Episode 32 – How interruptive military service can add to your retirement credit
Episode transcript:
[music intro]
Jenny
Welcome back to Fund Your Future with DRS. Now, you may or may not have heard that there was some legislation passed this year that allows some employees earn free retirement service credit if their employment was interrupted by service in the U.S. military. And so today we’re getting all the details on this from Kent, who works here at DRS as a Management Analyst. Welcome, Kent.
Kent
Thank you.
Seth
So, Kent. House Bill 1007 was signed by the governor and is now law. What changes did it make?
Kent
This bill added a couple of things. First, if you received an expeditionary medal during your service while being on leave from your employer, you now meet the qualifications of receiving a free service credit for that time. And secondly, it made the addition retroactive to members that have retired and may not have received free service credit due to the previous requirements, but now they qualify.
Seth
So, Kent, I know you and a couple of other folks on our team have looked back through a lot of forms that previously people have sent in. So, we’re trying to be proactive so people don’t necessarily have to follow up with us again. But what are the steps that a person would need to do if they’ve never been in contact with us before about time in the military?
Kent
Yeah, I would say the biggest thing is to give us a call, ask one of our representatives about their time, if they’ve had an interrupted service with their military and they’ve been away from their employer for that service. And we can take a look at their account and try to figure out if that time lines up with that.
And if it does, we can get more information from them about their time in the military service and then ask them to send in documentation for us. What that consists of would probably be the DD 214 the Department of Defense DD214 form that gives us all their information on where they were serving and all the stuff we need, to figure out whether they served to begin with to see if we have that.
And then with this bill to see if they actually get the time for free. And then they’d send that in to us and we would look at it, talk to their employer. And once we got that back, we could do the determination to be able to send that bill to them. Or if they got it for free, then just to let them know that they get that free service credit and it will be applied to their account.
Seth
I used to work with somebody here, DRS who always said, “You can never have enough service credit.” People always want more service credit. And so, I think this is exciting news for people who have served in the military or had a break in their public employment to go back to military service. We get a lot of folks who served in the military and then maybe go into the reserves and they’re working for a city or a county or something like that, a school district.
And then they are called up to active duty for a period of time and they miss out on retirement credit during that time. Those orders fall under certain categories. They might get that retirement credit for free. So that’s awesome.
Jenny
So, what about for those folks who maybe worked in the military before they started working for Washington state.
Kent
For those purposes, for Plan 2 and Plan 3 members, military service must be interruptive to qualify to receive service credit for that time period. For example, if you’re in active duty, then you separate from service and you come to Washington State and work for a state agency. That time would not count for any kind of service credit. It has to be after you started working for a DRS covered employer and then took that time to serve or got called up to serve and then came back to work for a DRS covered employer. And that’s the time that we can actually get the service credit back for them.
Seth
So, you use the word I really like: interruptive. It interrupted your public service. And if it did interrupt your public service, you might have the opportunity to either get that credit for free or purchase that credit. And so, I wanted to ask you, Kent, specifically about… we’re not going to be able to get into the specifics of each individual person’s…
I know, as you said, people will send in their military forms, their DD 214 and our team looks over them to see whether or not they qualify for the free credit. But could you just kind of give us in general what might qualify someone to earn free credit for military service?
Kent
Yeah, the bill itself, because it actually added a couple of things on to it. So, it used to say that if you were serving and you earned a campaign medal, that you could be possibly able to get free service. And now the new portion of this, the House Bill 1007, actually adds on to that, that if you received an expeditionary medal, that you can receive free service credit and all that shows up on your DD 214 if you earn that award while you are serving.
Seth
That’s a good clarification. I know we previously saw a lot of folks who had earned a… I’m going to get hopefully get the term right: The Global War on Terror Expeditionary Medal for their service. And previously that wasn’t a medal that would qualify for free service. And now with this law change, it will allow folks who have earned that medal, earn that medal while serving in interruptive time period.
It will allow them to earn that credit for free, which is great. Could you tell us a little bit about what that process looks like? You said you call into DRS. We would review their history with DRS. We would ask them to send their DD 214 in to us. What happens after that?
Kent
Yeah, after we receive that information, then we will request information from the employer and they will confirm that you were on authorized leave for military service. And that portion of it, because we need to get some information from them. And once we have that information back, then we’ll totally evaluate your account and find out which, if any, that you are qualified for.
If you are qualified to get that as a free interruptive service, then we would basically just be able to make that for you and grant you those service credits to your account. If it was a situation where you would need to pay for that service credit time frame, we would be able to create the bill for you and send it out to you.
Totally an optional bill. You can either pay it or not pay it, but if you do, then you would also receive those service credits for the time that you missed.
Seth
That’s a really good point about still being able to buy the time, even if it’s not free. I know… I think, Jenny, you and I have talked to a number of people on the podcast about when people have an absence from employment and they miss out on retirement credit. When you’re young, it doesn’t seem like a big deal.
And then when you get closer to retirement, you think: “Oh I wish I would have had that time and my pension benefit would be a little bit higher.” So, if you get that optional bill, it’s something to really consider. Maybe if you have Deferred Comp, you can use that to pay for your bill and then kind of do a favor to your future self.
Kent
Yeah, one thing to go along with that too, is that as soon as you come back from serving in the military, from a from a leave timeframe, it’s really good to give us a call because if you do have to pay for it, you really only have about five years to get a good deal for that time frame, to get that service credit for much less than you would if you wait longer than that.
If you do wait longer than five years after you return to service for the state, then it can be very, very expensive.
Seth
Yeah, that’s a really good point. Just in general, if not every one of our listeners is going to have time in the military. But lots of people will have a time period where they go out for an injury or they’re taking care of a child or they’re taking care of an aging parent. And when you come back to employment, it’s a great time to contact DRS, figure out if you missed some service credit, what it would cost to purchase that time back.
In the case of military credit, you might get it for free, but for other folks, they might want to see what that looks like. And if they have some way to pay for that, that can really help their help their future self.
Jenny
Yeah. And like you said, making sure you do that within five years. And I think from what I remember of our previous conversations, that applies to all of the other types of service credit as well, is that sort of five-year window.
Seth
Five years is super common. I think there may be one or two bills, but…
Jenny
Just do it sooner than later.
Seth
Yeah, yeah, yeah, exactly. And it definitely can make it less expensive.
Jenny
So, if one of our listeners did want to go learn more, where would probably be the best place to do that?
Kent
Yeah, I think the best place is either to go to the website and look underneath your plan and there will be a sub header on there that says military service. And if you don’t find enough information there and stuff, just please give us a call and tell us your story and we’ll help you out for sure.
Seth
Great. Thanks for coming in Kent.
Kent
Thank you.
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Disclaimer
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