Changes in Age and Service Requirements for Normal Retirement in State Retirement Plans, 2009–2011

Ronald K. Snell

March 2012

PDF Version

For more information, contact Luke Martel or Tamara Rivale at NCSL.

This report discusses increases in age and service requirements for normal retirement that state governments enacted from 2009 through 2011. It includes changes in 30 plans for general state employees and teachers in 25 states, and 16 plans for public safety employees in 13 states. In most cases, the changes affect only people hired after the legislation was passed. In a few plans, the changes apply to non-vested members as well.

Some of the same states also increased retirement eligibility requirements for municipal government employees, the judiciary and elected officials. This report focuses on general state employees, teachers and public safety plan members because they have been those most frequently affected by state legislation in period discussed here. Tables in the appendices identify the plans and classes of employees the changes affect.

Normal retirement refers to benefits available when an applicant has satisfied specific age and service requirements. The applicant’s pension is determined by a formula that considers  the applicant’s credited service and final compensation. Most state plans offer alternative combinations of the minimum age and years of credited service that entitle a person to normal retirement benefits.

Most states also allow a person to apply for early retirement at an lower age than required for normal retirement. Early retirement involves reducing an applicant’s pension by an actuarial or percentage calculation from the normal benefit to account for the longer period over which the person will receive benefits. Thus, in a plan where a member would be eligible for normal retirement at 65 with 10 years of service, a 55-year-old member might be eligible for a reduced benefit under early retirement provisions. Early retirement rules are usually revised at the same time as normal eligibility requirements. For the sake of simplicity, changes in early retirement have been omitted from this report.

Part 1 reports changes in age and service eligibility requirements for general state employees and teachers. Part 2 reports similar changes in public safety plans.

PART 1. CHANGES IN AGE AND SERVICE REQUIREMENTS FOR STATE EMPLOYEES AND TEACHERS

 


Table 1. Normal Retirement Based on Age Alone

Only a few state plans provide for normal retirement benefits when a person reaches a specified age without an accompanying service requirement. Of the plans included in this report, those that do so have increased the minimum age for retirement in the past three years.

 

Before the changes reported here: Number of plans

After the changes reported here: Number of plans

Age 60

2

0

Age 62

2

0

Age 65

1

4

One plan added a service requirement to its 65-and-out provision

Total

5

4

 

 

 

Table 2. Specified Age and Service Requirements for Normal Retirement

Age requirements

Before the changes reported here

After the changes reported here

Ages 50 through 59

Seven plans allowed normal retirement within these ages. Six of them required at least 30 years of service for normal retirement.

Only two of the plans continue to allow normal retirement within these ages. Both now require a minimum age of 57 and at least 30 years of service. For most plans the minimum age requirement increased to the range of age 60 to age 62.

Age 60

Fifteen plans set a normal retirement age of 60. Service requirements varied greatly. Six plans required 5 years or less. Eight plans required 10 years or more. 

Only five plans provide for normal retirement at 60. Service requirements range from 8 to 30 years. Age requirements generally moved to the range of age 60 to age 62and two plans increased the minimum age of eligibility to 67.

Ages 62 through 66

Twenty-one plans allowed normal retirement within this age group, most frequently at age 62 (12 plans).

Seventeen of these plans required service of 5 years or less for normal retirement. Three required 10 years of service for normal retirement.

Twenty plans allow normal retirement with longer service requirements than earlier and generally increased age requirements to 65 or 67.

Nine plans require 10 years of service and one requires 25 years of service. Four plans, however, allow retirement when a member reaches 65 regardless of length of service.

Higher than 66

No plan in this study reported an age of eligibility for normal retirement higher than 66.

Five state plans have set a normal retirement age of 67 with service requirements of 5 years in two of them and 10 years in three of them. Two additional plans will provide normal retirement at the member’s Social Security age for full benefits and 5 years of service.

 

 

 



Table 3. X Years and Out

Many state plans permit normal retirement when a member reaches a specified number of years of service regardless of the person’s age. Thirteen of the 30 plans for general state employees and teachers in this report previously had such provisions. Only eight of the 13 plans continue to have comparable provisions after the amendments of the past three years.

Years of service that qualify for normal retirement

Before the changes reported here: number of plans

After the changes reported here: number of plans

20

1

1

25

4

1

29

1

 

30

5

4

33

 

1

35

2

1

Total

13 plans

8 plans

 

 

 

Table 4. Rules of Y

Some state plans have additional provisions that provide for normal retirement when the sum of a member’s age and years of service is a specified number. For example, a person who is 55 years old and has 25 years of service credit complies with the requirements of the Rule of 80. Some plans specify an additional minimum age or service requirement. 

