Retirement Question...

[jamesxx]

Looking at a few PD's retirement plan, and I am a little confused. I know a lot of departments have a 3% at 50 plan, but one pd is showing "City paid PERS of 4% for 2.7% @ 55 plan". What does this all mean?? Sorry if this has been discussed before... I searched but couldn't find exactly what i was looking for...

[L-1]

You get 2.7% of you salary for every year of service at age 55. 2.7 @ 55 is an old plan, so the question is, are they talking about 2.7% of your highest year's salary or 2.7% of your highest three year's salary, which is what some of the old plans provided. Be sure to ask, because if it's your highest 3 years salary, that's a big loss.

I'm not sure what they mean about the 4%. It sounds like the employee's contribution to the retirement system is 4% of their salary and that they are making the contribution for you. This is like getting a 4% raise, tax free raise.

[jamesxx]

Thank you very much.

Now as long as I don't get any SRH tattoos, or shoot up any abandoned cars, I should be ok!

Thanks for the help!

[08duramax]

Thank you very much.

Now as long as I don't get any SRH tattoos, or shoot up any abandoned cars, I should be ok!

Thanks for the help!

LOL. yeah. keep that stuff to a minimun

[Bully]

Basically, you take your years of service at a minimum of 55 yrs old and multiply it by 2.7. So if at 55 yrs old, if you have 30 yrs of service, you would get 81% of your single highest year. That is based on your base pay only. Any incentives such as education, OT, special assignments, etc don't count towards your single highest pay.

[jamesxx]

I understand it perfectly now. Thanks again for the clarification. Is 3% at 50 the norm now?

[dadyswat]

Then you sure don't want to work in Ohio.

[SBSO_DISPATCHER]

..................

[L-1]

I understand it perfectly now. Thanks again for the clarification. Is 3% at 50 the norm now?

3% @ 50 is what many agencies have, followed by second best, 3% @ 55. 2.7% @ 55 is still out there while a rare few still have 2% @ 55

As a side note, the employer's contribution for 3% @ 50 is roughly 24% of your monthly salary, while the employee's contribution is around 8 to 9%. However, CalPERS recently announced that given the crash in the economy, they are unable to sustain the retirement system at the current contribution rate. A significant part of this is has been laid to the 3% @ 50 program, which means contribution rates for this plan will need to be raised. Given the state's current financial condition, many cities and counties can't afford this and are looking at dropping the 3% @ 50 for new hires. Similarly, the State of California has been talki9ng about developing a second tier (lower) pension system for new hires.

This means you wantr to get hired as quickly as possible in case pension systems change for new hires.