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"Tier 2" Retirement Annuity
If you first began employment on or after January 1, 2011 and you meet the minimum criteria of having served for 10 years and are at least 62 years of age, you are eligible for a monthly annuity calculated from a Defined Benefit formula known as the Minimum Formula.
"Tier 2" Minimum Formula Annuity Details:
- Members earn 2.4% for each year of service
- The Final Average Salary "FAS" is the average of the 96 highest consecutive months’ salary within the last 10 years of service.
- "Normal" retirement is considered to be age 67. If you retire early (before age 67), your annuity is reduced by ½% per month before age 67.
- Salary, for the purpose of benefits and contributions, will be capped at $106,800 in 2011. This amount automatically increases each year by the lesser of 3% or one-half of the increase in the Consumer Price Index.
- 80% is the maximum benefit that you can accrue.
- The annual annuity increase is the lower of 3% or half the Consumer Price Index-u and is based on the originally granted annuity. The first increase is the January 1 following the later of age 67 or the first anniversary after retirement.
Sample Calculation for the "Tier 2" Minimum formula:
| Scenario 1 |
| Assuming Age 62 With 20 years of Service Final Average Salary |
$3,000.00 |
| 20 years @ 2.4% |
48% |
| |
$1,440.00 |
| 30% Age 62 Reduction |
70% |
| Annuity |
$1,008.00 |
| Scenario 2 |
| Assuming Age 67 With 25 years of Service Final Average Salary |
$3,400.00 |
| 25 years @ 2.4% |
60% |
| |
$2,040.00 |
| No Age Reduction |
100% |
| Annuity |
$2,040.00 |
See the Tier 2 Age and Service Annuity Percentage Table
Questions
If you have any questions about your Retirement benefits, please contact us.