OPERS applies a contribution-based benefit cap when calculating retirement benefits for members with a retirement effective date on or after Feb. 1, 2013. This is an anti-spiking provision which considers the member’s career contributions and is designed to limit the amount of monthly benefit payments for those members whose benefits are out of proportion with their contributions.
The benefit cap is not intended to impact members who have had normal raises and promotions throughout their careers. It will, however, eliminate subsidization of benefits by those who spike their salary during their career. The cap applies to all retirement groups.
The following formula is applied to each member’s career contributions to determine if the member’s retirement benefit should be capped:
Accumulated Contributions x Annuity Factor x CBBC factor = Monthly Benefit
For members in Group A, any reduction caused by the cap may not exceed 5 percent of the retirement benefit the member would have otherwise received. This 5 percent limit does not apply if the member’s earnable salary was less than $1,000 for any full month of service after Jan. 1, 1987.
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