Your retirement benefit is based on a formula that pays a lifetime monthly benefit. Your benefit is calculated by multiplying three factors:
- Age factor, determined by your age at retirement
- Total earned and purchased service credit
- Highest average compensation
Increasing any of these factors increases the amount of your retirement benefit. Also, note that the age factor percentages and highest average compensation parameters vary based on your tier.
Your age at retirement, measured to the completed quarter year, is converted to a factor used to calculate your retirement benefit. The factor determines what percentage of your highest average compensation we will use in the calculation. The age factor increases incrementally every quarter-year until you reach the maximum age for your tier's formula.
You earn service credit for every hour you work during your MCERA membership, including hours for which you are on paid vacation, holiday or sick leave. Service credit may also include service earned through a service purchase or converted sick leave accruals (if applicable). Retirement service credit does not include overtime hours, part time service less than 75% of full time (unless purchased), or time missed due to leave without pay.
Sick Leave Conversion at Retirement
Sick leave is the only type of leave accrual that may be counted toward service credit. Most MCERA members are eligible to increase their monthly retirement benefit with the conversion of a portion of their sick leave balance at retirement.
How does accrued sick leave convert to service credit?
To be eligible to convert your unused sick leave to service credit you must terminate active employment and begin retirement the day after your termination date. The amount of sick leave you can convert depends on your employer, and each employer has different rules.
- County of Marin and Marin Superior Court: Eligible to convert 75% of accrued sick leave.
- Novato Fire: Eligible to convert 100% of accrued sick leave.
- Southern Marin Fire: Eligible to convert 40% of accrued sick leave.
- City of San Rafael: Sick leave conversion policies vary by bargaining unit. Most San Rafael employees hired on or before June 30, 2009 are eligible to convert 100% of their sick leave to service credit. Please contact the City of San Rafael Human Resources Department for information on your bargaining unit's sick leave conversion policy.
- LAFCO, Marin City Community Services, Marin/Sonoma Mosquito and Tamalpais Community Services do not currently have sick leave conversion policies.
Sick leave does not count toward retirement or medical eligibility.
Converted sick leave service credit is added into your total service credit when your retirement benefit is calculated, but it cannot be used to meet any eligibility requirements. For example, you cannot use your accumulated sick leave hours to reach the 5-year vesting requirement. To be vested you must have actually worked and paid contributions for 5 years of service credit.
Highest Average Compensation
Your highest average compensation is computed on your highest consecutive one- or three-year period of compensation, as determined by your tier. Your highest average compensation for retirement may differ from the amount you were actually paid because certain pay types may not be included as compensation for retirement purposes.
- Classic Members - Compensation Earnable: Compensation earnable is your base pay plus other approved payable items, allowances and cash-outs such as uniform allowance or shift differential. Compensation earnable does not include pay for overtime, standby, on call, administrative response pay or cash paid in lieu of benefits (such as paid unused fringe).
- PEPRA Members - Pensionable Compensation: Pensionable compensation is your normal monthly rate of pay, or base pay, paid to similarly situated members of the same group or class of employment for services rendered on a full time basis during normal working hours. Pay items excluded from pensionable compensation are leave cash outs, standby pay, overtime, payments for services outside of normal working hours, bonuses and allowances. Other pay items not listed may also be excluded.
Below are sample service retirement calculations. You can see that as the age at retirement increases so does the age factor percentage.
County of Marin General Classic Tier 3
County of Marin General PEPRA Tier 5
Assume $50,000 is the Highest Average Compensation for this member who worked for 15 years and retires at age 50:
1.43% (age factor) × 15 (service credit) × $50,000 = $10,725 annually (or $893.75 per month)
If instead this member works for 20 years and retires at 55:
2.00% (age factor) × 20 (service credit) × $50,000 = $20,000 annually (or $1,666.67 per month)
If instead this member works for 28 years and retires at 63:
2.40% (age factor) × 28 (service credit) × $50,000 = $33,600 annually (or $2,800.00 per month)
Assume $50,000 is the Highest Average Compensation for this member who worked for 15 years and retires at age 52:
1.00% (age factor) × 15 (service credit) × $50,000 = $7,500 annually (or $625.00 per month)
If instead this member works for 25 years and retires at 62:
2.00% (age factor) × 25 (service credit) × $50,000 = $25,000 annually (or $2,083.33 per month)
If instead this member works for 30 years and retires at 67:
2.50% (age factor) × 30 (service credit) × $50,000 = $37,600 annually (or $3,125.00 per month)
Limits to Your Retirement Benefit
MCERA will pay a retirement benefit amount up to but no greater than 100% of your highest average compensation.
Internal Revenue Code Limits
Internal Revenue Code (IRC) regulations place a limit on the amount of pension benefits you can receive. Under IRC Section 415(b), you generally may not receive more than $230,000 annually (effective January 1, 2020 through December 31, 2021) and the amount is adjusted based on your retirement age. Some safety members are not impacted by the adjusted limits of IRC Section 415(b). MCERA will notify you at the time of your retirement if your benefit is affected by the IRC limit.
Classic Members: Cap on Compensation Earnable
There is a cap on the amount of compensation you receive that can be included in the calculation of your retirement benefit. As of January 1, 2020, the cap is $285,000.
PEPRA Members: Cap on Pensionable Compensation
There is a cap on the amount of compensation you receive that can be included in the calculation of your retirement benefit. As of January 1, 2020, the cap for members not covered by Social Security is $151,549 and $126,291 for members who are covered. The cap is indexed to inflation based on the CPI for All Urban Consumers and is adjusted each year on January 1.
Use MCERA's Tools to Calculate Your Benefit
Online Retirement Benefit Estimator
Use our Retirement Benefit Estimator to get an estimate of your future retirement benefit. Simply enter your employer and tier, age at retirement, projected service credit and highest average compensation, and click "Calculate." The results are instantaneous and, assuming the variables you have entered are accurate, will yield an estimate that is very close to your actual future benefit if you chose the Unmodified payment option. You can also personalize your estimate to reflect anticipated increases in compensation or additional service credit from conversion of your accrued sick leave hours.
Benefits as a Percentage of Compensation
It may be helpful to estimate your benefit as a percentage of your highest compensation. You can use the tables in the Estimate Your Benefit as a Percentage of Compensation booklet to estimate the amount of compensation you will receive if you retire at a certain age with a certain amount of service credit.