Updated October 21, 2026. Quick answer: The LACERS Tier 1 summary plan description says that a member who is eligible to purchase Service Credit may count it toward retirement eligibility and may increase the Retirement Allowance and health subsidy. It names four kinds of purchase (government service buybacks, re-deposits, back contributions and public service buybacks) and warns that a purchase that does not comply with Internal Revenue Code limits may be disallowed in whole or in part.
What this covers
The summary plan description’s Increasing Your Service Credit section opens “If you are eligible to purchase Service Credit, doing so may count toward your retirement eligibility and may increase your Retirement Allowance and health subsidy.” This page follows that section and quotes it. The wider set of LACERS choices is on LACERS retirement decisions and public pension retirement decisions.
The four kinds of purchase
The document says “Service Credit purchases can include:” and lists the four kinds below. Each right-hand cell is a sentence from the document.
| Kind | What the document says |
|---|---|
| Government Service Buybacks (GSB) | “You were a full-time employee with a governmental agency within the United States or its territories for at least six months of uninterrupted service, and your time is not eligible for Reciprocity” or “You have taken uncompensated maternity leave of at least one full month while employed by the City” |
| Re-deposits | “If you withdraw your contributions from LACERS and become a LACERS Member again, you can regain the Service Credit you earned during your prior City employment by re-depositing your contributions plus interest.” |
| Back Contributions | “Back Contributions allow City employees, who are LACERS Members, to purchase Service Credit for full-time or part-time regular City employment when they were not LACERS Members or making contributions to LACERS.” |
| Public Service Buybacks (PSB) | “If you have taken approved leaves without pay from the City (other than maternity leaves, which can be purchased as a GSB) or have lost Service Credit due to a Separate Account court order, you may be able to purchase that Service Credit as part of the Plan’s PSB program.” |
Government service buybacks carry a limit the table does not show. Section 4.1020(b)(1) of the Los Angeles Administrative Code, as restated by Ordinance No. 182629 (2013), says “Members may not buy back credit for periods of service for which they are currently eligible or will become eligible to receive a retirement benefit from a prior plan.”
What a purchase can and cannot do
For public service buybacks it says “Service Credit purchased through a PSB will only increase the amount of your Retirement Allowance.” “It cannot be used for any other purpose.” It also sets a floor for that kind: “Your total combined leave time must add up to at least six months.” The Administrative Code also caps the purchase. Section 4.1019(e), as restated by Ordinance No. 182629 (2013), says “Total buy back credit purchased shall not exceed the member’s actual City Service at the time the buy back is concluded.”
Back contributions have an exclusion: “It does not include time as a contractor with the City.” The Administrative Code adds two exclusions. Section 4.1017(a), as restated by Ordinance No. 182629 (2013), allows back contributions only if “the member is not receiving and is not entitled to receive for that period of City employment any benefit from any other pension or retirement system”. Section 4.1017(f) says “a member shall not be allowed to make back contributions to purchase retirement credit under this section if the period of time being purchased constitutes … which the member is prohibited from purchasing under federal law.” The term it uses is unqualified service.
The federal-law limit
The document says “There are certain Internal Revenue Code (IRC) requirements and limitations on service purchases.” It continues “A service purchase that does not comply may be disallowed in whole or in part by LACERS.”
How purchased time reaches the formula
The document’s formula multiplies Final Compensation, Service Credit and the Retirement Factor of 2.16%. It defines the middle term: “Full-time employees receive 0.03835 years of Service Credit per pay period.” Which of the four kinds count toward eligibility, and which only raise the allowance, is set by the rules above, so read the kind you are considering before assuming a purchase moves your retirement date.
A worked illustration, not a document example
Take an invented member whose monthly Final Compensation is $4,000. The document’s Retirement Factor is 2.16%, so one extra year of Service Credit would add 4,000 x 1 x 2.16% = $86.40 a month before taxes, and five extra years would add 4,000 x 5 x 2.16% = $432.00 a month. These inputs are invented to show the arithmetic. The illustration ignores what the purchase costs, whether the purchased time counts toward eligibility, and any early-retirement reduction, so it says nothing about whether a purchase pays.
What to do and where to look
The first step the document points to is the LACERS information sheet for the kind of purchase you want (it names a Government Service Buyback, a Re-deposit, a Back Contribution and a Reciprocity sheet). 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 California taxes pensions.
Edition
This page reads Los Angeles City Employees’ Retirement System (LACERS), Tier 1 Benefits Summary Plan Description, the current file LACERS served on 2026-10-21. It covers Tier 1 only (members who joined on or before February 20, 2016); Tier 3 members have a separate summary plan description that this page does not read. Check the edition, your tier and your own membership record with LACERS; the document’s text controls over this summary.
Common mistakes
- Assuming every purchase counts toward eligibility. The document says a public service buyback “will only increase the amount of your Retirement Allowance.”
- Counting contractor time as back contributions. The document says “It does not include time as a contractor with the City.”
- Assuming any purchase is allowed. The document says one that does not comply with federal limits “may be disallowed in whole or in part by LACERS.”
Related: LACERS retirement decisions, whether buying service credit is worth it, the pension buyback calculator, and whether California taxes pensions.
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Answer againSources
- Los Angeles City Employees’ Retirement System (LACERS), Tier 1 Benefits Summary Plan Description: www.lacers.org
- Related official page (not quoted): LACERS home page: www.lacers.org
- Related official page (not quoted): IRS Topic no. 410, Pensions and annuity income: www.irs.gov
- Related official page (not quoted): IRS Publication 575, Pension and Annuity Income: www.irs.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.