If you have at least 20 service credit years, you may retire at or after age 53. However, your benefit will be reduced to reflect the fact that you are likely to be receiving your benefit over a longer period of time. The benefit reduction is set at three percent for each year you are under age 60.
| Age at Retirement | 3% reduction factor |
|---|---|
| 53 | 79% |
| 54 | 82% |
| 55 | 85% |
| 56 | 88% |
| 57 | 91% |
| 58 | 94% |
| 59 | 97% |
| 60 | 100% |
Suppose you retire at age 53 with 25 years of service credit and an average final compensation of $3,500. Because you are retiring early, your benefit is 79 percent of what it would be if you were 60 when you retired, with the same service credit and average final compensation. Your monthly benefit of $1,382.50 is calculated as follows:
2% × 25 years × $3,500 × 79% = monthly benefit
2% × 25 years = .50
.50 × $3,500 = $1,750
$1,750 × 79% = $1,382.50
Suppose you work another seven years rather than retiring at age 53. At age 60, you would have 32 service credit years and be eligible to receive full retirement benefits. Assuming you have the same average final compensation, your benefit would be calculated as follows:
2% × 32 years × $3,500 = monthly benefit
2% × 32 years = .64
.64 × $3,500 = $2,240.00
The service retirement benefit for dual members is the sum of the benefits they have earned separately from each system. Dual members with a total of five or more service credit years from all eligible systems are entitled to a benefit from each system, even if they have less than five service credit years in any of the systems.
In most cases, dual members will receive a benefit based on the highest base salary from any system, whichever produces the better benefit. Base salary is the salary or wages earned, excluding lump-sum cashouts and severance pay. For details, refer to the DRS publication, What is Dual Membership and How Does It Affect Me?
Suppose you are 60 years old and have 13 service credit years with PSERS Plan 2 and three service credit years with PERS Plan 2. Without dual membership, your PERS service would be too short to earn a PERS benefit. With dual membership, you will receive a benefit from each plan, calculated according to the rules of each system as follows:
2% × 13 years PSERS service credit × average final compensation = PSERS benefit
2% × 3 years PERS service credit × average final compensation × early retirement factor = PERS benefit
At age 60, you can begin drawing an actuarially reduced PERS benefit or defer receipt of the PERS benefit until age 65 when you would be eligible for a full benefit.