Tier I Benefit Estimator
Tier I Benefit Formula and FactorsRetirement Service Credit
Part-Time Service
Average Salary
Plan B Reduction
Cost of Living Adjustment
Tier I Benefit Estimator:
- Please refer to the following benefit estimator if you would like to
obtain an estimate of your potential Tier I benefit under different
scenarios: (Tier I benefit estimator)
Tier I Benefit Formula and Factors:
- The amount of your monthly benefit is "defined" by a formula which
takes into account your years of retirement service credit, your average
salary, your age, and your plan membership.
- The following formula applies to all members of Tier I (although
Plan B members will be subject to a modest reduction upon reaching the
full Social Security age):
| Benefit Rate |
X |
Retirement Service Credit |
X |
Average Salary |
Benefit Rate:
- Benefit Rate: Your years of service and your age will determine your
Benefit Rate.
- If you have more than 25 years of service, or if you are over the age
of 65, your benefit rate is a full 2% for each year of service.
- If you are under the age of 65, your benefit rate will be
determined by the combination of your age and years of service based on
the following chart:
http://osc.ct.gov/empret/tier1summ/docs/Tier1BenefitPercentageChart.pdf
- Percent of Entitlement: Under the Tier I formula, you are entitled
to a specific percentage of your average salary. This percentage is
determined by multiplying your benefit rate by your years of credited
service.
Retirement Service Credit:
- Retirement Service Credit Includes:
- All periods of service for which you have paid retirement
contributions.
- Periods of creditable workers' compensation.
- Your service credit will be extended if you receive a payout for
any unused vacation days upon your retirement/separation from state
service.
- Properly documented voluntary leave taken after 6/9/94 counts as
free retirement service credit.
- Any periods of purchased service credit will be included in your
total retirement service credit.
- Retirement Service Credit Excludes:
- Any periods for which you have not paid retirement contributions, this
may include:
- Un-purchased leaves of absence without pay;
- Periods for which you exclusively received non-creditable workers'
compensation payments;
- Periods of state service for which you did not participate in Tier
I; or
- Periods for which you participated in Tier I but later refunded
your retirement contributions.
Part-Time Service:
- If you have had part-time service, you should know that:
- your part-time service will be treated as full-time service when
determining your eligibility to retire and your benefit rate (as
determined by the Tier I rate chart).
- your retirement income will be calculated to produce a benefit
which reflects the portion of a full-time schedule you worked throughout
your state employment.
- Example:
- Lets assume a retiree worked part-time at 50% of a full-time schedule
for 10 years
- For determining eligibility and your benefit rate from the chart, we
will use 10 years.
- However, when calculating your percent of entitlement, we will use
5 years (the full-time equivalent of working 50% of full-time for 10
years).
Average Salary
- Your average salary is the average of your 3 highest paid years of
service.
- Any 1 period of 12 consecutive months equals 1 year.
- Although for the majority of retirees the average salary is the
average of the last 36 months of employment, when calculating your
average salary the 3 years don't have to be consecutive years or
calendar years.
- A small percentage of retirees may find themselves subject to the
130% Cap provision:
- When calculating your average salary, no one year's earnings can be
greater than 130% of the average of the two preceding years. this
excludes mandatory overtime earnings. Effective 7/1/2014, no one
year's earnings can be greater than 150% of the average of the two
preceding years when including mandatory overtime earnings.
Plan B Reduction
-
If you are a Plan B member, your benefit may be subject to a slight
reduction.
- There are only 2 triggers for the Plan B reduction. The Plan B
reduction will commence:
- When you reach your full social security age, or
- If you receive a Social Security Disability Award at any point.
- Regardless of whether you collect your non-disability Social
Security benefit early (prior to reaching your full social security age)
or late (beyond your full social security age), the Plan B reduction
kicks in based on you attaining your full social security age.
- You can determine the amount of your Plan B reduction by taking one
half of your percent of entitlement and then applying the resulting
percentage to a fixed statutory figure of $4,800.00.
- Formula:
| 1/2
| X |
Percent of Entitlement |
X |
$4,800.00 (statutory figure) |
- Example:
- The percent of entitlement for a Tier I member with 30 years of
service is 60% (2% x 30 years of service). Therefore, the corresponding
annual Plan B Reduction for a Tier I member with 30 years of service
would be $1,440.00 per year or $120.00 per month.
- 1/2 x 60% Percent of Entitlement (= 30%) x $4,800.00 = 1,440.00
Cost of Living Adjustment
- Your pension is subject to an annual Cost of Living Adjustment (COLA).
- For retirements prior to June 30, 2022, these cumulative raises will be paid each year on either January
1st or July 1st depending on your date of retirement (DOR).
- For retirements July 1, 2022 forward, these raises will be based
on the language in the
2017 SEBAC
agreement .
- Currently you must be retired at least 9 full months in order to
qualify for your first raise(COLA).
- Thereafter, your annual cost of living adjustment will be paid on
the COLA anniversary date, which corresponds with your DOR.
- Your COLA will range from a minimum of 2% to a maximum of 7.5%
based on the following formula which takes into account a portion of the
increase in the Consumer Price Index for Urban Wage Earners and Clerical
Workers (CPI-W) for the 12 months immediately preceding your COLA
anniversary date:
60% of the annual CPI-W increase up to 6%
PLUS
75% of the annual CPI-W increase above 6%
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