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Your annual pension benefit is based on three factors:
- The number of years of service credit at retirement,
- The average of the your highest three consecutive years of compensation (usually the final three years of employment),
- The multiplier (either 2.22% or 2.50%) selected by you.
The CRS uses the two following formulas for determining the annual pension benefit:
| 2.50% Service Multiplier | X | Average Highest Compensation | X | Years of Service |
| Or, |
| 2.22% Service Multiplier | X | Average Highest Compensation | X | Years of Service |
Terms to Know
Here are some basic terms to help understand how your retirement benefit is calculated:
Service Multiplier. The multiplication factor used in the retirement benefit formula. Members hired prior to July 12, 1998 and retiring on or after May 1, 1999 were given a one-time irrevocable option to choose the benefit multiplier that they wanted to utilize upon their retirement. If you were hired prior to October 1, 1999 but did not select an option, your retirement allowance will be based on the 2.50% multiplier. If you were hired on or after July 12, 1998 your retirement will be based on the 2.50% multiplier.
The formula that uses the 2.22% multiplier includes overtime compensation and the lump-sum payment for the unused vacation, unused sick-pay, etc. in the calculation of the average highest compensation. The formula that uses the 2.50% mulitiplier does not include overtime or the lump-sum payment in the calculation of average highest compensation.
Average Highest Compensation. The average of your highest three consecutive years of compensation (usually your final three years of service).
Years of Service. You earn full service credit for each year in which you work full-time from the date of your enrollment in the Retirement System to the date of your retirement. Part-time employees receive service credit in proportion to their actual service. In other words, if you average 20 hours work per week during a one-year period, you would receive one-half year of service credit.
An example:
Let's look at an example that shows how the formula is used to calculate a retirement benefit.
Assume that:
- Your average highest compensation is $40,000.
- You have 30 years of service when you retire at any age.
- You earned $6,000 in overtime pay during the three-year period and have a lump-sum payment of $9,000, which increases your average salary by $5,000 ($6,000 + $9,000) = $15,000 / 3 years = $5,000 per year.
Depending on the multiplier selected/assigned to the employee, the retirement benefits would be calculated as follows:
| Service Multiplier | X | Average Highest Compensation | X | Years of Service | = | Annual Retirement Benefit |
| |
| 2.50% | X | $40,000 | X | 30 | = | $30,000 |
| 2.22% | X | $45,000 | X | 30 | = | $29,970 |
Under the above assumptions, the 2.50% multiplier provides a monthly retirement allowance of $2,500 and the 2.22% multiplier provides a monthly retirement allowance of $2,497.50
See the benefits estimator page to calculate unofficial estimate of an employees annual pension benefit. (Official estimates are prepared by the retirement division at the request of a member.
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The CRS offers a variety of payment options that give you the flexibility to select the kind of payments that best fit your circumstances and retirement needs. Under the regular option explained above, the benefit is paid to you during your lifetime only and no further payments are made to your beneficiary. However, four additional payments options are available that allow your beneficiary to continue to receive payments in the event you die first.
If you are married, you must select one of the four options described below unless your spouse completes a "Spousal Waiver of Joint and Survivor Annuity" which would permit you to choose the regular option. The following options provide a reduced benefit to you during your lifetime, but provide income to your spouse or designated beneficiary in the event of the your death.
- Option 1 - 100% Joint and Survivor Payment: In the event you die first, your surviving spouse or designated beneficiary receives 100% of the reduced benefit for the remainder of his or her lifetime.
- Option 2 - 50% Joint And Survivor Payment: In the event you die first, your surviving spouse or designated beneficiary receives 50% of the reduced benefit for the remainder of his or her life.
- Option 3 - 66 2/3% Joint and Survivor Payment. In the event you die first, your surviving spouse or designated beneficiary receives 66 2/3% of the reduced benefit for the remainder of his or her lifetime. If your spouse or designated beneficary should die before you, you would receive 66 2/3% of the reduced benefit for the remainder of your life.
- Option 4 - 80% Joint And Survivor Payment. In the event you die first, this option provides your surviving spouse or designated beneficiary with 80% of the reduced benefit for the remainder of his or her lifetime. If your spouse or designated beneficiary dies first, you receive 80% of the reduced benefit for the remainder of your life.
To better understand this, let's look at how these payment options could affect the monthly payments. In reviewing this example, keep in mind the payment amounts displayed are for illustration purposes only. The impact that selecting an option has on reducing the monthly retirement allowance can vary significantly from one member to the next. Generally, the greater the age difference between you and your spouse or designated beneficiary, the greater the difference between the regular payment and the option payments.
