There are several factors used to determine your retirement benefit. First we consider your length of service. Then we calculate your high-five average salary, using your highest five years of salary.
We take these two pieces and apply it to a benefit multiplier, also known as a benefit formula, to determine your retirement benefit. The benefit formula is based a service-credit percentage and an aged-based factor.
SERVICE-CREDIT PERCENTAGE
Service years and months are converted to a percent of your average monthly salary.
- Years served started January 1, 1979 and after - you receive 2.5% for each year of service.
- Years served before January 1, 1979 - you receive 5% for each year up to eight years and 2.5% for each year over eight years.
Example of how we calculate your benefit:
|
The assumptions - first entered service 1/1/1985 |
|
|
Age at retirement |
62 |
|
Allowable service |
12 years |
|
Average monthly salary |
$3,083 |
|
The calculation |
|
|
12 years x 2.5% = 30% $3,083 (your average monthly salary) $925 computed monthly benefit* *Please note: if you decide to end your legislative career and apply for retirement benefits prior to age 62, an early-retirement reduction will apply. |
AGED-BASED FACTOR APPLIED
The computed benefit has an age-based factor applied, which was passed into law in 1997. This increases your benefit to compensate for slightly lower, future cost-of-living increases over your lifetime.
Example of how aged-based factor is applied:
|
The assumptions |
|
|
Age at retirement |
62 |
|
Allowable service |
12 years |
|
Average monthly salary |
$3,083 |
|
Computed monthly benefit |
$925 (calculated in above example) |
|
Age-based factor |
9.0% (currently) |
| The calculation | |
|
$925 x 8.7% = $80 $925 (your computed monthly benefit) $1,005 monthly benefit * * Please note: if you end your legislative career and apply for retirement benefits prior to age 62, an early-retirement reduction will apply. |