5.01: How Service Credit is Earned or Gained
Service credit is based on the number of hours employees work for a reporting unit. It is important to report all hours an employee has worked for your reporting unit, and hours reported must relate realistically to wages reported. The retirement system limits the amount of service credit recognized to prevent the super accrual of service. Hours and service credit accruals are capped per administrative rule. After you report hours to the retirement system, ORS applies the hours cap and converts those hours to retirement service credit. In general, members earn one year of service credit when they work 1,020 hours within the July 1 through June 30 school fiscal year. This does not mean that a full year of credit will be granted when an individual has worked 1,020 or more hours in the school fiscal year. (The 1,020 figure is the result of multiplying 170 days by six hours per day.) For example, an individual who worked 130 days between July 1 and December 31 for eight hours per day (1,040) is not eligible for one year of service credit even though the hours worked exceeds 1,020, because of service credit limits.
Per-pay period caps apply. Your employees can’t earn more than one year of service credit in a given school fiscal year and no more than 60 hours can be credited in a two-week pay period.
For example, administrative employees may work 2,080 hours a year, but will be limited to one year of service credit because the annual hours cap is 1,020.
As the chart below illustrates, if your employees are paid every week, they cannot be credited with more than 30 hours, worth 0.0294 years of service credit. The cap is 60 hours or .0588 if your employees are on a two-week pay cycle.
|Period||Hours||Service Credit Earned|
When employees work less than a full school year or are considered part-time because they work less than a typical school day, they earn proportional credit. See the chart below to see how service credit is earned for a variety of work schedules after considering the caps.
|Days Worked||Hours Per Day||Hours Creditable||Service Credit Earned|
To reestablish membership in the retirement system, a member must have creditable service in a pay period. Creditable service is the minimum number of hours normally required in the position being reported. For example: If a substitute teacher is normally required to work a 4-hour shift, an employer can rehire an inactive member and report 4 hours for that shift.
Last updated: 05/24/2013