As the chart below suggests, Rules of Y have become a little more common, and have tended to require higher age and service totals.

Rule of Y

Before the changes reported here: number of plans

After the changes reported here: number of plans

75 (minimum age of 60)

1

 

80 (minimum age of 48)

1

 

80 (minimum age of 60)

 

1

80 (with at least 5 years of service)

1

1

85

1

 

90

3

3

90 (minimum age of 55)

 

1

90 (minimum age of 60)

 

3

92 (with at least 35 years of service)

 

2

Total

7 plans

11 plans

 

PART 2. CHANGES IN AGE AND SERVICE REQUIREMENTS FOR PUBLIC SAFETY MEMBERS

Public safety plans, in this report, include a variety of plans for state highway patrol or state police, correctional employees, staff of bureaus of investigation and local governments’ police and firefighters. The report includes changes in 16 plans in 13 states in the period from 2009 through 2011. Nearly half of the states that made significant changes in age and service requirements for general employees or teachers chose not to change plan provisions for public safety members.

Plans for public safety members are designed to provide normal benefits at younger ages and fewer years of service than plans for general state employees and teachers because of the physically and psychologically demanding nature of the occupations covered. Some plans include mandatory retirement ages. Like the plans for teachers and general employees, public safety plans often provide alternative criteria for normal retirement. The alternatives are listed state by state in the tables in the appendices.

Before the changes reported here, 14 of the 16 plans provided for normal retirement by the time a member was 57 years of age, and all allowed for or required retirement by the time a member was 62. One plan allowed for normal retirement at age 45 with 10 years of  earned service, and eight of the 16 provided for normal retirement when members had 20 or 25 years of earned service, regardless of age.

The changes enacted from 2009 to 2011 have tended to keep normal retirement below the age of 62 and required service lengths below 25 years.

 

Table 5. Public Safety Plans That Allowed Normal Retirement at Age 55 or Less
With 10 Years of Service or Less

Former provision

New provision

Age 55 with 6 years of service

Age 60 with 8 years of service

Age 45 with 10 years of service

Age 50 with 10 years of service

Age 55 with 3 years of service

Age 55 with 5 years of service

Age 55 with 3 years of service

Age 55 with 10 years of service

Age 55 with 10 years of service

Age 60 with 10 years of service

 

 

 

Table 6. Public Safety Plans That Allowed Normal Retirement at Ages 50 to 55
With 20 or more Years of Service

Former provision

New provision

Age 52 with 25 years of service

Age 57 with 25 years of service

Age 50 with 25 years of service, or
Age 55 with 20 years of service

Age 60 with 10 years of service

Age 50 with 25 years of service

Age 52.5 with 25 years of service

Age 50 with 20 years of service

Age 55 with 20 years of service

 

 

 

Table 7. Public Safety Plans That Allow Normal Retirement 
After a Stated Number of Years of Service

Former provision

New provision

20 years of service

Age 52.5 with 25 years of service

20 years of service

25 years of service, or
Age 50 with 20 years of service

25 years of service

30 years of service

22 years of service, or
Age 50

25 years of service, or
Age 50

35 years of credited service (including service purchases)

Rule of 92 with 35 years of credited service (including service purchases)

 

Appendices

Appendix 1. Changes in Age and Service Requirements for Normal Retirement - State Plans for General Employees and Teachers, 2009-2011

Appendix 2. Changes in Age and Service Requirements for Normal Retirement - State Public Safety Retirement Plans, 2009-2011

 

Appendix 1. Changes in Age and Service Requirements for Normal Retirement
State Plans for General Employees and Teachers, 2009-2011 

Retirement Plan

Provisions According to Previous Law

New Legislation

 

Colorado Public Employee Retirement Association
(state employees and teachers)
2010

 

  • Minimum age of 50 with 30 years of service
  • Minimum age of 60 with 20 years of service
  • Age 65 with any service
  • Any age with 35 years of service
  • Minimum age of 58 with 30 years of service
  • Minimum age of 65 with 5 years of service

Connecticut State Employees’ Retirement System
(state employees and teachers)

2011

 

  • Minimum age of 60 with 25 years of service
  • Minimum age of 62 with 10 years of service
  • Minimum age of 63 with 25 years of service
  • Minimum age of 65 with 10 years of service

 

Delaware State Employees’ and Teachers Retirement System

2011

 

 

  • Minimum age of 60 with 15 years of service
  • Minimum age of 62 with 5 years of service
  • Any age with 30 years of service
  • Minimum age of 60 with 20 years of service
  • Minimum age of 65 with 10 years of service
  • Any age with 30 years of service

