GARS Tier 1 Retirement Benefits

You may retire:

• At age 55 with 8 years of credited service.
• At age 62 with 4 years of credited service.

Your benefit is based on your final average salary and your total credited service. Final average salary is the final salary on your last day of employment for membership dates prior to August 10, 2009. For membership dates on or after August 10, 2009, through December 31, 2010, final average salary is an average of the highest 48 consecutive months out of the last 120 months of service.

You must apply for benefits in order to receive them. Please contact GARS approximately 90 days before your retirement date to request a retirement packet. Your pension will start on the first day following your last paid day of service, or the date you are first eligible, whichever is later. The maximum pension payable to a Tier 1 GARS member is 85% of final average salary.

Contributions made before January 1, 1982 were taxed when you received them. Your contributions after January 1, 1982, were not included in your gross income and therefore are not immediately taxable. However, when you begin receiving benefits, you will be taxed on your contributions accordingly.

Your retirement benefit is based on your final average salary and credited service using the following formula:

3.0% for the first 4 years of service

3.5% for the next 2 years of service

4.0% for the next 2 years of service

4.5% for the next 4 years of service

5.0% for each year after 12 years

For members with at least 4 years of service, benefits payable at age 62 are based on final average salary.

For members with at least 8 years of service, benefits payable at age 55 are based on final average salary.

Example:

A member is age 55, has 20 years of credited service, a membership date prior to 8/10/2009 and a final salary of $57,619:

TOTAL = 85.0%

First 4 years x 3.0% = 12.0%

Next 2 years x 3.5% = 7.0%

Next 2 years x 4.0% = 8.0%

Next 4 years x 4.5% = 18.0%

Next 8 years x 5.0% = 40.0%

Total = 85%

85.0% x $57,619 = $48,976.15 annually or $4,081.35 per month.
 

Example:

A member is age 60, has 20 years of credited service, a membership date between 8/10/2009 and 12/31/2010, and has a 48-month final average salary of $50,000:

First 4 years x 3.0% = 12.0%

Next 2 years x 3.5% = 7.0%

Next 2 years x 4.0% = 8.0%

Next 4 years x 4.5% = 18.0%

Next 8 years x 5.0% = 40.0%

Total = 85%

85.0% x $50,000 = $42,500.00 annually or $3,541.67 per month.

If you retire at age 60 or over, you will receive a 3% pension increase every year on January 1 or July 1 (whichever is applicable) following your first full year of retirement. These annual increases are compounded on your previous year’s annuity. Pension increases are not limited to the 85% maximum.

Example: A member is age 55, has 20 years of credited service, and a final salary of $57,619. The initial retirement annuity is $48,976.15 (85% of final salary). The automatic 3% annual increase (not payable until age 60) would be: 3% x $48,976.15 = $1,469.28 annually or $122.44 per month.

GARS participants elected prior to 8/8/2003 are eligible to earn accruals. The 3% increase also accrues each January 1st for GARS participants who remain in service after age 55 with 20 years of credited service. These increases are payable on January 1 or July 1 following the first full year of retirement at age 60.

Example: Using the table above, a member retires at age 60 in December 2001 with 25 years of credited service. On January 1, 2003, the member would receive a pension increase of 18%.

This option reduces your monthly retirement benefit to provide a lifetime income for your survivors after your death. This election should be filed with GARS at least two years prior to your contemplated date of retirement. This benefit is paid in addition to survivor benefits. If the reversionary annuitant dies after the participant's retirement, the reduced annuity being paid to the retired member will remain unchanged.

As a Tier 1 retiree, your GARS retirement benefit will be suspended if:

• You retired using the Reciprocal Act and exceed the post retirement employment limits in a reciprocal system from which you are receiving retirement benefits.
• You return to a GARS-covered position after retirement.

Retired members who return to a GARS-covered position have an option to:

1. Repay pension benefits already received. After your subsequent retirement, your pension will be recalculated as if you had not previously retired. This may benefit you if your salary upon re-entry is higher than what was used for your previous retirement.
2. Upon returning to service, you will resume contributions to GARS and accrue additional service credit. Upon subsequent retirement, you will be entitled to a retirement benefit consisting of the amount of your original pension, plus the amount of additional service credit earned during your return to service. However, the total pension cannot exceed the total maximum applicable at the date of your last retirement.

• You pay no state income tax.
• You will pay federal tax on most benefits. Specific information will be furnished when benefits are payable.

The best tax treatment for you depends on your individual financial situation. GARS advises all members to check with a qualified tax consultant or financial planner before receiving benefits or refunds.

See the list of systems that participate in the Retirement Systems' Reciprocal Act.