How is my benefit calculated?

Benefit Formula

Your monthly defined benefit is calculated using the following formula:

1 percent x Service Credit Years x AFC

AFC is the monthly average of your 60 consecutive highest-paid service credit months. AFC does not include payments for any type of severance pay, such as lump-sum payments for deferred sick leave, vacation or annual leave.

Benefit Calculation

Suppose you retire at age 65 with 32 service credit years. Your average final compensation is $3,200. Your monthly retirement benefit will be $1,024.

1% x 32 years x $3,200 = monthly benefit
1% x 32 years = .32
.32 x $3,200 = $1,024

This calculation results in the standard benefit. It will be lower if you choose to continue benefits to a survivor upon your death. See What are my benefit options?.

Lump sum payment instead of monthly benefit

If your monthly benefit under Option 1 would be less than the indexed amount (as of September 1, 2005, the indexed amount is $130.48) payment may be made in a lump sum at the discretion of the member. Anyone receiving such a payment is considered retired from SERS. This provision is likely to apply only to members who retire early due to disability or with minimal service credit.

Calculating benefits for dual members

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 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?

EXAMPLE

Dual member benefits

Suppose you are 65 years old and have three service credit years with SERS Plan 3 and 13 service credit years with TRS Plan 1. Without dual membership, your SERS service would be too short to earn a SERS benefit. With dual membership, you will receive a benefit from each plan, calculated according to the rules of each system as follows:

SERS Plan 3:
1% x 3 years SERS service credit x average final compensation = SERS benefit

TRS Plan 1:
2% x 13 years TRS service credit x average final compensation = TRS benefit