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Page 2 <br /> Q How were the estimates of my pension under the early retirement incentive calculated? <br /> A When you retire, your pension is computed by awarding a specified percentage of your <br /> high -five average salary for each year of service credit you have. (Your high -five average <br /> salary is the average of your highest five successive years of salary on which you have paid <br /> pension contributions.) For the purposes of estimating your pension, PERA has had to make <br /> some assumptions about your salary and years of service. For example, PERA has used the <br /> 12 months of your earnings reported to PERA from July 1, 1991 through June 30, 1992 as an <br /> estimate of your high -five average salary. (If your total actual earnings reported to PERA from <br /> July 1, 1992 to the present were higher than your earnings from July 1991 to June 1992, we <br /> used the 1992 1993 earnings instead.) <br /> The estimates assume that you remain employed up to the retirement dates listed (June 30, <br /> 1993 and January 30, 1994 are two listed. There may be another date if you qualify for Rule <br /> of 90. An estimate of your pension under the Rule of 90 is only shown if you are currently <br /> eligible for it or you will be within one year of January 1994.) <br /> One quarter of one percent (.25 has been added to the benefit formula multiplier normally <br /> used to compute your pension to arrive at the additional amount you would receive under the <br /> improved pension formula option. This larger multiplier has been applied only to the first 30 <br /> years of your service. <br /> Because your pension is reduced for early retirement for each year before the normal <br /> retirement age of 65 (unless you qualify for the Rule of 90), your pension estimate has been <br /> reduced for early retirement if your age on the retirement dates listed call for such a reduction. <br /> Under the Rule of 90 there is no penalty for early retirement. <br /> Q What do the estimates of the joint and survivor and normal annuity options in my letter <br /> mean? <br /> A When you retire you may name an individual to receive a proportion (25, 50, 75 or 100 of <br /> your pension upon your death. This individual is referred to as your joint annuitant. After you <br /> retire, your joint annuitant collects a pension for his or her lifetime after your death. Many <br /> married PERA members name their spouse as joint annuitant so that the spouse will have an <br /> income after the member's death. If you select a "normal" pension option, no pension is <br /> payable to anyone after your death. Estimates of a joint and survivor option appear in your <br /> letter if you have provided PERA the name and birth date of the individual you will likely <br /> name as your joint annuitant. <br /> If you select a joint and survivor annuity option, PERA must be prepared to pay a pension over <br /> two lifetimes, yours and that of your joint annuitant. As a result, your pension is slightly lower <br /> if you select a joint and survivor option. If joint and survivor estimates appear in your letter, <br />