Service Credit
Social Security Advancement Option

Service Credit

A Member’s retirement allowance is based, in part, on the amount of qualifying employment service time accumulated prior to retirement. It is one of three factors used to determine the amount of a member’s allowance. The other two factors are age at retirement and final compensation.

How Service Credit Is Accumulated:

To be a member of the San Joaquin County Employees’ Retirement Association, you must be appointed to a permanent full time position of the County of San Joaquin or any district included in this Retirement Association. Specific ordinances of the County or resolutions of the districts state that membership begins after:

1. Successful completion of an employment physical, if required for that job classification.
2. Membership commences on the first day of the next pay period following appointment to a permanent full time position.

Generally, by 52 weeks of paid full-time work equals one year of service credit.

Types of Service Credit:

Previous County Service

Members of this Retirement Association may be eligible to purchase and receive service credit for previous county employment for which they have not already received retirement service credit. Essentially, there are two categories: Temporary Service and Prior Permanent Service. The purchase of this service counts toward vesting for certain benefits and it is included in determining when a member meets the minimum criteria entitling her/him to certain retirement benefits.

Temporary Service

Paid service with the County, not considered as permanent full time employment, may be purchased once the individual becomes an active member of this retirement system. Generally, paid service as a temporary, intermittent, seasonal or contract employment may qualify. However, if this type of employment occurred between two permanent employment periods while the employee maintained membership in the association then it cannot be purchased.

In general, but not in all cases, the cost to purchase service for which the member has not received service credit consists of the contributions the employee would have made had the employee been an active member during that period of time. This is accomplished by utilizing the contribution rate in effect on the actual date of membership, the compensation earned by the member at time of membership and the interest which would have accumulated on the contributions.

Prior Permanent Service

Former permanent employment service credit (as an active member) where the individual has withdrawn contributions can be re-credited. Redeposit of contributions previously withdrawn, plus interest which would have accrued on those contributions had they been left on deposit, will regain service credit for prior County service.

Public Service

Members may be eligible to purchase and receive retirement service credit for employment with certain other public agencies. Public agency service credit that can be purchased is limited but includes those agencies which have a reciprocal relationship with San Joaquin County Employees’ Retirement Association (see the Retirement Plan Information Booklet, section entitled: “Reciprocal Benefits Period”). Those agencies in California as of January 1993 are as follows:

• All public agencies in the California Public Employees Retirement System (PERS)

• 1937 Act County Systems (inclusive of districts affiliated with one of these county systems):

Alameda Mendocino Santa Barbara
Contra Costa Merced Sonoma
Fresno Orange Stanislaus
Imperial Sacramento Tulare
Kern San Bernardino Ventura
Los Angeles San Diego
Marin San Mateo

• Also included for purposes of public agency service credit are:

- The University of California
- Service with the Federal Civil Service System
- Active Military Service
- Active Merchant Marine Service during World War II
- Government of the United States of America
- The State of California, or any department or agency thereof
- All Cities and counties in the State of California
- Any public corporation, municipal corporation, or public district which is located in whole or part within the County of San Joaquin

A member is not allowed to purchase service credit with this Retirement Association for service with a public agency from which they are eligible to receive a pension. This Retirement Association will need official verification from the former public agency of service time, and whether they have received credit for that time towards the other agency’s retirement system. For members of this association the time may be purchased with this association as public service credit if not already credited with the former retirement system. Public service purchased will not count towards vesting or be included in determining when a member becomes eligible for retirement benefits (service or disability retirement, deferred retirement or the death benefit). That qualifying service must be established in this Retirement Association or through a reciprocity arrangement with another public agency. However, while public service cannot count toward vesting the service does count directly toward years of service for determining retirement benefits.

The cost to purchase public service consists of twice the contributions the member would have made to the Retirement Association for the length of time being purchased, utilizing the contribution rate compensation earned and first applicable upon commencement of membership, plus interest which would have accrued on those contributions since the date of membership.

Medical Leave of Absence

You may buy back a period not to exceed twelve (12) consecutive months in any one absence on medical leave of absence without pay. You must return to work from your medical leave into a permanent full-time position covered by the Retirement Association to be eligible to buy back this service credit.

Military Leave of Absence

If you return to work into a permanent full-time position covered by the Retirement Association, you may buy back military service.

Payment Methods

The purchase of additional service credit may be made by lump sum payment or through payroll deductions for a period not to exceed five (5) years, depending upon the type of service purchased. It is the member’s responsibility to provide the retirement office all supporting documentation relative to the purchase of additional service credit. Computation of the cost to purchase additional service credit is generally completed within four (4) to six (6) weeks of the request. Delays often occur in trying to obtain and verify former employment. The more precise the information you provide, the faster will be the Retirement Office’s processing. The purchase of additional prior service must be paid in full prior to retirement in order to gain service credit.

To obtain an estimate of the costs for additional service credit, contact the Retirement Office and request form #ASC001 “Information on Costs for Additional Service Credit”.

