With the PERA Defined Benefit (DB) Plan, you’ll receive income in retirement that you can’t outlive. The amount you’ll receive each month depends on three important factors: Your highest average salary, the amount of service credit you have accrued, and your age at retirement.

How do we calculate your benefit? The basic formula for a full service, single-life retirement benefit is: your highest average salary x 2.5% x your years of service = your monthly lifetime benefit amount.

Highest Average Salary (HAS)

Your highest average salary (HAS) is an average of your highest years of earnings while working for a PERA employer. It is a monthly average, calculated using periods of 12 consecutive months of service credit during which you made contributions to PERA. The 12-month periods do not have to be consecutive or your last years of employment.

The number of years we use for your HAS calculation depends on when you became a member.

• Three years of your highest salaries are used if you had five years of service credit as of Jan. 1, 2020.
• Five years of your highest salaries are used if you did not have five years of service credit as of Jan. 1, 2020.

HAS is calculated differently for DPS benefit structure members who were eligible for retirement on Jan. 1, 2011 and judges; see the Your PERA Benefits booklet for details.

In addition, there is an annual salary increase limit that may apply in your HAS calculation if you had raises year-over-year exceeding these limits in your years of highest earnings. If you began your PERA membership on or before December 31, 2006, and you were eligible to retire on January 1, 2011, your annual limit is 15%. Otherwise, your annual limit is 8%. That means when you retire and we calculate your HAS, any income over the limit in a given year will not be included in your HAS. For example, if your salary increased from $50,000 to $55,000 in a year (a 10% increase) and you’re subject to the 8% cap, we would use $54,000 in your HAS calculation for that year.

When you retire, you’ll earn a percentage of your HAS as your monthly benefit. The percentage will depend on your service credit and age at retirement. PERA’s HAS tables can give you an idea of the percentage of HAS you can earn with different combinations of age and service.

Log in to your member account to see your current HAS or to use the HAS calculator.

Service Credit

Your service credit is how long you’ve been working for a PERA employer and making contributions to your account.

In most cases, you earn a month of service credit for each month of employment when your salary is at least 80 times the federal minimum wage (currently $7.25 per hour). For salary that is less than that, service credit is prorated. Service credit can accrue differently for employees in the School and Denver Public Schools (DPS) divisions. See the School and DPS Divisions Service Credit fact sheet for details.

You may be able to purchase service credit based on a refunded/rolled over PERA account or other employment. Purchasing service credit may allow you to retire earlier or receive a larger benefit.

Age

Your service credit and age determine your eligibility for benefits. Your age will be calculated at the time you apply for a retirement benefit, which means you can leave your account at PERA if you are no longer working for a PERA employer and receive a benefit when you become eligible.