Your membership classification and tier determine when you will be eligible to retire.

Your SDCERA retirement benefit is calculated using three factors: Age Factor x Service Credit x Final Average Compensation

1. 
   Your age at retirement is represented by an age factor—a percentage—that varies with age. Your age factor is based on the age you are on the first day you are retired (to the nearest completed quarter year). The maximum age factor depends on your membership classification and tier.
    

Membership Classification	Tier	Maximum Age Factor
General	A I and B	3% at age 60 2.6% at age 62
Safety	A B	3% at age 50 3% at age 55



2. 
   Service credit measures the time earned as a member of SDCERA while in paid status—in short, how long you have worked at your job following your entry into SDCERA membership. One year of service credit is earned for each year of full-time employment. Working on a part-time basis results in a proportionate amount of service credit. For example, a member working 20 hours per week for one year will receive a half year of service credit.
   
   You may be eligible to purchase service credit, but the purchase must be completed prior to retirement (for more information, click the Service Credit fact sheet).
    
3. 
   When you retire, SDCERA uses your highest final average compensation (FAC) to calculate your retirement benefit. The number of years used to calculate the average varies based on your tier.
   
   

   Tier	Years used to calculate FAC
   A and I	One year (26 consecutive pay periods)
   B	Three years (78 consecutive pay periods)

   
   For most members, final average compensation is represented by their last year/years of service because most members earn their highest rate at the end of their career. However, this is not always the case. SDCERA will always use a member’s highest final average monthly compensation (up to the limit allowed by the Internal Revenue Code), whenever that may have occurred. For more information about IRC limits, click on Tax information under the Retired members tab.

In addition to base pay, many pay categories count toward a member’s final compensation. Click Earnings Categories for a complete list.