Updated October 21, 2026. Quick answer: The Montana PERS handbook says a member can purchase service at any time before retirement and that doing so may enhance the retirement benefit. Some types need no vesting (refunded, retroactive, Montana public service, absence for illness or injury), while others need five years of membership service (one-for-five, military, volunteer and other public service). Current law caps the purchase of military, reserve military, additional and other public service at a combined five years.
What this covers
The handbook’s Purchase of Service section opens “As a PERS member, you can purchase service at any time before retirement.” It continues “Purchasing service may enhance your retirement benefit.” This page follows that section and quotes it. The wider set of Montana PERS choices is on Montana PERS retirement decisions and public pension retirement decisions.
Types you can buy without being vested
The handbook says “You do not need to be vested to purchase the following types of service:” Each right-hand cell is a sentence from the handbook.
| Type | What the handbook says |
|---|---|
| Refunded service | “you can purchase the refunded service prior to retirement if you are an active member.” |
| Retroactive service | “Retroactive service is service with a PERS-covered employer that wasn’t credited to PERS at that time.” |
| Montana public service | “you may be eligible to purchase that service in PERS at actuarial cost.” |
| Absence due to illness or injury | “The time which can be purchased may not exceed five years.” |
Types that need five years of membership service
The handbook says “You must have five years of membership service to purchase the following types of service:”
| Type | What the handbook says |
|---|---|
| “One-for-Five” service | “For each five-year period of membership service, you can buy one year of service credit up to five years.” |
| Military or reserve military | “you may purchase up to five years of your active military or reserve military service at the actuarial cost.” |
| Volunteer service | “You may purchase up to five years of your volunteer service in a United States service program, such as the Peace Corps.” |
| Other public service | “You may buy service covered by another state, local or federal government retirement system.” |
It adds that one-for-five service “is not membership service and cannot be used to make you eligible to retire or to purchase other types of service.” The statute states the limit differently. Section 19-3-513(3) says service credit purchased under it “is not membership service and may not be used to qualify a member for service retirement or to bring a member to 25 years of membership service for the purposes of 19-3-902 or 19-3-904”, and section 19-3-513(4) says “Purchases of one-for-five service will be used to adjust the early retirement reduction required in 19-3-906, if applicable”. For military time it says “Reserve military service cannot be purchased if you have already received service credit under USERRA for that time period.”
The combined five-year limit and the order of purchase
The handbook says “Current law limits the purchase of active military, reserve military, additional, and other public service to a combined total of five years.” “When purchasing service, your most recent service must be purchased first.” The statute lists more sections in the cap. Section 19-3-514(1) says “a member may not purchase more than a combined total of 5 years under 19-3-503, 19-3-511(3)(b), 19-3-512, 19-3-513, and 19-3-515”; section 19-3-515 is headed Purchase of federal volunteer service.
Cost statement and payment
The handbook says “At your request, MPERA will prepare a cost statement which provides the amount required to purchase service as well as your payment options.” “Cost statements are only valid for 30 days.”
On payment it says “You can pay for a service purchase in one lump sum within 30 days of the date of your cost statement or make monthly payments.” “If you are an active member, you can make monthly payments by pre-tax payroll deduction.” “You can also purchase service by rolling over funds from an eligible retirement plan.” “Payments made directly to MPERA are not pre-tax.”
How a purchase reaches the benefit formula
The handbook’s benefit formula is “Retirement Factor x Years of Service Credit x HAC”. It defines the middle term as “The amount of service you earned through employment.” For several of the types above it says the purchased time counts as both membership service and service credit, and for others (one-for-five, and the other-public-service rule on the last five years) it limits how the time counts. Read the paragraph for your type.
A worked illustration, not a handbook example
Take an invented member hired before July 1, 2011, with fewer than 25 years of membership service, so the handbook’s factor is 1.7857% (the handbook words it as 1.7857% x Years of Service Credit x HAC), and an invented HAC of $60,000 (invented, for the computation). One extra year of purchased service credit would add 1.7857% x 1 x 60,000 = 1,071.42 a year to the formula result before any option choice, and two years would add 1.7857% x 2 x 60,000 = 2,142.84 a year. These inputs are invented to show the arithmetic. The illustration ignores what the purchase costs, whether the type counts as membership service, and the factor change at 25 years, so it says nothing about whether a purchase pays.
What to do and where to look
The first step the handbook describes is asking MPERA for a cost statement. Whether a purchase pays off is a separate question, covered on whether buying service credit is worth it and the pension buyback calculator. The tax treatment of the pension payments is on whether Montana taxes pensions.
Edition
This page reads Montana Public Employee Retirement Administration (MPERA), Public Employees’ Retirement System (PERS) Member Handbook, the current file MPERA served on 2026-10-21. Check the edition, your hire date and your own membership record with MPERA; the handbook’s text controls over this summary.
Common mistakes
- Assuming any type can be bought at any time. The handbook says “You must be vested to purchase refunded service if you are inactive.”
- Counting one-for-five years toward eligibility. The handbook says it “is not membership service”.
- Buying the oldest service first. The handbook says “your most recent service must be purchased first.”
Related: Montana PERS retirement decisions, whether buying service credit is worth it, the pension buyback calculator, and whether Montana taxes pensions.
Find the right next step for your situation
About how much do you have invested? Pick the range that fits; your next step appears immediately below.
Talk to an advisor about your pension decision
For U.S. investors with $250,000 or more in investable assets. WiserAdvisor is an independent service matching you with 2 to 3 vetted advisers. Its form asks for your ZIP code and answers to a few questions; a match is not guaranteed.
Free to request, with no obligation to hire. By submitting, you consent to calls, texts and emails from WiserAdvisor and up to three advisers. Advisers pay for introductions.
Clear Money Guide may earn a referral payment for a qualifying completed form. An introduction is not a Clear Money Guide recommendation.
Opens on WiserAdvisor’s site in a new tab.
Explore advisor help with pension choices
Price the destination before you decide. The matching service below introduces you to advisers who pay to meet you.
Before you start, what actually happens. The form is run by Kapitalwise, our advisor-matching partner. Kapitalwise sends your details to advisers who pay for the introduction, so expect calls and texts. Clear Money Guide may earn a referral payment for a qualifying submitted form, whether or not you ever hire anyone. This is free to you and there is no obligation to hire anyone.
The Kapitalwise form opens here; you stay on this page.
What happens when you press the button
It asks about nine questions: age, investable assets, location; then your name, email and phone number, and verifies the phone by text. Nothing loads and nothing reaches Kapitalwise until you press the button.
Prefer flat-fee or hourly pricing instead? Compare ranges here.
Answer againSources
- Montana Public Employee Retirement Administration (MPERA), Public Employees’ Retirement System (PERS) Member Handbook: mpera.mt.gov
- Related official page (not quoted): Montana Public Employee Retirement Administration home page: mpera.mt.gov
Read from the pension system handbooks linked above on October 21, 2026. General information, not tax advice. Your own facts decide the outcome, and a pension system or a qualified professional is the right place to confirm anything consequential.