To receive a guaranteed monthly LAGERS benefit, eligible members must become vested and reach retirement age.
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To be eligible to earn a LAGERS retirement benefit, you must:
Work in a LAGERS-covered department
Be a full-time employee
Each LAGERS employer elects which departments to provide LAGERS coverage to. An employer must cover at a minimum, their general department, and may also elect to add police and/or fire department(s). All full time employees within each covered department are LAGERS eligible.
Full time positions for LAGERS purposes are defined as those requiring either 1500, 1250, 1000 hours of work annually. Any employee who works at above the annual hours elected by their employer is required to be covered and any employee under the benchmark is not eligible. Seasonal and contractual workers are not eligible for LAGERS benefits.
To become vested, a member must earn 5 years (60 months) of service credit within the system. The 60 months may be earned with one employer or a combination of LAGERS employers.
Once a member is vested with LAGERS, they are guaranteed to receive a benefit whether they continue their employment with a LAGERS employer until they reach retirement age or terminate and employ outside the LAGERS system.
A retirement age is the age at which a vested member can begin to draw a monthly benefit. Members have both early and a normal retirement ages and some may also be covered under an additional early retirement provision called the Rule of 80. Which age a member choses to retire at can impact the amount of monthly retirement benefit.
Normal Retirement age is the age in which a vested LAGERS member may retire with no reduction in his or her monthly benefit. A general employee’s normal retirement age is 60 and a police officer or fire fighter’s normal retirement age is 55.
**Police and fire department employees are any regular or permanent uniformed employee of a police or fire department. Any civilian employees of these departments and all other employees not meeting the statutory definition are classified as general employees for LAGERS purposes.
Example of a Normal Retirement:
Assume John, a general employee, retires at age 60 with a $3,000 final average salary and 27 years of service credit under the L-7 (1.50%) program:
1.50% x $3,000 x 27 years = $1,215 per month for life
Every vested LAGERS member has the option to individually elect an early retirement. Early retirement allows a member to retire up to five (5) years early of his or her normal retirement age. For a general employee, he or she could retire at age 55, for a police or fire fighter, age 50.
The benefit is calculated in the same manner as a normal retirement, however, there is a reduction in the monthly benefit amount. The reduction is one-half of one percent (0.5%) for each month the benefit is drawn prior to the member’s normal retirement age (6% reduction per year early).
The reduction in the monthly benefit is permanent and does not increase to the unreduced amount upon attainment of a member’s normal retirement age. However, the reduction is designed so that a member who retires at the normal retirement age and another member who chooses an early retirement, all other factors being equal, will withdraw from LAGERS approximately the same amount of money by the time payments cease.
Example of an Early Retirement:
Assume John, a general employee, decides to retire at age 58 with a $3,000 final average salary and 25 years of service credit under the L-7 program:
Reduction: 24 months early x 0.5% per month = 12%
Employee Benefit: 88% of benefit at age 60
1.50% x $3,000 x 25 years = $1,125 x 88% = $990 per month for life
Rule of 80
Rule of 80 is an alternate retirement provision that can be elected by each employer to provide an unreduced early retirement age. This option must be elected by each employer as an alternative to Normal Retirement and may not benefit all employees.
To be eligible for a Rule of 80 Retirement, the sum of an employee’s age and service credit must total the number 80.
If your employer has elected the Rule of 80, your age at hire will determine whether your Rule of 80 age is more or less than your Regular Retirement Age.
A general employee hired after age 40 will reach his or her Normal Retirement Age (60) before his or her Rule of 80 Age. A police officer or fire fighter hired after age 30 will reach his or her Normal Retirement Age (55) before his or her Rule of 80 Age.
If your Rule of 80 Age is greater than your Normal Retirement Age, you are still eligible to retire when you've attained your Normal Retirement Age.
If an employee is eligible for a Rule of 80 Retirement, he or she must go directly from service to retirement. Deferred retirements do not qualify under Rule of 80.
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