How the Fund Calculates your Benefit

Your retirement benefit is calculated using a formula that includes your total service credit and the average of your monthly pay during your three highest-paid years.

2.75%

x Service Credit*

x Average Monthly Pay

= Calculated Monthly Benefit

*Benefits are prorated for any partial year of service credit.

The following examples show how the formula works for normal retirement and retirement before age 50.

Normal Retirement
Bob retires from the City of Dallas at age 60 with 26 years of service credit. He earned $32,000, $34,000 and $36,000 during his three highest-paid years. His retirement benefit is calculated as follows:

Step 1. Average three highest-paid years

$32,000
$34,000
+ $36,000

= $102,000

$102,000 Divide by 36 months (three years)
÷ 36

= $2,833 Bob's average monthly pay

Step 2. Benefit Percentage

Multiply years of service credit by 2.75% to determine the percentage of average monthly pay to use in calculating the monthly retirement benefit.

2.75%
x 26 Multiply by 26 years of service

= 71.5% Bob's percentage of average monthly pay

Step 3. Monthly Retirement Benefit

Multiply average monthly pay by percentage from step 2.

$2,833
x 71.5%

= $2,025 Bob's estimated monthly retirement benefit

Bob's estimated monthly benefit is $2,025. The actual amount of benefit payments will be different to reflect his choice of benefit option and income tax withholding.

Retirement Before Age 50

Michelle is 48 years old when she retires after earning 30 years of service credit. Her retirement benefit is calculated at $2,000 per month, but because she is retiring before age 50 she will receive 87.2%* of this monthly benefit:

Age at Retirement	Monthly Benefit	Reduction	Reduced Monthly Benefit
48	$2,000	12.8%	$1,744

*Michelle will get 87.2% of her benefit (the reduction is 12.8%) because she is retiring before age 50. For the complete age reduction table, see Chapter 40A-16.

These examples show estimates of retirement benefits. Your actual calculation and benefit amount will vary.

Cost of Living Adjustments

Cost-of-Living adjustments and the health benefit supplement will add to your retirement income.

Each January 1, your base pension benefit amount may be adjusted (up to 5%) to account for changes in the cost of living in the previous year. This is called a cost-of-living adjustment, or COLA.

Your COLA is calculated by using one of two formulas shown below. The formula used will be the one most beneficial to you. Both use the Consumer Price Index of Urban Wage Earners and

Clerical Workers (CPI-W) published by the Bureau of Labor Statistics of the U.S. Department of Labor.

• The percentage change in CPI-W for October of the current year compared to October of the previous year
• The percentage of the annual average change of the CPI-W for the most recent available 12 months .

Health Benefit Supplement

To help you manage the costs of health care after you retire the Fund pays a health benefit supplement in addition to the retirement benefit. You receive $25 per month for each full year of service credit, up to $125 a month. The health benefit supplement is prorated if you have less than five years of service credit.

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