Retirement may be imminent or many years away, but a new change in TRS rules could require quick action on your part. The laws and rules that govern the purchase of service credit have changed, and employees have a two-year window to make decisions that could cost or save thousands of dollars.

Many school employees have available service credit that has not yet been purchased. Substitute service, out-of-state teaching service, military service, accumulated sick leave, and withdrawn service (e.g., taking your TRS money out when you leave teaching for a period of time) are among the most common types. A bill passed in the 2011 legislative session will increase the costs of purchasing most types of service credit, so if you have any such service available to you, it will likely be to your advantage to begin the process of purchasing it as soon as possible. (Note: the cost of purchasing military and sick leave credit did not increase.)

The new law includes a two-year transition period that will allow employees to avoid the increased costs by purchasing the credit, or submitting an installment plan agreement, by Aug. 31, 2013. Because different types of service credit incur different costs and involve different eligibility requirements, and because individuals have unique situations, it is important that you contact TRS as soon as possible to determine the best course of action for your particular circumstances. A TRS benefits counselor (1-800-223-8778) can help calculate the cost of purchasing service credit.

Keep in mind not only the August 2013 deadline, but also the general rule of thumb that the cost of purchasing most types of service credit increases as time passes, so purchasing sooner rather than later is preferable, when possible.

In addition to contacting a TRS benefits counselor, we recommend checking the TRS website at www.trs.state.tx.us) to review the “TRS Service Credit” brochure available via the “TRS publications” link.