Florida Retirement System
(state employees and teachers)
2011

 

  • Minimum age of 62 with 6 years of service
  • Any age with 30 years of service
  • Minimum age of 65 with 8 years of service
  • Any age with 33 years of service

Hawaii Retirement System
(state employees and teachers)
2011

 

  • Minimum age of 62 with 5 years of service
  • Minimum age of 55 with 30 years of service
  • Minimum age of 65 with 10 years of service
  • Minimum age of 60 with 30 years of service

Illinois State Employees’ Retirement System
2010

 

 

  • Minimum age of 60 with 8 years of service
  • Rule of 85
  • Minimum age of 67 with 10 years of service

 

Notes:
Colorado. Items labeled as “Previous Provisions” governed employees whose membership began before June 30, 2005 and who had five years of service credit by January 1, 2011.

Massachusetts. The Massachusetts plans provide higher multipliers (the percentage of final average salary replaced by a pension benefit) for people with longer terms of service when they retire. The 2011 legislation shifted the scale to provide an inducement for longer service before retirement.

Michigan. The 2010 Michigan legislation closed a defined benefit plan for school employees and replaced It with a hybrid plan. The information in the chart reflects the provisions of the closed DB plan and the DB portion of the hybrid plan.

Sources for Appendix 1:
This report is based upon NCSL’s annual summaries of state pension legislation.

Fifty-state information on age and service requirements for normal retirement in state pension plans is available in Daniel Schmidt, 2010 Comparative Study of Major Public Employee Retirement Systems (Wisconsin Legislative Council, Madison, Wisconsin: December, 2011).

 

Appendix 2. Changes in Age and Service Requirements for Normal Retirement
State Public Safety Retirement Plans, 2009-2011

Retirement Plan

Provisions According to Previous Law

Provisions for New Members

 

Arizona Public Safety Personnel Retirement Plan

Effective 1/1/12

 

  • 20 years of service

 

  • Minimum age of 52.5 with 25 years of service

 

Arizona Correctional Officers’ Retirement Plan

Effective 1/1/12

 

  • 20 years of service
  • For dispatchers, 25 years of service
  • Minimum age of 62 with 10 years of service
  • Rule of 80

 

  • Minimum age of 62 with 10 years of service
  • Minimum age of 52.5 with 25 years of service

 

Colorado Public Employee Retirement Association: State Trooper and Colorado Board of Investigation Plan

Effective 1/1/11

 

 

The plan changes did not affect age and service requirements for normal retirement. However, the legislation reduced benefit provisions for those retiring after the effective date

Under the previous plan, a member retiring at age 50 with 20 years of service would receive a benefit of 42.5 percent of final average compensation. Under the new provisions, a member with the same age and service record would receive 31.2 percent of final average compensation. The changes disproportionately affect members with lower age and service records, and appear to be designed to encourage longer service before retirement.

 

Connecticut State Employees’

Hazardous Duty Employees’ Plan

Effective 7/1/11

 

 

  • 20 years of service

 

 

Earlier of

  • 25 years of service
  • Minimum age of 50 with 20 years of service

Florida Retirement System
Special Risk Class

Effective 7/1/11

 

  • Minimum age of 55 with 6 years of Special Risk Class Service
  • Any age with 25 years of Special Risk Class service
  • Minimum age of 52 with 25 years of combined Special Risk Class service and military service

 

  • Minimum age of 60 with 8 years of Special Risk Class Service
  • Any age with 30 years of Special Risk Class service
  • Minimum age of 57 with 30 years of combined Special Risk Class service and military service

 

Hawaii Employees’ Retirement System (police and firefighters’ plans)

Effective 7/1/12

 

  • 25 years of service
  • Minimum age of 55 with 5 years of service
  • Minimum age of 55 with 25 years of service
  • Minimum age of 60 with 10 years of service

 

Illinois State Employees Alternative Retirement Formula (state police, firefighters, certain security institution personnel)
Effective 1/1/11

 

 

  • Minimum age of 50 with 25 years of service in class
  • Minimum age of 55 with 20 years of service in class

 

  • Minimum age of 60 with 20 years of service in class

 

Maryland Retirement Systems Plan for State Police
Effective 7/1/11

 

  • Age 50
  • 22 years of eligibility service
  • Age 50
  • 25 years of eligibility service

Massachusetts State Employees’ Retirement System: Group 4 (public safety officers, officials,

and certain correction officers)

Effective April 2, 2012

 

  • Minimum age of 45 with 10 years of service credit
  • Minimum age of 50 with 10 years of service credit.
  • The 2011 legislation also changed benefit provisions in a way that encourages longer service before retirement.

