Retired Member Resources

Retired Member FAQ's

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How is the amount of my retirement allowance computed?

Your service retirement allowance is based on your years of credited service, your age and your average final compensation. "Average final compensation" means the average of the annual compensation paid you by the City during the period of 36 consecutive months of service which produces the highest average. The 36 consecutive months used must occur within your last 120 months of service. You have the option of receiving an Unused Sick Leave on Retirement payout of 25% of your unused sick leave (normally 50%) and having the value of the payout added to the earnings used to compute your average final compensation. CET changes: Unused Sick Leave on Retirement- Any sick leave accumulated after July 17, 2012 and remaining unused at retirement will not be paid out. Sick Time Inclusion in Final Average Compensation -The inclusion of sick time in an employee's Final Average Compensation will be discontinued for certain unions based on the CET agreement. The implementation date is December 1, 2012.

Your retirement allowance consists of the following 3 amounts: 1. A basic pension of $12 for each full year of service, but not to exceed $120. 2. A pension allowance equal to the sum of 1.6% times your first 10 years of credited service, plus 1.8% times each year of service greater than 10 years up to 20 years, plus 2.0% times each year of service greater than 20 years up to 25 years, plus 2.2% times each year of service over 25 years; multiplied by your average final compensation. CET changes:The multiplier has been reduced to 1.5%for service time earned subsequent to July 17, 2012 and the escalator eliminated. The implementation date is December 1, 2012. 3. An annuity, provided you made contributions for it and you do not withdraw those funds at the time of retirement. The annuity portion depends on the balance in your account and your age on your retirement date.

Typical Estimated Monthly Straight Life Retirement Allowance

(Based on Basic Pension of $120 plus 1.5% for 1st 10 years of service, plus 1.7% for 11 to 20 years of service, plus 1.9% for service over 20 years)

Average Final Comp.

Years of Service

10 15 20 25 30 35 40
$24,000 $330.00 $ 510.00 $ 690.00 $ 890.00 $ 1,110.00 $ 1,330.00 $ 1,550.00
26,000 356.57 551.67 746.67 963.33 1,201.67 1,440.00 1,678.33
28,000 383.33 593.33 803.33 1,036.67 1,293.33 1,550.00 1,806.67
30,000 410.00 635.00 860.00 1,110.00 1,385.00 1,660.00 1,935.00
32,000 436.67 676.67 916.67 1,183.33 1,476.67 1,770.00 2,063.33
34,000 463.33 718.33 973.33 1,256.67 1,568.33 1,880.00 2.191.57
36,000 490.00 760.00 1,030.00 1,330.00 1,660.00 1,990.00 2,320.00
38,000 516.67 801.67 1,086.67 1,403.33 1,751.67 2,100.00 2,448.33
40,000 543.33 843.33 1,143.33 1,476.67 1,843.33 2,210.00 2,576.67
42,000 570.00 885.00 1,200.00 1,550.00 1,935.00 2,320.00 2,705.00
44,000 596.67 926.67 1,256.67 1,623.33 2,026.67 2,430.00 2,833.33
46,000 623.33 968.33 1,313.33 1,696.67 2,118.33 2,540.00 2,961.67
48,000 650.00 1,010.00 1,370.00 1,770.00 2,210.00 2,650.00 3,090.00
50,000 676.67 1,051.67 1,426.67 1,843.33 2,301.67 2,760.00 3,218.33
52,000 703.33 1,093.33 1,483.33 1,916.67 2,393.33 2,870.00 3,346.67
54,000 730.00 1,135.00 1,540.00 1,990.00 2,485.00 2,980.00 3,475.00
56,000 756.67 1,176.67 1,596.67 2,063.33 2,576.67 3,090.00 3,603.33
58,000 783.33 1,218.33 1,653.33 2,136.67 2,668.33 3,200.00 3,731.67
60,000 810.00 1,260.00 1,710.00 2,210.00 2,760.00 3,310.00 3,860.00

Federal Social Security benefits are in addition to the amounts shown. Current Social Security information can be obtained from any office of the Social Security Administration.

Posted in: Active Employees, Retired Members

Can I coordinate my retirement allowance with my social security benefit?

Yes. If you retire before age 65, you may elect the Social Security coordination option. Under this option, you would be paid an increased allowance until you become eligible to receive Social Security benefits at either age 62 or 65, and a reduced retirement thereafter.

