Understanding the Difference Between Group 1 and Group 2

Whether you are in Group 1 or 2, everything is the same until you reach age 50. Starting at age 50, your retirement is a formula based on:

1.0% x years of service at 50
1.1% x years of service at 51
1.2% x years of service at 52
1.3% x years of service at 53
1.4% x years of service at 54

Until you reach age 55.

At that point the formula becomes 1.5% x years of service for Group 1 but leaps to 2.0% x years of service for Group 2. This is the equivalent of adding 5 years to your age, enabling a person in Group 2 to retire roughly 3 years sooner than a person in Group 1.

The maximum retirement formula for Group 1 or 2 is 2.5% x your years of service and can be no more then 80% of your 3 last 3 (highest) years of salary.

To see how big a difference this is, consider the following example:
Two people have worked for 30 years in state government. Both are 54. The retirement formula is 1.4% x 30 for both people, or 42%.

One year later, however, the Group 1 person's formula becomes 1.5% x 31 = 46.5%, but the Group 2 person's formula becomes 2.0% x 31 = 62%. After that, it keeps going up .1% per year for each group, as follows:

Group 1 Age 56 1.6% x 32 = 51.2 % Age 57 1.7% x 33 = 56.1% Age 58 1.8% x 34 = 61.2% Age 59 1.9% x 35 = 66.5% Age 60 2.0% x 36 = 72% Age 61 2.1% x 37 = 77.7% Age 62 2.2% x 38 = 83.6%

Group 2 Age 56 2.1% x 32 = 67% Age 57 2.2% x 33 = 72.6% Age 58 2.3% x 34 = 78.2% Age 59 2.4% x 35 = 84%

To reach the 80% maximum, the Group 1 person would have to work till they were 61 ½; the Group 2 person would only have to work until they were 58 ½.