 

Minnesota State Retirement System State Patrol Plan

Effective 7/1/10

 

  • Minimum age of 55 with 3 years of service in class
  • Minimum age of 55 with 5 years of service in class

Minnesota State Retirement System Correctional Plan

Effective 7/1/10

 

  • Minimum age of 55 with 3 years of service in class
  • Vesting will be gradual, beginning at 50% after 5 years of service and reaching full vesting after 10 years of service. Unreduced retirement benefits would thus be available at
  • Minimum age of 55 with 10 years of service

 

 

Missouri Highway Patrol Employees’ Retirement System: Uniformed Patrol Plan

Effective 1/1/11

 

  • Age of 60 with 5 years of service (mandatory retirement age)
  • Rule of 80 with a minimum age of 48
  • Age 60 (mandatory retirement age; no service requirement)
  • Minimum age of 55 with 10 years of credited service

 

Nevada Retirement System Plan for Police and Firefighters

Effective 1/1/10

 

  • Minimum age of 55 with 10 years of service
  • Any age with 25 years of service
  • Minimum age of 60 with 10 years of service

 

New Hampshire Retirement System Group II (state and some local police and firefighters)

Effective 7/1/12

 

  • Minimum age of 50 with 25 years of service
  • Minimum age of 52.5 with 25 years of service

New Jersey Police and Firefighters’ Retirement System Tier 3 (state plan for local government employees)

Effective June 28, 2011

 

  • Tier 1 (member before 1/1/2000):
    Minimum age of 55, any amount of service
    Any age with 20 years of service
  • Tier 2:
    Minimum age of 55,  any amount of service

 

  • 2011 legislation increased contribution requirements and reduced benefit provisions for new members, but did not alter age and service requirements from Tier 2.

 

New Jersey State Police Retirement System Tier 2

Effective May 21, 2010

  • 20 years of service; mandatory at age 55
  • 2010 legislation changed contribution requirements and reduced benefit provisions for new members, but did not alter age and service requirements fromTier 1.

 

 

Pennsylvania State Employees’ Retirement System State Police Officers’ Plan

Enacted 2010; effective on expiration of current bargaining agreement

 

  • Minimum age of 50 with a minimum of 20 years of service in the classification
  • Any age with 35 years of credited service

 

  • Minimum age of 55 with a minimum of 20 years of service in the classification
  • Rule of 92 with a minimum of 35 years of credited service

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sources for Appendix 2:
This report is based upon NCSL’s annual summaries of state pension legislation.

Additional information has been taken from state retirement system plan descriptions at the following sources:

Arizona:
http://www.psprs.com/sys_psprs/Forms/PS%202011-12/2011-PSPRS-SummaryOfBenefits-Final.pdf
http://www.psprs.com/sys_corp/Forms/CORP%202011-12/2011-CORP-SummaryOfBenefits-Final.pdf

Colorado:
https://www.copera.org/PDF/5/5-16.pdf

Florida:
http://www.myfrs.com/portal/server.pt/gateway/PTARGS_0_2_582_274_0_43/knowledgebase/user/FaqDisplay/new_FaqDisplay/displayFaqCategoryDetails.do?categoryId=101#39

Illinois:
http://www.state.il.us/srs/PDFILES/Tier%201/tier1_active.pdf
http://www.state.il.us/srs/Tier2/pubhandbooks_sers2.htm

Maryland:
http://www.sra.state.md.us/Participants/Members/Downloads/Handbooks/BenefitHandbook-MSP.pdf

Massachusetts:
http://www.mass.gov/treasury/docs/retirement/retguide.pdf

Minnesota:
http://www.msrs.state.mn.us/ptrl/Elgb.htmls
http://www.msrs.state.mn.us/corr/Elgb.htmls

Missouri:
http://www.mpers.org/files/DDF/2007%20Year%202000%20Plan%20w%20Cover.pdf
http://www.mpers.org/files/DDF/Summary%20of%202011%20Tier.pdf

New Hampshire:
http://www.nhrs.org/documents/Legislative_Tracker_2011_Final.pdf
http://www.nhrs.org/documents/GroupIItransitional.pdf

New Jersey:
Police and Firefighters:  http://www.state.nj.us/treasury/pensions/epbam/exhibits/handbook/pfrsbook.pdf
State Police: http://www.state.nj.us/treasury/pensions/epbam/exhibits/handbook/sprsbook.pdf

Pennsylvania:
http://www.portal.state.pa.us/portal/server.pt?open=514&objID=594007&mode=2