I'm assuming you were government or Schools. Did your employer offer you an opportunity to buy years of service? If so any idea how they come up with that figure?
I am also curious about how other Defined Benefit Plan/457 types "planned" those last years to get the most bang for the buck.
I was a public sector employee (county gov't) in California. Although we have the 'Ventura Decision' which would count overtime in figuring the last year's income, mgmt doesn't get overtime. We could, however, sell 1/3 of that last year's vacation accrual and they would honor a years worth on the books. So I sold 53 hrs in Oct, sold another 53 in Jan, and retired with over 53 left on the books in Feb. All counted in my FAS. (Pension is based on 'yrs of service' X 'age factor' X 'highest 12 mos salary.' So if you can increase your FAS (final average salary or highest 12 mos salary) then you can increase your pension.)
I was Tier 2 retirement for years, which meant that my age factor used to be a set .009% -- an employee working 20 yrs with an monthly average salary of 5000 would get .009 x 20 x 5000 = 900 per month.
2 contracts ago, we were offered an 'enhancement' that changed Tier 2 to mirror the older Tier 1 age factors which increased with age. I entered a pre-tax contract to pay the difference between what my 'bank' had accumulated and what would have been accumulated if I was Tier 1 all along. So I signed a contract to pay 1291 per month for 5 yrs IN ADDITION TO MY REGULAR CONTRIBUTIONS to cover the 62k difference in order to convert 15 yrs. As I had paid off my house, I just took that money and gave it to the pension board -- pre-tax.
On the last contract, they came up with the proposal that they would grant us 1 yr for every 2 that we converted, max 3 yrs. And the sliding scale changed to a cap at 3% at age 50 for safety employees (police / fire / correction officers) and 2.4% at 62 for non-safety. We had to have a new law written so this could be done and Sacramento had to agree ... even though it was restricted to just Contra Costa County employees -- and only to those groups who agreed to only an 11% raise over 4 yrs and who would have their pension contributions drastically increase (my sister, a safety employee, pays 13% of her salary towards her pension).
Unfortunately, they hit me with a penalty for breaking my contract so I had to ante up another 22k (they somehow only had to come up with 11k), but it was worth it. As I was non safety, this meant that my pension went from an anticipated 810 at 55 to 2092 at 52. And I got out. OMIG>D -- it just hit me! They did not credit me any previous pymts, they only credited me the amt that I wrote on the final check
They were supposed to credit me for the amts that I had been paying all along. But I guess it is too late to do anything now.
Anyway, I had worked assuming that my pension would only cover 1/3, so I squirreled away funds in my 457 to cover another 1/3 and prayed that SSA would be there for the last 1/3. I did draw some out to cover that 22k bill and my cruise thru the canal. But I don't anticipate taking any more out until 2006.
I hear that the school district is offering to add 2 yrs to anyone's age if they retire out now. Too bad I did not work for the schools. Counties just lay off ....