20
(Continued from page 19)
taught continuously for 15 years and
thus has 15 years of prior service
credit which at age of 61 will entitle
him to receive $37.50 per month for
life. However, he has 15 years of future
service before reaching retirement age.
If his salary is $200 per month, the
future service will provide a pension of
15/30 of half pay or 15/30 of $100
which equals $50. This, added to his
prior service pension of $37.50, makes
a total retirement income of $87.50 per
month.
Large number of employees are curi-
*ous about the relative amount of re
tirement income they would receive if
they elected to contribute at the rate of
5% rather than accepting the actuarial
fixed rate. There are literally hundreds
of thousands of different combinations
possible. For that reason it is imprac
ticable to try to design a chart showing
all the possibilities.
The chart below, however, illustrates
the difference between what one may
expect by using various contribution
rates at different ages and at various
salary levels. It also shows for those
members who receive more than $200 a
month the approximate difference in
pensions provided by contributing on
the basis of all of their salary or on $200
per month of salary only. The chart
does not include any pensions provided
through prior service. In estimating an
individual’s total retirement income the
prior service pension will need to be
added:
APPROXIMATE FUTURE SERVICE PENSIONS
Based on Various Contribution Methods
Does not include pensions created through prior service
Sex
A ge
Salary
F ix ed R ate
P en sion at
F ixed R ate
P en sio n at
5%
M
M
M
M
M
F
F
F
F
35
40
45
55
60
30
40
50
60
$150
180
140
200
200
125
140
160
200
6.60%
7.00
7.43
8.34
8.84
5.39
7.98
9.00
10.09
$75.00
75.00
46.60
33.33
16.66
62.50
58.25
40.00
16.66
$56.81
53.57
31.40
19.98
9.41
57.97
36.54
22.22
8.25
Sex
A ge
Salary
M
M
M
M
F
F
F
40
50
55
60
40
50
55
F ix ed
R ate
P en sio n
F ix ed R ate
T otal Salary
$225
250
275
300
220
240
250
7.00%
7.87
8.34
8.84
7.98
9.00
9.54
$88.53
56.25
39.57
20.82
87.49
55.00
37.49
P en sio n
P en sion
F ix ed R ate
5%
$200 Only T otal Salary
$83.33
50.00
33.33
16.66
83.33
50.00
33.33
$63.24
35.73
23.73
11.77
54.82
30.54
19.64
P en sio n
5%
$200 O nly
$59.52
31.76*
19.98
9.42
52.21
27.77
17.46
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