SOCIAL SECURITY ADVANCEMENT OPTION

What Is the Social Security Advancement Option?
This advancement is an optional retirement allowance benefit for active or deferred members in Social Security who retire before age 62. It is coordinated with projected Social Security Age 62 Benefits. This advance is temporary and in addition to the basic amount of the retirement allowance.

Am I eligible?
In order to be eligible for the Social Security Advancement option, you must be an active member or a safety member under the Social Security Program, eligible for service retirement and under the age of 62. You are not eligible for the Social Security Advancement if you are to receive a service connected or non-service connected disability retirement benefit.

How does it work?
If you are covered by Social Security and retire from County or special district service before age 62, you may receive temporary additional income from the Retirement Association until you reach age 62 and become eligible for Social Security. This temporary annuity is an advance on the amount Social Security estimates you will be entitled to receive at age 62. At age 62 your SJCERA retirement benefit would be reduced for the rest of your life.

Temporary annuity factors, as determined by the Retirement Association’s Actuaries and based on your age at retirement, are applied to this Social Security estimate to arrive at the amount of your advance from the Retirement Association.

This temporary annuity will provide you with additional income until age 62 at which time your retirement allowance will be reduced and you begin receiving a benefit from the Social Security system.

You should contact the Social Security Office to obtain an estimate of benefits available to you at age 62. The request should be made at least six months prior to your anticipated retirement date. You can contact your Social Security Office or pick up a “Request for Statement of Earnings” form from the Retirement Office and mail it to Social Security Administration.

Could you provide an example?
*Mr. A and Mr. B both retire at age 60 as general members, with a basic (unmodified) retirement allowance of $1,921.19 per month, and an estimate from Social Security Administration (SSA) benefit of $352.00 per month at age 62. Mr. A chooses the Social Security Advancement option, Mr. B does not. Mr. A’s calculation for a monthly advancement benefit would be 81.15% of the SSA estimate. This percentage factor is developed by the retirement association’s actuaries and can be found in the Social Security Advancement Tables (which are in the “Retirement Plan Information” Booklet Table 4 for general members or Table 5 for safety members under Social Security and are reproduced in this booklet).

 

* This illustration is presented without the cost of living factor
Mr. A Mr. B
With Without
(SS Advance) (SS Advance)

SJCERA allowancebefore age 62:
Basic SJCERA monthly allowance: $1,921.19 $1,921.19 Plus (81.15%x$352 SSA) +285.65 0.00
SJCERA Allowance before age 62: $2,206.84 $1,921.19

SJCERA allowance at and
after age 62:
Allowance was: $2,206.84 $1,921.19 less $352 full SSA: -352.00 0.00
Allowance at and after age 62: $1,854.84 $1,921.19

Plus actual Social Security
benefit: +352.00 +352.00
Income at and after
age 62: $2,206.84 $2,273.19

What’s the advantage?
Mr. A’s income at retirement, with the Social Security Advancement option, is increased by $285.65 per month over the basic amount until he reaches age 62 and begins receiving Social Security. Mr. A will receive $6,855.60 more than Mr. B in the first 2 years (285.65 x 24 months) with this option. Mr. A will have received more money from the Retirement Association than Mr. B until they are nearly 62 years old. Then Mr. B will receive $66.35 more per month than Mr. A for life ($1,921.19 - $1,854.84 = $66.35).

Why should I consider this option?
The selection of this option may be dependent on your life expectancy, and whether it is to your advantage to receive a higher retirement income prior to age 62.

What impact does this have on my spouse’s benefits?
If a member receiving the Social Security Advancement option dies before or after age 62, the eligible surviving spouse or minor children will receive 60% of the unmodified allowance the member would have received had the member not selected the Social Security Advancement option (or 60% of $1,921.19 in the above example).

Calculations:

Members can obtain copies of the “Retirement Plan Information” Booklet from the Retirement office to learn how to calculate their own unmodified retirement allowance as well as the Social Security Advancement.

How about another example?
During 1995, one general member retired at age 55 3/4 with a monthly unmodified retirement allowance of $1,135.23 and a social security benefit estimate of $675.00 per month:

Unmodified monthly retirement allowance $1,135.23
Estimated Social Security benefit at age 62 is $675 x .5320 +359.10
[age factor from Social Security Advancement table]
Monthly allowance before age 62: $1,494.33

At age 62 the SJCERA would stop paying the advance -675.00 SJCERA Monthly from SJCERA after age 62 $ 819.33

Member applies and begins receiving Social Security Monthly allowance of +675.00

SJCERA and Social Security at age 62: $1,494.33

How do I apply?
You must contact the Social Security Administration at least six months prior to your anticipated retirement date to obtain an estimate of your benefit at age 62. Please plan to make an appointment with the staff of SJCERA approximately 30 to 60 days before you plan to retire. Bring the Social Security information to your retirement conference with the Retirement Office staff. They will provide you with estimates for this benefit option.

A Final Note.....

At age 62, the SJCERA Social Security Advancement option will automatically be reduced, regardless of whether or not you apply for Social Security.

Since the Social Security Administration will not make your benefit retroactive, you should contact their office at least three months before your 62nd birthday. This will ensure that your Social Security benefit begins the first month you are eligible - the month following your 62nd birthday.