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Project Income from Defined Benefit Retirement Plan - Worksheet 3

Two examples are provided with this worksheet:
  • Example 1 is an employee who starts at age 25, quits at age 40 and draws benefits at age 55
  • Example 2 is an employee who starts at age 25 and works until drawing benefits at age 55
  • In both examples, initial monthly compensation is $2,000
The worksheet below can help you calculate the potential income available from the Defined Benefit Retirement Plan. You will need to use Table 4. You may wish to calculate the potential income several times and change the following assumptions:
  • Years of Service Credit and Membership Service at Retirement
  • Compensation Increases resulting in Highest Average Compensation
  • Years until Retirement
Both of the following examples assume Years of Service Credit and Membership Service are the same.
They may not be the same in your planning.
  Example1 Example 2 Your Planning
Years of Service Credit and
Membership Service At End of
Working Years		 15 years 30 years  
Multiplier:
If < than 25 years of Membership
Service: .017857
If = or > than 25 years of Membership
Service: .02		 .017857 .02  
Current Monthly Compensation $2,000 $2,000  
Anticipated Compensation Increases
and Years Working		 2%
15		 2%
30		  
Factor from Table 4
(to determine Highest Average
Compensation)		 1.307 1.758  
Projected Highest Average
Compensation		 $2,000 X 1.307
= $2,614		 $2,000 X 1.758
= $3,516		  
Initial Projected Monthly Benefit
Life Only Income at Retirement

Multiplier X Years of Service Credit
X Highest Average Compensation 		.017857 X
15 X
$2,614

= $700		 .0200 X
30 X
$3,516

= $2,109		  
Early Retirement Reduction Factor,
if full Service Retirement is not
reached (See the Early Retirement
Factor Table on page 5 of DBRP
Basics Booklet) 		.700
30 years is full
Service
Retirement		 N/A
30 years is full
Service
Retirement		  
Life Only Income Reduced for Early
Retirement
Initial Projected Amount		 $700 X
.700
= $490		 N/A  
  1. Compare Retirement Income Needs to Projected PERS Income - Worksheet 4
  2. Additional Considerations