# Calculating Benefits

PERS uses three methods to calculate Tier One/Tier Two retirement benefits:

PERS uses the method (for which a member is eligible) that produces the highest benefit amount.

### Full Formula Method

The Full Formula Method uses three factors to compute your retirement benefit:

• your final average monthly salary,
• your years and months of creditable service as of your date of retirement, and
• a factor set by statute at 1.67 percent for general service employees (2.0 percent for police officers and firefighters).

Multiply your final average monthly salary by your length of PERS creditable service, and then multiply the result by the appropriate percentage factor (1.67 percent or 2.0 percent) to estimate an approximate Refund Annuitybenefit amount.

Both your employer and your member account balances fund this benefit. This amount is reduced if you take an early retirement benefit. In addition, an increase or decrease will be made to the Full Formula calculation if you participated in the Variable Annuity Program after January 1, 1982, and have not made a one-time variable transfer.

### Formula Plus Annuity Method

The Formula Plus Annuity Method is available only if you made contributions before August 21, 1981. It uses a formula similar to the Full Formula Method to compute the employer monthly portion of your benefit. Multiply 1 percent of your final average salary (FAS) for general service employees (1.35 percent for legislators, police officers, and firefighters) by your years of creditable service. (Taking early retirement will reduce this total.) Add the total to the monthly annuity payment your member account balance provides, which is based on your balance and your life expectancy.

### Money Match Method

Under Money Match, your employer matches the benefit from your account balance by an equal amount. The monthly benefit is the sum annuitized over the estimated life expectancy for persons in your age group. Under a Money Match retirement calculation, PERS does not apply early retirement reduction factors that would apply under the Full Formula calculation . However, if you retire early under the Money Match calculation, there is an actuarial impact because payments will be received for a longer period since disbursements are based on life expectancy. Monthly payments will be less than they would be if you retired at normal retirement age.

If you participate in the Variable Annuity Program, any increase or decrease in your member account due to your participation in the program will result in an increased or decreased retirement benefit when calculating the benefit methods at retirement.

Related topics: