Almost every state and local pension in the United States runs on the same short formula. Your yearly pension equals a multiplier, times your years of service, times your final average salary. Divide by twelve and you have the monthly check. Everything else in a plan handbook, from tiers to age factors, exists to set one of those three numbers or to trim the result if you leave early.
The three numbers
The multiplier, sometimes called the benefit factor, percentage value or age factor, is the share of your salary you earn for each year you work. Teacher plans that do not pay into Social Security tend to sit between 2.2% and 2.5%, because the pension has to do the job of both. Plans whose members also earn Social Security are usually lower, around 1.6% to 2%.
Years of service are the years your plan credits you with. A full school year normally counts as one year even though you are off in summer. Part-time work earns part of a year, and many plans let you buy extra years for military service, leave or work in another state.
Final average salary is the average of your best few years of pay. Depending on the plan it covers three, four, five or eight years, and some plans cap which pay counts. Our final average salary guide covers those rules.
| Plan | Multiplier | Salary average |
|---|---|---|
| Texas TRS | 2.3% | Highest 5 years |
| STRS Ohio | 2.2% | Highest 5 years |
| Illinois TRS | 2.2%, capped at 75% | Highest 4 of last 10 (Tier 1) |
| CalSTRS | 2% at 60 or 62, up to 2.4% | Highest 36 months |
| CalPERS PEPRA | 1% at 52 to 2.5% at 67 | Highest 36 months |
| Florida FRS Regular | 1.60% to 1.68% | Highest 5 or 8 years |
A worked example
Take a Texas teacher with 30 years of service and a five-year average salary of $65,000. The multiplier is 2.3%, so 30 years earn 69% of salary. Sixty-nine percent of $65,000 is $44,850 a year, or about $3,738 a month before tax.
Move the same career to Florida’s Regular Class at 1.6% and the result is 48% of salary, about $2,600 a month. That gap is not as unfair as it looks. Florida teachers pay into Social Security and will usually collect it on top, while most Texas teachers do not.
Age factors and early retirement
Plans also control when you can collect the full amount. Some use a minimum age, some a point system such as the Rule of 80, and some a sliding age factor where the multiplier itself grows the longer you wait. CalSTRS is the clearest example. A member under the 2% at 62 formula earns 2% per year at 62 and 2.4% at 65, so three more years of waiting raise every year already worked by a fifth.
If you retire before the plan’s normal age, the benefit is reduced for life. Typical cuts are 5% to 6% for each year you are short, though some plans use their own tables. Retiring three years early at 6% a year turns a $3,000 pension into $2,460. Because the cut is permanent, the age you pick can matter as much as a raise late in your career.
What changes the check after you retire
The formula sets your starting pension. Two more choices decide what you actually receive. First, the payout option. A single-life pension pays the most, while survivor options cost you some of the monthly amount in exchange for continuing payments to a spouse. Our payout options guide shows typical trade-offs. Second, cost-of-living adjustments. Some plans add a fixed raise every year, others add one only when the legislature votes it. Over a 25-year retirement that difference is large, and the COLA guide compares plans.
Running your own numbers
Your annual statement lists your service credit and recent salary. Put those into the pension estimate with your plan selected and try two or three retirement ages. Then check the result against your plan’s own estimate in its member portal, which uses your exact records.