Minimum Formula Annuity
The Minimum Formula Annuity is calculated by utilizing a combination of service credit, age and salary. This type of annuity is based upon your number of years of service multiplied by an accrual rate of 2.4% up to a maximum limit of 80% of your highest Final Average Salary.
Age is the primary factor which determines if an employee is eligible to retire. Age also affects the final annuity amount in cases where an employee retires early.
Minimum Formula Age and Service - Tier 1
At least 30 years of service credit and attains age 50, or
At least 25 years of service credit and attains age 55, or
At least 20 years of service credit, and attains age 55 (the annuity is discounted 0.25% for each month that the employee is under age 60) or
0 At least 10 years of service credit, and attains age 60.
Minimum Formula Age and Service -Tier 2 (Hired on or after 1/1/2011)
An employee is eligible for a reduced benefit at age 62 with at least ten years of service.
The benefit is reduced by ½ percent each month that the employee is under age 67.
An employee can receive a benefit at age 67 with at least ten years of service.
Your monthly pension is calculated using the following formula:
Service Years X 2.4% accrual factor (if applicable) X Monthly FAS X Age Discount (if applicable)
Money Purchase Annuity
The Money Purchase Annuity method uses the total amount of deductions withheld from your salary and the amount of City contributions that have been applied to your account. As previously noted, an employee has 6.5% of his salary deducted each pay period for his own annuity. In addition, the city contributes an amount equal to 6.0% of salary.
When an eligible employee retires, the total amount of earned credit is used to purchase an annuity. If an employee retires under age 60 with less than 20 years of service, the amount of City contributions is reduced by 10% for each year of service under 20 years. The annuity payments begin no earlier than age 55.
If retirement is due to expiration of ordinary disability credit, the full amount of City contributions are utilized to determine the annuity. The annuity payments begin after the last disability payment regardless of age.
The maximum allowable annual Money Purchase Annuity is 60% of your highest annual salary.