Return to:
Computing Your Benefit
Your benefit at retirement is based on a formula consisting of:
- your five successive years of highest earnings
- years of service
- age at retirement
Service Credit Percent
Service years and months are converted to a percentage of your average monthly salary through two formulas—the Step formula or the Level formula.
If you were hired for the first time after June 30, 1989, MSRS must use the level formula. If you were hired before July 1, 1989, MSRS can compute your annuity using either formula. If you are eligible for both, MSRS will use the one that gives you the higher annuity, while considering any early-retirement adjustment.
Step Formula
You receive 1.2% for each year of service for the first 10 years, then 1.7% for each year thereafter. This formula is used in your computation only if your Minnesota public retirement coverage began before July 1, 1989.
Level Formula
You receive 1.7% for all years of service. Anyone hired for the first time after June 30, 1989, must use this formula.
Example (Single-Life annuity)
You are an employee who retires at age 65 with 20 years of service and an average high-year income of $30,000 ($2,500 per month). Your allowable-service percentage is calculated at 1.2% for the first 10 years, then 1.7% for the other years under the step formula. Your allowable-service percentage is calculated at 1.7% under the level formula. In this case, the level formula is used because it provides a greater benefit.
| Step Formula | ||
|---|---|---|
| Employee's Age Service Service-credit percentage |
65 years 20 years 10 years x 1.2% = 10 years x 1.7% = Total Credit |
12.0 17.0 29% |
| Service-credit percentage times annual salary | 29% x $30,000 |
$8,700
|
| Monthly Benefit |
$725
|
|
| Level Formula | ||
|---|---|---|
| Employee's Age Service Service-credit percentage |
65 years 20 years 20 years x 1.7% = Total Credit |
34% 34% |
| Service-credit percentage times annual salary |
34% x $30,000 |
$10,200
|
| Monthly Benefit |
$850
|
|
In this example, MSRS pays $850 per month in addition to any payment you may receive from Social Security.
Employee Benefits
- 100 Donhowe Building
- 319 15th Avenue S.E.
- Minneapolis, MN 55455
- 612-624-9090
- 800-756-2363
- 612-626-0808 (fax)
- benefits@umn.edu