How Your Retirement Allowance Is Calculated
There are three key components to the formula that determines your monthly retirement allowance:
- Your years of Service Credit;
- Your Highest Average Monthly Compensation; and
- LACERS' retirement factor.
Service Credit
You earn service credit for each pay period in which you
receive compensation and make your mandatory contribution to LACERS.
Your Service Credit is determined by the hours you worked for the
City, as well as any time you may have bought back. Example:
You worked for the City exactly 20 hours per week for 10 years.
Because you worked half- time, your Service Credit will be half
of the total time you worked, or 5 years.
You can increase your Service Credit by applying and paying for Back Contributions, Re-deposits, and/or Government Service Buyback. To learn more about these, please visit our website at www.lacers.org or telephone our Call Center at (213) 473-7200 or (800) 779-8328.
Highest Average Monthly Compensation:
This is an average of your highest 12 consecutive months of compensation earnable for any position or office you held in City service. It may be based on your last 12 months of service or any other 12 consecutive months of service that you designate. Example: The salary for your position is $4,000.00 per month, but you work a 72-hour schedule so you earn $3,600.00 per month. Your highest average monthly compensation is $4,000.00 because that is the salary for your position.
The compensation that is included in your Highest Average Monthly Compensation is limited to your base salary and any regularly assigned bonuses or premium pay.
LACERS' Retirement Factor
LACERS' retirement factor is 2.16% (or .0216). If you do not meet the eligibility criteria for a normal retirement, but you do meet the criteria for an early retirement, you can still retire. However, a reduction factor will be applied.
Bringing It All Together
You can estimate your monthly retirement allowance by using the following equations:
Normal Retirement
Service Credit x Highest Average Monthly Compensation x 2.16%
Early Retirement
Service Credit x Highest Average Monthly Compensation x 2.16% x Reduction Factor
LACERS Communications
February 1, 2005
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