Early Retirement

Tier A & Tier B: Group I (Employee and Teacher) Members hired prior to July 1, 2011

Members with at least 10 years of Creditable Service may retire between the ages of 50-59.

Members with at least 20 years of Creditable Service may retire before age 50 under the “Rule of 70” if their age plus their Creditable Service adds up to 70 or more. (Example: Age 45 + 25 years service = 70.)

Pension Calculation

The pension is calculated using the formula for Service Retirement prior to attainment of the full Social Security retirement age and then a permanent early retirement reduction is applied to the benefit.

Early Retirement Pension Reduction

Group I members who receive an Early Retirement pension will experience a permanent reduction in their pension amount, separate from and in addition to the benefit recalculation following attainment of the member's full Social Security retirement age. 

The reduction applied to an Early Retirement pension is based on the member’s age at the time of retirement, the number of years and months prior to age 60 that the member will begin to receive a pension, and the reduction factor, which is determined by the number of years and months of Creditable Service that the member has at the time of retirement.

The applicable reduction factor is multiplied by the years and months of early retirement. The permanent reduction is then applied to the Service Retirement pension. Different provisions apply to members with Split Benefits.

Early Retirement Pension Calculation Example:

A Group I member retires with 25 years of Creditable Service at age 55 with an Average Final Compensation of $40,000:

Early Retirement Benefit Example
Prior to attainment of full Social Security retirement age:

Average Final Compensation divided by 60 multiplied by Creditable Service
= approximate annual pension amount 

$40,000 divided by 60 multiplied by 25 = $16,667 (approximate annual pension amount prior to Early Retirement reduction)

• 25 years of Creditable Service results in a 4% reduction factor for each year of early retirement
• Age 55 is five years before age 60 (five years of early retirement)
• 4% (reduction factor) x 5 (years of early retirement) = 20% permanent reduction

$16,667 x 20% = $3,333 (permanent reduction per year until age 65)
$16,667 – $3333 = $13,334 (approximate early reduced annual pension amount payable until age 65)

Early Retirement Benefit Example
Following attainment of full Social Security retirement age:

Average Final Compensation divided by 66 multiplied by Creditable Service
= approximate annual pension amount 

$40,000 divided by 66 multiplied by 25 = $15,152 (approximate annual pension amount prior to early retirement reduction)

• 25 years of Creditable Service results in a 4% reduction factor for each year of early retirement
• Age 55 is five years before age 60 (five years of early retirement)
• 4% (reduction factor) x 5 (years of early retirement) = 20% permanent reduction

$15,152 x 20% = $3,030 (permanent reduction per year at age 65 and older)
$15,152 – $3030 = $12,122 (approximate early reduced annual pension amount payable at age 65 and older)