5.01: How service credit is earned or gained

5.01: How service credit is earned or gained

Service credit is based on the number of hours an employee worked for a reporting unit. It is important to report all hours an employee has worked for your reporting unit, and hours reported must relate to wages paid. 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 1 year of service credit when they work 1,020 hours within the July 1 through June 30 school fiscal year. Due to the hours cap, a full year of credit will not always be granted when an individual has worked 1,020 or more hours in the school fiscal year.

For example: An individual who worked 130 days between July 1 and Dec. 31 for eight hours per day (1,040) is not eligible for 1 year of service credit even though the hours worked exceed 1,020, because of service credit limits.

Per-pay period caps apply. Your employees can't earn more than 1 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 1 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.

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.

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.

Last updated: 05/24/2013