LGERS Retirement Formula
Your Annual Benefit is equal to
1.85% of your average final compensation
X (multiplied by)
your years and months of creditable service
Average Final Compensation is the average of your salary during your four highest-paid years (48 consecutive months) in a row. If your four highest-paid years in a row include a final payment for unused vacation leave and/or prorated longevity, your average final compensation may be increased by the extra payment(s). Final payments, if any, for unused sick leave or reimbursements for expenses are not includable in your average final compensation.
Creditable Service is the total of all service credit that counts toward retirement. It includes membership service for any period you contribute to LGERS, provided you have not withdrawn your contributions. It also includes credit for eligible purchased service and eligible unused sick leave that is converted to creditable service at retirement.
Service Retirement Calculation Example
Assume employee Mary Benson retires at age 60 with 32 years and two months of creditable service and an average final compensation of $40,331. Because Mary has more than 30 years of creditable service at retirement, she receives her basic benefit of about $24,000 a year (about $2,000 monthly) for the rest of her life under the maximum allowance. Monthly payments would stop at her death.
The following table shows how we calculate Mary’s benefit. Use the spaces in the right-hand column to fill in your figures for an estimate of benefit.
| Step 1 | Example | ||
| Add your salary during your 4 highest-paid years (48 months in a row) | Year 1 | $____________ | $38,930 |
| Year 2 | $____________ | $39,830 | |
| Year 3 | $____________ | $40,830 | |
| Year 4 | $____________ | $41,734 | |
| Total | $____________ | $161,324 | |
| Then, divide the total by 4 to get your average final compensation (AFC) | divide by 4 | /4 | |
| Average Final Compensation | $____________ | $40,331 | |
| Step 2 | |||
| Step 1 AFC | $____________ | $40,331 | |
| Multiply Step 1 AFC by 1.82% (.0182) to apply the retirement formula* | x .0185 | ||
| Total | $____________ | $746.12 | |
| Step 3 | |||
| Determine your creditable service | ____________ | 32.1667 years | |
| Step 4 | |||
| Calculate your annual benefit* by multiplying Step 2 by Step 3 | Step 2 Total | $____________ | $746.12 |
| Step 3 Years | x ___________ | 32.1667 years | |
| Total Annual Benefit | $____________ | $24,000.22 | |
| Step 5 | |||
| Calculate your monthly benefit* by dividing Step 4 by 12 | Step 4 Total Annual Benefit | $____________ | $24,000.22 |
| divide by 12 | /12 | ||
| Total Monthly Benefit | $____________ | $2,000.02 | |
| (This is an estimate of the payment you will receive each month before taxes or any other deductions.) | |||
*Remember, if you retire early or if you choose for payments to continue to a beneficiary after your death, these numbers will change.
Download a Benefit Calculation Worksheet
Log in to your ORBIT account to Create a Custom Benefit Estimate.
If you are between ages 50 and 59, with fewer than 30 years of creditable service, your early retirement will be reduced to the percentages shown in the table below. If you are a firefighter or rescue squad worker between age 55 and 60 with five to 20 years of creditable service, your early retirement will be reduced to the percentages shown below in the 20 years of creditable service column.
| AGE | Years of Creditable Service | |||||||||
| 29 | 28 | 27 | 26 | 25 | 24 | 23 | 22 | 21 | 20 | |
| 59 | 95% | 90% | 85% | 80% | 80% | 80% | 80% | 80% | 80% | 80% |
| 58 | 95% | 90% | 85% | 80% | 75% | 75% | 75% | 75% | 75% | 75% |
| 57 | 95% | 90% | 85% | 80% | 75% | 70% | 70% | 70% | 70% | 70% |
| 56 | 95% | 90% | 85% | 80% | 75% | 70% | 65% | 65% | 65% | 65% |
| 55 | 95% | 90% | 85% | 80% | 75% | 70% | 65% | 60% | 60% | 60% |
| 54 | 95% | 90% | 85% | 80% | 75% | 70% | 65% | 60% | 55% | 55% |
| 53 | 95% | 90% | 85% | 80% | 75% | 70% | 65% | 60% | 55% | 52% |
| 52 | 95% | 90% | 85% | 80% | 75% | 70% | 65% | 60% | 55% | 50% |
| 51 | 95% | 90% | 85% | 80% | 75% | 70% | 65% | 60% | 55% | 50% |
| 50 | 95% | 90% | 85% | 80% | 75% | 70% | 65% | 60% | 55% | 50% |
The chart above uses whole numbers for years of service and age as a reference. When you retire, your creditable service will be adjusted based on age and service in years and months
Your age at retirement is an important factor in determining your monthly benefit. If you do not meet the requirements for a full-service retirement, you may still retire early, but you will receive a reduced monthly benefit for your lifetime.
Early retirement benefits are calculated using the same formula as a service retirement multiplied by a reduction percentage based on your age and/or service at early retirement. If you are between ages 60 and 65, with less than 25 years of creditable service, your early service retirement benefit will be reduced to the following percentages. If you are between birthdays when payments start, the reduction will be adjusted proportionately.
| If you are this age when payments start, | you receive this percentage of your benefit. |
| 64 | 97% |
| 63 | 94% |
| 62 | 91% |
| 61 | 88% |
| 60 | 85% |
Assume employee Fred Wise retires at age 61 with 24 years and three months of creditable service and an average final compensation of $40,331.
| Here is how we calculate this benefit |
| (AFC) $40,331.00 |
| x 0.185 |
| $746.12 |
| (creditable service) x 24.25 |
| $18,093.41 |
| Now, apply the early retirement reduction percentage |
| $18.093.41 |
| (percentage at age 61) x 0.88 |
| $15,922.20 |
Fred receives a benefit under the maximum allowance of about $15,922 a year (about $1,326 monthly). His payment will start at age 61 and continue for the rest of his life. Assume, however, that Fred is age 59 instead of age 61. With 24.25 years of creditable service, his early service retirement reduction percentage is 0.80 instead of 0.88. In this case, Fred receives a benefit under the maximum allowance of about $14,474 a year (about $1,206 a month). His payment will start at age 59 and continue for the rest of his life.
The following chart shows the approximate monthly benefit paid under the maximum allowance option at various salary levels, depending on age and creditable service. These are only examples. Your own benefit is calculated individually and depends on your age, creditable service and average final compensation.
| Monthly Retirement Benefit Under Maximum Allowance | ||||||
| Age ➡️ | 50 | 55 | 60 | Any | Any | |
| AFC ⬇️ | Years of Service ➡️ | 20 | 28 | 25 | 30 | 40 |
| $90,000 | $1,387 | $3,496 | $3,468 | $4,162 | $5,550 | |
| $80,000 | $1,233 | $3,108 | $3,083 | $3,700 | $4,933 | |
| $70,000 | $1,079 | $2,719 | $2,697 | $3,237 | $4,316 | |
| $60,000 | $925 | $2,331 | $2,312 | $2,775 | $3,700 | |
| $55,000 | $847 | $2,136 | $2,119 | $2,543 | $3,391 | |
| $50,000 | $770 | $1,942 | $1,927 | $2,312 | $3,083 | |
| $45,000 | $693 | $1,748 | $1,734 | $2,081 | $2,775 | |
| $40,000 | $616 | $1,554 | $1,541 | $1,850 | $2,466 | |
| $35,000 | $539 | $1,359 | $1,348 | $1,618 | 2,158 | |
| $30,000 | $462 | $1,165 | $1,156 | $1,387 | $1,850 | |
| 25,000 | $385 | $971 | $963 | $1,156 | $1,541 | |
This page was last modified on 09/10/2024