When the stock market is in flux like it has been recently, having a defined benefit that grows as you continue to work regardless of market performance can be very reassuring. Additionally, many of our retirees during this time have expressed their monthly check has been a stabilizing force for their financial security. So, rest assured your LAGERS defined benefit provides you with financial security both today and when you retire.
As you may know, LAGERS is a defined benefit plan. Defined benefit plans are designed to grow larger the longer you work within the plan. So, as you continue to work for your LAGERS employer, your benefit will increase, regardless of how the markets are performing.
Specifically, your benefit is calculated by multiplying together your employer’s benefit multiplier by your final average salary, by your service credit. On the other hand, defined contribution plans (401k, 457b, etc.) are driven by the amount contributed and the investment markets. As a LAGERS member, you have a blanket of security knowing your benefit is secure and will continue to grow as you continue to work for your LAGERS employer.
Your LAGERS system continues to stand on secure financial footing. Among other reasons, consistent contributions from LAGERS’ political subdivisions, a long-term investment philosophy and a modest benefit structure are why LAGERS is able to sustain appropriate funding. This strong funding allows your retirement system to continue providing financial stability to nearly 65,000 active and former public servants. Read more about the stability of your LAGERS benefit.