Service credit under the Educational Retirement Act may be either “earned” or allowed”. Earned service credit is granted for the time when a member is contributing to ERA, or for employment prior to July 1, 1957. The member thus receives earned service credit for all the time he/she has been employed in New Mexico as a member of the educational retirement plan. In order to earn service credit a member must work more than .25 of the full time equivalent for the job. The member contributes 7.9% (after 7-1-08) of his/her pre-tax earnings through a payroll deduction.
Sabbatical Leave and Leave of Absence
Earned service credit is granted for paid sabbatical leave for which contributions have been made. Service time is not earned for unpaid sabbatical leave or leave of absence.
Restoration of Earned Service Credit
A member may restore his/her contributions that were previously refunded and receive credit for the years involved by “buying back” as many years as desired up to the maximum withdrawn. Active or inactive members may buy back this service time. Withdrawn or refunded service time may not be purchased after the member has retired from ERB. Employees may buy back earned service in one of two ways:
(1) members may make a lump sum payment to buy back all or part of their withdrawn service; or
(2) members may “roll-over” retirement contributions from another plan to the ERB plan to the extent allowed by the IRS. This provision allows members to transfer funds from another retirement plan like ours, which is a 401(A) plan, a 403(b), or an IRA.
If the member subsequently withdraws contributions or the member dies prior to his or her retirement, the interest paid on restored contributions is not refundable
