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Adjusted Minimum Benefit

(Also referred to as the “Minimum Monthly Benefit” for PERS Plan 1 and TRS Plan 1)

  1. What is the adjusted minimum benefit?

    Legislation passed in 2004 and expanded in 2006 and 2011 establishes a minimum benefit level for qualifying Public Employees’ Retirement System (PERS) Plan 1 and Teacher’s Retirement System (TRS) Plan 1 retirees. The 2006 legislation also established a 3% cost of living adjustment effective July 1, 2006 and each July 1 thereafter.

Effective July 1, 2006, the minimum benefit was $1,030. Effective July 1, 2019, the minimum benefit was increased to $1,957.15. Any adjustments (such as a survivor option choice, early retirement or an annuity withdrawal, etc.) made to your original benefit will reduce this amount. That is why the minimum benefit is referred to as an adjusted minimum benefit.

  1. Who qualifies for the adjusted minimum benefit?PERS Plan 1 and TRS Plan 1 retirees (and survivors of retirees) whose current gross monthly benefit is less than the adjusted minimum benefit level and who:
    1. Have at least 25 years of service credit and who have been retired at least 20 years; or who
    2. Have at least 20 years of service credit and who have been retired at least 25 years.
    Your benefit will be re-evaluated using the July 1, 2019, minimum benefit of $1,957.15 ($1,900.50 plus the 3% increase). If your benefit is below the adjusted minimum benefit level and you meet the requirements above, you will have your monthly benefit adjusted beginning in July 2019.
  1. How is the adjusted minimum benefit determined? We began with a base benefit of $1,030 (as of July 1, 2006) and then applied any adjustments made to the account (for instance, survivor options, early retirement or an annuity withdrawal) to determine the adjusted minimum benefit.  As of July 2019, the base benefit amount became $1,957.15 prior to the adjustments. That amount is then compared to your current benefit. You will receive the greater of the two benefits.
Here's an example of how those calculations work (the examples are for illustrative purposes only; see the adjusted minimum benefit chart for the current dollar amount):

A member retired in July 1999 with 25 years of service credit and an Average Final Compensation (AFC) of $2,000. They selected a 50% survivor benefit option. The retirement benefit was determined as follows:

2% x $2,000 AFC x 25 years of service credit x .94 (reduction factor for survivor benefit option) = $940

Since retirement, they have received COLAs totaling $606.19, increasing the current benefit to $1,546.19 ($940 + $606.19).

They have been retired for 20 years, making them eligible for the adjusted minimum benefit in July 2019. To determine if the adjusted minimum benefit exceeds the current benefit, DRS will multiply the base benefit of $1,957.15 by the reduction factor for their selection of a 50% survivor benefit option (.94), as follows:

$1,957.15 x .94 = $1,839.72

Since the current benefit of $1,546.19 is less than $1,839.72, the monthly benefit will increase to $1,839.72.

  1. To determine if the survivor qualifies for the adjusted minimum benefit, DRS will multiply the base benefit of $1,957.15 by the reduction factor for the retiree’s selection of a 50% survivor benefit option (.94). The survivor would then receive 50% of the benefit the retiree would have received.

    Here’s how the 50% survivor benefit option is calculated:

    $1,957.15 x .94 = $1,839.72 x 50% benefit option choice = $919.86.

    The retiree’s survivor will receive the adjusted minimum benefit of $919.86.