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Service Purchase Changes

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This page is designed to provide yo​​u with key information about the modifications to the service purchase rules that take effect January 1, 2024.

On May 29, 2023, SB 1444 was signed into law. This legislative achievement resulted from a collaborative effort between COAERS and the City of Austin, aimed at establishing a comprehensive framework for plan sustainability. The overarching goal was to enhance the financial health and stability of the retirement system and ensure the delivery of promised benefits to all members.

As result of the legislation, various changes will take effect in several policy areas, including benefits. It's essential to note that these changes do not alter the retirement benefits earned by members or service purchases already completed.


What is a Service Purchase?

At the time of retirement, a member’s lifetime benefit with COAERS is determined by a formula which includes salary, years of service credit, and the membership group you belong to. While the primary way to obtain service credit is by working in a regular full-time position and making mandatory contributions to the System, eligible active members can also establish additional service credit by purchasing it. There are a number of ways in which you may be able to purchase service credit:


What are the Rule Changes Affecting Service Credit Purchases?

Beginning January 1, 2024, the following service purchases can only be made at retirement:

  • Supplementary service credit
  • Military service
  • Non-contributory service

The following service purchases are not affected by the rule change:

  • Prior service - this purchase process remains the same. Members can complete a purchase at any time.
  • Sick leave - this purchase process remains the same. At retirement, employees may pay to convert their sick time to service credits. Read more about sick leave purchase.



What are the rule changes to the benefit policies? 

Here is a summary of the changes that will go into effect beginning January 1, 2024:

  • Military service purchase: remove the 75% subsidy and allow purchase only at retirement
  • Supplemental service purchase: allow purchase only at retirement
  • Non-contributory service purchase: allow purchase only at retirement
  • Prior service buyback: Change the interest rate from the current statutory rate (member interest credit rate divided by .75) to the assumed rate of return (currently 6.75%). Members can purchase this at any time.
  • Sick leave purchase: This purchase remains the same.  Employees pay their contributions for the hours of sick leave purchased for service credits at retirement, which is based upon the employee contribution rate in effect at the time. 
When will the changes take effect? 

The benefit policy changes will take effect starting January 1, 2024.

Who will the changes impact? 

 The changes will impact all current active members in both Group A and Group B.

How much does supplementary service credit cost? 

Supplementary service can be expensive.  The cost is calculated by determining the present value of your future retirement benefit with and without the purchase. The difference is what you pay. The range of costs for supplementary service can vary from tens of thousands of dollars in some cases or be in the hundreds of thousands of dollars for others. The cost for the purchase varies greatly depending on the member and their particular salary. Members can log into their MemberDirect account to run a supplementary service credit purchase estimate.

How can I get an estimate of the cost? 

Via MemberDirect
For the quickest way to receive an estimate, log into your MemberDirect account and select "Estimate a Purchase" to run a variety of service purchase estimates.


Submit a form
Members can also complete a "Request a Purchase Calculation Estimate" and submit the request to the COAERS Member Services at The form can be located on our website at

For additional assistance, contact or (512) 458-2551.

Will retirees see any changes or reductions to their monthly benefit payment? 

No, retirees will not see any reductions or changes to their monthly benefit as a result of the rule changes.