The Arkansas Public Employees Retirement System offers options for eligible active members who wish to retire early.
Early retirement can be defined as wishing to retire BEFORE either
- Reaching the age of 65 or
- Earning 28 years of actual service
Active members can retire before the age of 65 or before they have earned 28 years of actual service with a reduction in the benefit amount if they have:
- At least 5 years of service on or after July 1, 1997 or 10 years of service before July 1, 1997 and
- Attained the age of 55.*
(*Note: A person with at least 25 years of actual service may retire with reduced benefits at any age.)
The temporary benefit (an annuity that is available to non-contributory members who retire before age 62, except due to disability) is not reduced.
In the case of an early retirement, APERS determines what the monthly annuity will be and then applies the appropriate reduction to that amount. To determine the amount of reduction an active or deferred member will have, APERS looks at the amount of actual service that person has at the time of retirement. If the member has less than 25 years of actual service the reduction is 1/2 of 1% for each month before age 65.
|Less than 25 years of actual service|
|1/2 of 1% for each month before 65|
An example of a reduction with less than 25 years of actual service would be a member who retires at age 62 with 5 years of service.
At age 62 you have 36 months until age 65, and 1/2 of 1% for 36 months is 18. The reduction is 18%.
If the member has at least 25 but less than 28 years of actual service the reduction is the lesser of
- 1/2 of 1% for each month before age 65 or
- 1% for each month before 28 years of service
|25 to 28 years of actual service|
|The lesser of|
|From age 65||From 28 years of service|
|1/2 of 1% for each month before 65||1% for each month under 28 years|
Here is an example of a reduced benefit due to early retirement. An APERS member who is 60 years old with 25 years of service decides to retire. How will his benefit reduction be determined?
From Age 65 - At age 60 you have 60 months till 65, and 1/2 of 1% for 60 months is 30. The reduction based on age is 30%.
From 28 Years of Service - At 25 years of service you have 36 months until 28 years of service, and 1% for 36 months is 36. The reduction based on service would be 36%.
In the above example the reduction that would be applied to the monthly annuity would be the 30% based on age, as it is less than the 36% based on service.
(Material derived from APERS Early Retirement and Disability brochure, 2015)