a refund instead, read leaving: refund or keep your account first.

Questions

Try it with more years → What one more year adds