Benefit Calculation - Step Formula

The Step formula is used most frequently for employees who retire under the Rule of 90 or under age 63. The Step formula allows retirement as early as age 55 or at any age with 30 or more years of service.

Important! If you became a member of the General Plan before July 1, 1989,  your retirement benefit is calculated using either the Step formula or Level formula, whichever provides a higher monthly retirement benefit.

How we calculate your benefit
Under the Step formula you receive 1.2% for the first 10 years of service, and then 1.7% for each year after that. Here is an example of how we calculate the factor for a member who has 30 years of service:

1.2 x 10 years = 12% (first 10 years of service)

1.7 x 20 years = 34% (remaining 20 years of service)

12% + 34% = 46%

Full retirement benefit under the Step formula
You can retire with full retirement benefits

  • at age 65.

  • if your age and years of service total 90 or more (Rule of 90). For example, if you are age 60 with 30 years of service, you would qualify for Rule of 90.

  • at age 62, with 30 years of service


Early retirement under the Step formula
Under the Step formula, the monthly benefit is reduced by 3% for each year an employee retires prior to age 65. For example, the monthly benefit of an employee retiring under the Step formula at age 58, would be reduced by 21% (7 years X 3%).

  • If 30 or more years of service: benefits are reduced by 3% for each year under age 62. For example, if retiring at age 58, the benefit would be reduced by 12% (4 years X 3% ).

  • If Rule of 90, there is never a reduction in monthly benefits, regardless of age at retirement.

For more detail
Please contact MSRS at 1-800-657-5757, or see the General Employees Retirement Plan Handbook.