Office of the State Comptroller
Retirement Services Division
Tier I - Retirement Basics

Benefit Calculation

Tier I Benefit Estimator

Tier I Benefit Formula and Factors

Retirement 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://www.osc.ct.gov/empret/tier1summ/retiretypes.htm#EARLY
       
  • 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.
       
    • Mandatory overtime earnings are not subject to this limitation.

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
  • Tier I Benefit Estimator: The following benefit Estimator provides estimates of the Plan B Reduction:
    (Tier I benefit estimator)

Cost of Living Adjustment
 

  • Your pension is subject to an annual Cost of Living Adjustment (COLA).
     
  • These cumulative raises will be paid each year on either January 1st or July 1st depending on your date of retirement (DOR).
     
  • You must be retired at least 9 full months in order to qualify for your first raise.
     
  • 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 above 6%

 

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