Retirement
Annual pension
Each year of service earns a percentage of the final average salary.
The Formula
Annual = years x accrual rate x final salary
Each year of service earns a percentage of the final average salary.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| Y | Years | years | Years of credited service. |
| a | Accrual rate | rate | Percent of salary earned per year. |
| S | Final salary | currency | Final average salary. |
What Each Symbol Means
Yyears
Years
Years of credited service.
arate
Accrual rate
Percent of salary earned per year.
Scurrency
Final salary
Final average salary.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate pension page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Pension, filed under Finance. Every number the guide produces comes from substituting into this one line.