Suppose you retire at age 60 with a regular retirement benefit of $2,500 per month and your spouse is age 55. The chart below shows how the different payment options affect the monthly retirement benefit and the subsequent survivor benefits:
| Option | Monthly retirement benefit… | If member dies first, the beneficiary receives… | If beneficiary dies first, the member receives… |
| Regular Payment (Straight Life Annuity) | $2,500.00 | $0.00 | $2,500.00 |
| Option 1 -100% Joint and Survivor Payment | $1.980.75 | $1,980.75 | $1,980.75 |
| Option 2 - 50% Joint and Survivor Payment | $2,210.25 | $1,105.13 | $2,210.25 |
| Option 3 - 66 2/3 Joint and Survivor Payment | $2,214.25 | $1,476.16 | $1,476.16 |
| Option 4 - 80% Joint and Survivor Payment | $2,114.50 | $1,691.60 | $1,691.60 |
| The factors for all options depend upon your age and your beneficiary's age at the time of your retirement. These factors are on file at the Retirement Office for your use. |
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The CRS allows you to retire early, although with a reduced pension, if you have at least 25 years of service and have reached age 55. The benefit is reduced to take into consideration the longer period of time that you will receive retirement payments as well as the shorter amount of time that you will work and make contributions to the System. The following chart shows the approximate percentage of the retirement allowance you would receive if you elect to retire prior to age sixty without thirty years of service.
| If You Retire At Age: | % of Regular Allowance |
| 55 | 61.8% |
| 56 | 67.8% |
| 57 | 74.8% |
| 58 | 82.0% |
| 59 | 90.4% |
| 60 | 100% |
This means that if you retire at age 58 with 28 years of service and your average highest compensation is $40,000, your benefit would be calculated as follows:
| Service Multiplier | X | Average Highest Compensation | X | Years of Service | = | Annual Benefit | X | Reduction Percentage | = | Reduced Benefit |
| |
| 2.5% | X | $40,000 | X | 28 | = | $28,000 | X | 82.0% | = | $22,960 |
Because you have elected to retire before completing 30 years of service and start receiving benefits immediately, the annual retirement allowance is reduced by 18.0% from $28,000 to $22,960.
The table above reflects the early retirement percentages when you retire the same month as your birthday. Additional credit is given for every month of service beyond your birthday. For example, if you elect to retire early at age 55 and six months, you would receive 64.8% of the regular allowance. If you retire early at age 58 and four months, you would receive 84.8% of the regular allowance.
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The CRS provides benefits to your spouse and eligible dependants in the event you die before retirement. In addition to the monthly payments described below, the CRS also provides health care coverage for eligible survivors.
If you die prior to retirement, your designated beneficiary receives your accumulated contributions to the CRS plus 2% interest compounded annually. If you had at least 18 months of service at the time your death, your the designated beneficiary also receives:
- A lump sum survivor benefit payment equal to one-half of the pay earned in the 12 months prior to the members death, and
- Monthly survivor benefits.
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If you are eligible for retirement (30 years of service, age 60 and five years of service, or are age 55 and 25 years of service), you may elect to choose an option prior to retirement. By choosing this alternative, the beneficiary does not receive the survivor benefits described above. Instead, the beneficiary would receive the same benefit that would have been received had you retired the day before you died (Option 1) .
If you are eligible to retire but have not selected an option and are survived by a spouse who was designated as the sole primary beneficiary for the survivor benefit, the spouse may elect to receive:
- The survivor benefits explained above, or
- The option 1 (100% Joint and Survivor) retirement benefit that spouse would have received had the member retired the day before death. The $7,500 retirement death benefit would also be paid under Option 1.
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If you have 20 years of service, you may choose a payment option even though you are not yet eligible for retirement.
If you select a payment option under this provision and then die before becoming eligible for retirement, your beneficiary will begin receiving retirement benefits at the time you would have reached age 60 or would have reached 30 years of service, whichever comes first. However, your beneficiary would then not be eligible to receive the survivor benefits.
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When you die after retirement, the CRS pays your their designated beneficiary a one-time death benefit payment of $7,500 .
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If you terminate employment with the City for any reason, you are entitled to a refund of your contributions plus interest of 2% for funds held one year or more. In accordance with federal law, 20% of the refund will be withheld for federal taxes unless you request a direct transfer to an Individual Retirement Account (IRA) or another qualified retirement plan. Any unpaid loan balance will be deducted from the refund and is subject to the 20% tax. If you have 5 years or more service credit with the City of Cincinnati Retirement System at the time you leave City service and wish to withdraw your pension contributions, you must also complete, sign, and have notarized a Retirement Benefit Waiver form waving your rights to any future benefits from the Cincinnati Retirement System
Cincinnati Retirement System Refund Form
Retirement Benefit Waiver Form
Pension Limitations
Your pension benefit is potentially limited by Section 203-33 of the Cincinnati Municipal Code, which does not allow the retirement allowance to exceed 90% of the average of the three highest years salaries for members retiring after April 1, 1993.
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Each year, you will receive a 3.0% increase in your retirement allowance. The increase becomes effective on the anniversary of your retirement date.
