Benefits

Supplementing Benefits

Purchasing Service Credit | Summit Savings | Social Security

Your DERP Pension Benefit is meant to provide part of your retirement income and is designed to be supplemented by Social Security benefits and other personal savings and investments. Although you cannot add extra money to your DERP Pension Benefit, you can contribute to your retirement in different ways, such as purchasing service credits and supplementing your retirement savings through the city’s Summit Savings 457b Deferred Compensation plan.

Purchasing Service Credit

Your monthly DERP Pension Benefit at retirement, in part, is based on your years and months of service credit. The longer you work and contribute, the greater your DERP Pension Benefit will be. Purchasing service credit will help enhance your DERP Pension Benefit by increasing the amount of service used in the calculation of your benefit. When you purchase service with DERP, you will increase the amount of the DERP Pension Benefit paid to you at retirement.

What you need to know when purchasing service credit…

  • Purchasing service credit will help you enhance your DERP Pension Benefit by increasing the amount of service used in the calculation of your retirement benefit. The benefit calculation is based on your membership tier and years and months of service.
    Membership Tier 1 Hired before September 1, 2004
    Benefit calculation is 2% of your average monthly salary (highest consecutive 36 months) multiplied by your years and months of service
    Membership Tier 2 Hired on or after September 1, 2004
    Benefit calculation is 1.5% of your average monthly salary (highest consecutive 36 months) multiplied by your years and months of service
    Membership Tier 3 Hired on or after July 1, 2011
    Benefit calculation is 1.5% of your average monthly salary (highest consecutive 60 months) multiplied by your years and months of service
  • Service may be purchased in periods of one or more months. The purchase may be made directly, or the member may roll over money from another qualified retirement plan. Direct payments to purchase service is an after-tax contribution. The election to purchase service is irrevocable and the money used to purchase service is non-refundable.
  • Purchased service will be used only to calculate the member’s retirement benefit and will not be used in the calculation of the Rule-of-75, Rule-of-85, or health insurance premium reduction benefit.
  • The cost to purchase service credit will be based upon the member’s age, earliest unreduced retirement age, average monthly salary (based on the highest 36 or 60 consecutive months’ salary), and other actuarial factors.

You must carefully weigh your options when considering a service credit purchase. There are situations where a purchase may be advantageous and other situations where it may be cost prohibitive, depending on your individual circumstance.

Email Help@DERP.org to request an official calculation using your current data.

For more information visit DERP’s Publications page and click on the Your Guide to Service Credit Purchase.

Summit Savings

Summit Savings logoSummit Savings is a separate, personal retirement savings (457b) program offered by the City and County of Denver. The plan is designed to supplement DERP and Social Security, providing additional financial and retirement planning options. Summit Savings is a public sector equivalent to the private sector’s 401k plans. Your Summit Savings investments can be customized as your needs require, and you can work with an investment advisor to tailor your investment options. The city does not match deferred compensation contributions.

Visit the city’s Summit Savings site to learn more

Social Security

DERP does not have detailed information regarding benefits through Social Security. As you plan for retirement, the following links can be used a resource.

  • Social Security Benefits Estimator
    The Social Security Benefits Estimator helps you to better understand your Social Security protection as you plan for your financial future. The benefit calculator can answer all your questions about payments and options.
  • Social Security Statement
    If you have questions about your Social Security Statement, this site has frequently asked questions that can guide you in the right direction for an answer.
  • Apply for Social Security Online
    The Social Security Administration has a wealth of information for current employees and retirees alike, including retirement planning calculators, Medicare information, and how to apply for benefits.
  • Social Security Publications
    The Social Security Administration produces a number of up-to-date, online publications that include information about retirement benefits, disability benefits, survivor’s benefits, and more.

When applying for benefits, Social Security recommends you apply four months before you want to receive your first payment. If you would like to meet with a Social Security representative, you should plan to schedule the meeting several months in advance.

There are three options available to apply:

  1. Online at ssa.gov
  2. By phone at 1-800-772-1213
  3. At a Social Security office