Preparing to Retire
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This Page Describes

• How to Estimate Your Average Monthly Salary
• How to Calculate Your Years and Partial Years of Service Credit Time
• Will There be an Early Retirement Reduction Factor?
• Early Retirement Reduction Factor
• Retirement Options Summary
• Eligible Spouse / Domestic Partner Continuance

   If you want a more accurate method than the quick and easy method to calculate your retirement allowance, the basic "formula" to estimate your retirement allowance is shown below:

   If applicable, there may be a reduction because of an early retirement factor. You may also decide on a retirement option which may reduce your allowance.

   List of the components that may be involved in the estimate of your retirement allowance

1. Average Monthly Salary
2. Service Credit Time
3. Early Retirement Reduction Factors
4. Options
5. Eligible Spouse/Domestic Partner Continuance
6. Divorce

How to Estimate Your Average Monthly Salary

1. Determine the total pay for the highest 26 payroll periods (The "base pay" used in this calculation is the pay rate shown in your Memorandum of Understanding. Overtime is not a part of your base pay.):
   

   Number of Pay Periods	X	Base Pay Amount	=	Total Pay
   5	X	$1,575.00	=	$7,8750.00
   21	X	$1,500.00	=	$31,500.00
   26		TOTAL	=	$39,375.00

2. Change the total pay to its monthly equivalent by:
   • dividing the total by 26 to get the average bi-weekly amount
   • then multiplying the bi-weekly amount by the factor 2.175 to get the average monthly amount

   $39,375

   ÷

   26

   =

   $1,514.42

   ×

   2.175

   =

   $3,293.87

   To convert a daily wage to monthly salary, multiply the daily wage by 21.75.

   Your highest 26 consecutive pay periods may not necessarily be the last 26 pay periods. Example: Suppose that a year and three months ago you were on an emergency appointment for two months at a higher DDR. Suppose also that, when the emergency appointment ended, you were returned to a lower DDR. The higher salary you earned will be included in the calculation of your highest average monthly salary.

   The amount used to calculate your monthly salary is the base salary on the first day of the pay period.

How to Calculate Your Years and Partial Years of Service Credit Time

   Your service time includes the following:

• Pay periods from December 1, 1980 to your retirement date and whole months prior to December 1980 during which you were a member of the Plan, received a paycheck and had a retirement contribution deducted from that pay. Prior to July 31, 1977, deductions were taken monthly; between August 1, 1977 to November 30, 1980 deductions were taken semi-monthly; and since December 1, 1980, deductions have been taken bi-weekly. If you were on the payroll one day in a pay period, a retirement deduction was taken.
  
• Service in other City departments for which your City Employees' Retirement System retirement service credit was transferred to the DWP Plan.
  
• Credited military service.
  
• Any portion of your first continuous 26 weeks of Department service which you have purchased.
  
• Service with other City departments which you have purchased.
  
• Service for which you have redeposited previously withdrawn contributions.
  
• Other Governmental Service (OGS) purchased in accordance with the Plan.
  
• Periods during which you have received Plan disability benefits or Workers' Compensation benefits from the Department, but only to the extent of the allowable maximums shown below:

   You will receive four months service credit after 10 years of service and one month service credit every two years thereafter. See below:

   Do not include the following in your service credit:

• Any payroll period for which you received Plan disability benefits or Department Worker's Compensation benefits which exceeded the above mentioned credits.
• Any pay period you were on a leave without pay (except for allowable military credit)

   The following chart will convert your service credit to decimals, to be used in the calculation of your estimated retirement allowance:

Note: The Retirement Section gets your retirement service credit time from the Paymaster's Office.

   Add the applicable decimals from above to the number of whole years of service credit. For example: 30 years and 3 months = 30.2500

Will There be an Early Retirement Reduction Factor?
(Commonly referred to as a penalty)

   If you retire before October 1, 2002, the following situations apply to your retirement allowance:

   If your answer for a penalty is yes, your retirement will be reduced by an early retirement factor as shown below. Please refer to the chart below for the factor that applies to you.

   Example: If you have less than 30 years of credited service, at age 56, your early retirement factor is .94 or 94%. Therefore instead of receiving 100% of the formula retirement, you will receive 94% of the formula retirement. This is a 6% early retirement penalty.

Early Retirement Reduction Factor

   The early retirement factor is determined by the attained age on the effective date of retirement. Every three months of attained age will affect the factor.

   Example: A person's retirement date is May 1, 1998 and the person's 56th birthday was on October 26, 1997. The person's attained age is 56 years six months and five days; therefore, we will use the factor for 56 1/2. If the person's birthday was November 26 instead of October 26, the attained age would be less than 56 years six months. Therefore the factor used would be 56 1/4.

