Pension Calculation
Laborers’ and Retirement Board Employees’ Annuity and Benefit Fund of Chicago (LABF) offers a defined benefit plan. Your pension is calculated using a formula that includes your salary history, years of service and your age at retirement.
Employees hired for the first time on or after January 1, 2011 are second tier employees and may have different benefits.
Our statutes currently provide a retirement annuity to eligible employees based on 2.4% for each year of credited service up to 80% of final average salary (FAS). If you resign effective the last working day of January, you must be on the payroll every workable day of the month to receive 6 months of service credit in that year. If you have 1 full month of service plus service in 5 additional months in the same calendar year, you will receive a full year of service credit for that year.
Final Average Salary (FAS) is the highest average monthly salary for any four consecutive years within the last ten years of service immediately preceding the date of retirement.
Age Discount is .25% per month for every month or fraction thereof that a participant is between the age of 55 - 60 at retirement with 20 - 24 years of service. There is no reduction for age if participant is any of the following at retirement:
-
age 60 with at least 10 years of service
-
age 55 with at least 25 years of service
-
age 50 with at least 30 years of service
Reciprocal Option
You may also receive an annuity based upon combined service credit from two or more systems covered under the Retirement Systems Reciprocal Act. The Reciprocal Act assures full and continuous pension credit for all service in any of the following participating retirement systems:
-
Municipal Employees’ Annuity and Benefit Fund of Chicago
-
County Employees’ Annuity and Benefit Fund of Cook County
-
Forest Preserve District Employees’ Annuity and Benefit Fund of Cook County
-
Judges’ Retirement System of Illinois
-
Illinois Municipal Retirement Fund
-
Park Employees’ Annuity and Benefit Fund of Chicago
-
Metropolitan Water Reclamation District Retirement Fund
-
Public School Teachers’ Pension and Retirement Fund of Chicago
-
State Employees’ Retirement System of Illinois
-
Teachers’ Retirement System of Illinois
-
State Universities Retirement System
-
General Assembly Retirement System
Because reciprocal cases are complex, before you retire you should contact both LABF and any other participating retirement fund to which you may have contributed for further information. Should you need to repay a refund, please remember you have to be in service to pay for past service.
Reversionary Option
A reversionary option is also available. You may elect to reduce your monthly annuity to provide an increased annuity for your spouse or a lifetime annuity for certain family members, to begin upon your death. Several restrictions apply. For example, you must elect the reversionary option before retirement. Other rules may also apply, so please contact our office as soon as possible if you are interested in this option.
Service Payment
There are two types of service payment options: Account Receivable (A/R), and Unpaid Service (US). A/R is mandatory and accrues 3% interest until paid in full. US is optional and must be paid to the Fund while you are an active member and accrues 3% interest until paid in full.
-
Account Receivable (A/R) – Contributions for a period of time deductions were not withheld from your paycheck and not received by the Fund. These contributions are mandatory and must be paid while you are an active employee.
-
Unpaid Service (US) - If you previously received a contribution refund from the Fund, or had service where contributions were not collected, you can choose to pay all or part of this service. Service is granted in six month increments.
You may pay service payments in one lump sum, by transferring funds from a deferred compensation account, or by installments. Please contact our office before sending any funds. Our office requires specific forms to be completed and reviewed for acceptance, prior to the rollover of funds.
If you are planning to retire any time soon, we strongly recommend that you contact the Fund before retiring. A counselor will fully explain all requirements and benefits that may apply to you.
-
Please contact LABF at (312) 236-2065 for a retirement estimate.
-
You may use a generic calculator to project a retirement benefit estimate by accessing the "Member Login" in the header of this website. By registering and then logging into the “membership” portal you will be able to input service and salary to get a basic estimate. If you have not yet registered, please do so and then you will have access to the calculator.
-
If you want a more specific estimate related to your income, age and service and are planning to retire within the next year, please contact LABF to request a customized estimate.
-
When you are in the process of considering retirement, your decision will need to be based upon the estimate provided by LABF as you will not receive a “final” retirement amount until your retirement application has been approved by the Board of Trustees. At that time, you will receive an award letter that confirms the details about your retirement benefit.
Tier 1 Retirement Estimate Calculator