To Illustrate: You are age 60 with a projected retirement allowance of $1,000 per month and an estimated Social Security benefit at age 62 of $680 per month. Your monthly retirement income until age 62 will be $1,000. When you begin to receive a Social Security benefit at age 62, your estimated monthly income could increase to $1,680 ($1,000 plus $680). You could level the amount of your monthly income by electing the Social Security coordination option at the time you retire. Under this option, your retirement allowance until age 62 could be increased to $1,550. At age 62, your estimated retirement allowance would be decreased to $870. The sum of your reduced estimated retirement allowance ($870) and your estimated Social Security benefit ($680) could be $1,550 which is the same estimated amount you were receiving before age 62, so your monthly income should remain level.

  Without Social Security Options  With Social Security Options
Source of Income Payable Monthly until Age 62 Payable Monthly at Age 62  Payable Monthly until Age 62 Payable Monthly at Age 62
Estimated Retirement Allowance $1,000 $1,000 $1,550 $870
Estimated Social Security Primary Benefit 0 680 0 680
Total $1,000 $1,680 $1,550 $1,550

Posted in: Active Employees, Retired Members

What if I become totally and permanently disabled?

If you are granted a duty connected disability retirement and you are under the age of 60, you would receive a disability allowance consisting of a pension computed at two thirds of the average final compensation at date of disability, but not to exceed $9,000 per year ($5,700 per year if retired prior to January 1, 1999), plus an annuity allowance based on your annuity balance on the effective date of disability.At the age of sixty or with 30 years of service credit (30 years & age 55 if hired after January 1, 1996), the disability allowance would end, and you would then receive a retirement allowance consisting of an annuity (assuming that you have elected to contribute to the Defined Contribution Plan) (Annuity Savings Fund) which you would have received had you continued to work at the pay level of your final compensation, at your annuity percentage in effect the previous June 30, and a pension based on the years that you worked for the City the years that you were on the duty disability roll. Medical coverage is available with the payment of appropriate co-pays. If you are granted a non-duty connected disability retirement, have ten or more years of credited service, and, you are under the age of sixty, you will receive a disability allowance consisting of a pension computed in the manner of a service retirement pension but limited to a maximum of $6,000 per year ($3,900 per year if retired prior to January 1, 1999), and, an annuity allowance based on your annuity balance on the effective date of disability (assuming that you have elected to contribute to the Defined Contribution Plan) (Annuity Savings Fund). At age sixty, the disability allowance is recomputed as a service retirement allowance; however, no credit is given for the years you were receiving the non-duty disability allowance. Medical coverage is available with the payment of appropriate co-pays.

Upon retirement at the age of sixty, or with 30 years of service (30 years & age 55 if hired after January 1, 1996) all disability recipients can choose either a straight life retirement allowance or a Joint and Survivor retirement allowance.

Posted in: Active Employees, Retired Members

Are retirement benefits subject to federal, State of Michigan or local income tax?

Defined Benefit (Pension) Plan. Generally, only federal income tax will be a factor when you receive benefits from the Defined Benefit (Pension) Plan. Pension benefits are currently exempt from the City of Detroit and the State of Michigan income taxes. Prior to your retirement you will be given withholding forms relative to each plan. Unless you fill out the form instructing the Board of Trustees how much to withhold, tax will be withheld in accordance with current Federal Law. Your tax obligation will depend on the federal, state and local income tax laws in effect when you retire. You should consult your tax advisor with respect to your individual tax matters.

Defined Contribution (Annuity) Plan. If you elect a full or partial lump sum refund, you will be subject to tax on interest earnings and you may be subject to pay additional taxes depending upon certain circumstances.

The tax laws change from time to time. The Board of Trustees cannot and does not provide tax advice. You should obtain this advice from your own tax advisor so as to be aware of your tax obligations and consequences.

Posted in: Active Employees, Retired Members

When I begin my service retirement, what happens to the fringe benefits I currently receive under the employee benefit plan?

Hospitalization and Medical Insurance

Please be patient, we are in the process of updating information.

Death Benefit Plan

If a retiree has a minimum of ten years of service, at a cost of $1.08 per year, the retiree may choose to be insured for $1,860. This benefit is increased by $93 for each year of service, in excess of ten (10) years. The Death Benefit Plan is administered by the Trustees of the Employees Benefit Plan.

Life Insurance

Upon retirement, you may arrange to convert your group term life insurance policy to a regular individual policy. The current carrier of group term coverage for City employees is the MetLife Insurance Company.

Dental Program

Retiree and spouse are eligible for dental coverage. Current carriers are Blue Cross and Golden Dental.

Optical Program

Retiree and spouse are eligible for an optical program currently administered by Heritage Optical.

Posted in: Active Employees, Retired Members

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