The MSPP will pay you a lifetime monthly pension at age 65. Your pension is calculated using the target pension formula and the total contributions made to the Plan by you and your employer. Currently, your age 65 monthly target benefit is calculated as
Total contributions received ÷ 100 X $1.55
Let’s use an example to illustrate how it works. Let’s assume your total contributions to the Plan at age 65 are 50,000 ($30,000 from your employer and $20,000 from you). Your monthly target pension would be:
$50,000 ÷ 100 = $500 X $1.55 = $775/month or $9,300/year.
How this pension will be paid to you depends on the “form” of pension payment you choose.
A “target” pension formula can be adjusted up or down based on the financial position of the Plan.