Chapter 4: Reportable Compensation

PSERS Reportable Compensation

Establishing Service Credit for Unpaid Leave

In some circumstances, a PSERS member may elect to establish service credit for periods of unpaid leave. The regular compensation the member would have earned had he or she been working is used to calculate the amount the member must pay to establish the service credit. The regular compensation amount used to create the bill is not reportable compensation. Depending on the type of leave, this compensation may or may not be included as Average Final Compensation (AFC) in calculating a member's retirement benefit.

Authorized Unpaid Leave - RCW 41.37.260 provides members with an option to establish service credit for periods of unpaid leave. Salary used to calculate the contributions for such periods is not reportable compensation and cannot be included as AFC in calculating a member's retirement benefit.

Military Leave - Salary used for purposes of calculating contributions owing for a period of interrupted military service is not reportable compensation. However, if a member elects to purchase credit for periods of military service, and the military leave period falls within the member's AFC period, federal law requires the salary the member would have earned during the period of absence be used in the calculation of the AFC.

For DRS publications on optional service credit, refer to PSERS Optional Service Credit.