June 25, 2022

Estimating Your Defined Benefit Pension


Here’s a simple formula to figure out what your annual pension income would be if you’ve reached the “Golden 85,” minimum age 55 with 30 years of service, or age 56 with 29 years, 57 with 28 years, and so on, adding up to 85. All formulas used below can be found at page 39 of the 2019 Plan Description (linked below).

The formula is: your average base pay from your last 4 years (or 4 highest consecutive years, whichever is greater) x the number of years of service x our benefit multiplier, 2.25%.

So for someone with 30 years service who averaged $45,000, the equation would be:

$45,000 x 30 x .0225 = $30,375.

It’s safe to say that “normal retirement” is a little more than ⅔ of your highest average 4 years of base pay for the rest of your life and that of your partner, if specified.


Early retirements use an actuarial table to reduce the benefit.

To estimate an early retirement, use the “normal retirement” formula above, then match the years before normal retirement with a percentage. Multiply the normal retirement payment by the percentage to get the reduced amount.

Years Before and Percent of Normal Retirement Date Accrued Pension table:

1 89.5%
2 80.3%
3 72.1%
4 64.9%
5 58.6%
6 52.9%
7 47.9%
8 43.4%
9 39.3%
10 35.7%

So if a person with $45,000 average base pay is retiring 4 years before “normal retirement,” the equation to figure the reduction is:

$30,375 x 64.9% = $19,713.

LATE RETIREMENT: To work out the addition to pension for those who work past their “normal retirement” date, the formula is ¾ of 1% of Average Compensation x Years of Benefit Accrual Service in excess of 30 years.

So if the average 4 year base salary was $45,000, let’s say the person reached the normal retirement age at 55 with 30 years, but then worked 4 more years and retired. The equation would be: $45,000 x 4 x .0075, adding an additional $1,350 / yr, or $31,725 total.

Again, these formulas are a general guide. There are many additional factors involved to get a more precise estimate. You can get accurate numbers from C-Biz, the company the Met contracts to help employees with pension issues (linked below).

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