Calculate your pension benefit

 

We strongly advise you to contact the pension office to verify what your pension would be. They will be glad to do the calculations. Call them in Dover at (302)739-4208.

You can also go to their web site, and click on the calculator. Enter your three year compensation total, your years of service, and if you have any reason for the .2% penalty, enter that as well, and their calculator will give you an estimate of your monthly pension amount.

To begin calculating your pension benefit, no matter which formula you choose, you need to determine your Final Average Compension. To do that, take your highest three years of salary (an improvement made in 1999 from five years), whenever they might have occurred, and average them. Divide this average by twelve to get the monthly Final Average Compension (FAC).

Then, to determine the monthly pension, you multiply your monthly FAC times .020 for service time prior to Jan. 1, 1997; and .0185 for service time after December 31, 1996 (an improvement from .018 made in 2001), and then then multiply these figures times the number of years involved with each multiplier. This is slightly more difficult than pension calculations in the past because two calculations are involved.

All pensions are calculated in the same way, no matter what their type. And your pension is based on your entire salary, both the local and state portions.

Here is how a pension is calculated as of July 1, 2004.

 

Step 1:

 

Add your highest three years of salary and divide by three to determine your Final Average Yearly Compensation.
Year 1 $34,200
Year 2 $34,600
Year 3 $35,000
TOTAL: $103,800 divided by 3 years = $34,600 Final Average Yearly Compensation

 

Step 2:

 

$34,600 divided by 12 months = $2,883.33 Final Average Monthly Compensation (FAC)

Step 3: (for a retiree with 30 years of service as of January 1, 2004)

$2,883.33 (FAC) x .020 x 22 years of service (service prior to 1/1/97) = $1,268.67
$2,883.33 (FAC) x .0185 x 8 years of service = $426.73
Monthly pension total of: $1,695.40

Example #1
Employee retiring in 2005 at age 60 with 30 years of service and a Final Average Compensation (FAC) of $1,000 per month.
$1,000 (FAC) X .02 X 22 years prior to 1/1/97 = $440.00
$1,000 (FAC) X .0185 X 8 years after 12/31/96 = $148.00
$440.00 + $148.00 = $588.00 monthly pension amount
Upon the death of the employee, his or her eligible survivor will receive a state pension benefit of $294 per month (1/2 of the pension the employee is eligible to receive at the time of his or her death).

Example #2
Employee retiring in 2004 at age 60 with 25 years of service and a Final Average Compensation (FAC) of $2,000 per month.
$2,000 (FAC) X .02 X 17 years prior to 1/1/97 = $680
$2,000 (FAC) X .0185 X 8 years after 12/31/96 = $296
$680 + $296 = $976 monthly pension amount
Upon the death of the employee, his or her eligible survivor will receive a state pension benefit of $488 per month (1/2 of the pension the employee is eligible to receive at the time of his or her death).

Example #3
Employee retiring in 2005 at age 55 with 15 years of service and a Final Average Compensation (FAC) of $1,000 per month
$1,000 (FAC) X .02 X 7 years prior to 1/1/97 = $140
$1,000 (FAC) X .0185 X 8 years after 12/31/96 = $148
$140 + $148 = $288
Subtract actuarial reduction of 0.2% X 60 (number of months under age 60) = 12% X $288 = $34.56
$2884 - $34.56 = $253.44 monthly pension benefit

Penalty reminders:
If you retire at age 60, there is no penalty if you have at least 15 years of service. Also, if you have 30 years of service, you may retire at any age with no penalty.
The penalty that is calculated is .2% times the number of months you are shy of thirty years or age 60, whichever applies.