Note: If you retire before October 1, 2002 and you have 30 or more years of service credit, you may retire between ages 50 and 60 without a reduction in your retirement allowance.

Retirement Options Summary

The following information is just to give you a general idea of what various Retirement Options will be offered to you. You may choose any option at retirement. See more information about the Eligible Spouse/Domestic Partner continuance. Examples are shown for Options Full, A and D.

Option Full

Single members and members whose Eligible Spouse/Domestic Partner have their own retirement income may want to consider Option Full.

Option A

and

At your death, your designated beneficiary will receive a refund of any unused portion of your Total Accumulated Contributions to the Retirement Plan. The deductions for retirement from your payroll checks and interest accrued on that money are considered your total accumulated contributions. Each month while you are retired, a portion of the total accumulated contributions is used to pay your pension. Your total accumulated contributions generally last approximately ten years. You will be paid your pension for your lifetime. However, if you pass away before your total accumulated contributions have been exhausted and you chose Option A, whatever Monies remain will be paid to whomever you designate as your beneficiary. Example: If you had $70,000 in your account, you chose Option A at retirement and you live only five years, there may be approximately $35,000 paid in a lump sum to whomever you designated as your beneficiary. In addition to this refund, Option A still provides a monthly continuance to your Eligible Spouse/Domestic Partner after your death of up to 50 percent of your retirement allowance.

   Members who have a life-threatening medical condition when they retire or who have a large retirement account may want to consider Option A.

Option B

and

Up to 50% continuance to your Eligible Spouse/Domestic Partner after your death, if you have an Eligible Spouse/Domestic Partner in addition to your beneficiary for the Option B continuance.

   Members with disabled children who are unable to provide for themselves or members who have been married many years and are now considering divorce may want to consider this option.

Option C

and

Up to 50% continuance to your Eligible Spouse/Domestic Partner after your death, if you have an Eligible Spouse/Domestic Partner in addition to your designated beneficiary

   Members whose divorce provides a continuance for a former spouse, or members with disabled children may want to consider this option since it is less expensive to you than Option B. The amount that your monthly retirement allowance is reduced depends on the percentage continuance that you choose and the age of your beneficiary.

Option D

   Members who are married or have a Domestic Partner and want to provide a continuance to their Eligible Spouse/Domestic Partner which is the same amount as what the member received may want to consider this option.

Option E

   You will choose the percentage you want to provide for a continuance. The amount that your monthly retirement allowance will be reduced depends on the percentage continuance that you choose and the age of your Eligible Spouse/Domestic Partner.

   Members who are married or have a Domestic Partner and don't want to take as great a reduction as Option D but still want to provide a larger continuance than Option Full may want to consider Option E. For example, after going over their finances, the member and Eligible Spouse/Domestic Partner believe the Eligible Spouse/Domestic Partner can maintain the same standard of living with a 75% continuance after the member dies.

   If a member chooses an option that provides a continuance for an Eligible Spouse/Domestic Partner or a beneficiary, and that person predeceases the member, divorces the member, or separates from the member, the member will not be able to revoke the option chosen at retirement and choose another option.

   If a member who was married at least one year prior to retirement, and on the effective date of retirement, gets a divorce after retirement, the divorce may include an order by the court to provide a continuance to the former Eligible Spouse. The Retirement Plan will follow the court order and the cost of that option will be paid for by the member by reducing the retirement allowance being paid to the member immediately prior to the court order, even if the member is already receiving a reduced allowance. For example, if a member chose Option D at retirement, which included a reduction in the monthly retirement allowance, and must now choose Option C for a continuance to a former spouse, a second decrease in the monthly retirement allowance will occur to provide for the Option C continuance.

Eligible Spouse / Domestic Partner Continuance

   An Eligible Spouse is someone you are married to:

• Continuously for one year prior to your retirement date,
  and
• On your retirement date,
  and
• On the date of your death.

   Divorce or death of your Eligible Spouse after your retirement date cancels the Eligible Spouse benefit.

   A Domestic Partner is someone of the same or opposite gender who qualifies as a Domestic Partner according to the Retirement Plan and is registered with the Retirement Board:

• Continuously for one year prior to your retirement date,
  and
• On your retirement date,
  and
• On the date of your death.

   Termination of Domestic Partnership or death of your Domestic Partner after your retirement date cancels the Domestic Partner benefit.

Eligible Spouse/Domestic Partner
Continuance Percentage Table

• On to Examples of Full, A, and D options