Does APERS allow for early retirement?
The Arkansas Public Employees Retirement System does have options available for active members who wish to retire early.
Are there any requirements for retiring early?
An active member 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.
Can I take early retirement before the age of 55?
A person with at least 25 years of actual service may retire with reduced benefits at any age. NOTE: The temporary benefit (an annuity that is available to non-contributory members who retire before age 62, except due to disability) is not reduced.
NOTE: The temporary benefit (an annuity that is available to non-contributory members who retire before age 62, except due to disability) is not reduced.
How does APERS figure the reduction for early retirement?
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.
How important is the amount of actual service in determining my reduction?
The amount of actual service is very important! If the member has less than 25 years of actual service the reduction is 1/2 of 1% for each month before 65. That can be a substantial reduction.
An example of a reduction with less than 25 years of actual service would be if a member retires at age 62 with 5 years of service. At age 62 you have 36 months until age 65. 1/2 of 1% for 36 months is 18. The reduction is 18%. At age 60 you have 60 months until 65. ½ of 1% for 60 months is 30. The reduction is 30%!
What is the reduction if I have 25 or more years of service?
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 65 or 1% for each month before 28 years of service.
For an example of a reduced benefit due to early retirement, suppose you have decided to retire at 60 years old with 25 years of service. Your benedit could be calculated as follows:
- From Age 65 - At age 60 you have 60 months till reacing age 65 years. one-half of 1% for 60 months is 30. Therefore, the reduction based on age is 30%.
- From 28 Years of Service - At 25 years of service you have 36 months until reaching 28 years of service. One percent 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.