Updated October 7, 2026. Quick answer: A member of the Employees Retirement System of the City of St. Louis who retires elects life only, joint and survivor, or ten year certain and life, and the system says the election is irrevocable after retirement. The pension is 1.30% of final average compensation up to the benefit compensation base plus 2.05% above it, times years of service, divided by 12. The plan is non-contributory since 1977, so there are no member contributions to refund. A member with 5 years of service who leaves has a vested benefit, and the DROP lasts at most five years.
What this page covers and what it does not
This page works from the Employees Retirement System Handbook (printed as Rev. 04/22), the Deferred Retirement Option Plan (DROP) Policy and Procedure (approved February 23, 2026), and several pages of the system’s website, all read on October 7, 2026. Any figure here is the system’s, or is labeled as a computed example from assumed inputs.
The system’s eligibility page says “All regular City of St. Louis employees EXCEPT uniformed Police personnel and firefighters are members of the Employees Retirement System (ERS)”. The page therefore covers general City employees in the Employees Retirement System (ERS). Police officers and firefighters are in separate systems, and the Public School Retirement System is another; none is covered here. The documents read describe no tiers or classes within the ERS, apart from a sick leave rule tied to the date of joining. State tax questions are on Missouri retirement taxes and does Missouri tax pensions.
The handbook cautions: “This handbook is only a general description of the ordinances and laws establishing the Employees Retirement System.”
How the monthly pension is built
The handbook gives two rates: “1.30% of the FAC up to the BCB” and “2.05% of any FAC in excess of the BCB”. It adds: “The sum of (a) and (b) is multiplied by the years of Creditable Service, and divided by 12 to determine the monthly pension payable during your lifetime.”
The benefit compensation base is a Social Security coordination figure: “The amount of your BCB depends upon your year of birth and the year in which you retire or terminate employment.” Two documents give different example bases. The handbook example uses “$41,712 as a BCB” for 2004, and the website examples “use a BCB of $43,992”, which is “the value in effect for members reaching normal retirement age in 2005”. Neither is current, and the website says: “Use the pension calculator for current BCB values.”
Sick leave has a cutoff. The creditable service page says that “Sick leave balances for pension calculation purposes may not exceed a Member’s sick leave balance as of the pay period ending July 17, 2010”, and the formula page says: “Members who joined after July 17, 2010 may not include sick leave in their pension calculation.” A member’s date of joining therefore changes the calculation.
When a pension can start
| Type | What the system says |
|---|---|
| Normal service retirement | The first day of any month following the 65th birthday |
| Early service retirement | Age 60 with at least 5 years of creditable service, age 55 with at least 20 years, or any age with at least 30 years |
| Early start reduction | 4% for each year before the normal service retirement date |
| Rule of 85 | Age plus creditable service of 85 or more, without the usual reduction |
| Vested accrued benefit | At least 5 years of creditable service at leaving, paid under early retirement provisions |
The pages read do not say whether a partial year of early start is prorated.
The election: three options and one permanent choice
“At time of retirement, you may elect one of the following three options. Your election is irrevocable after retirement.” The retiree FAQ, asked whether the option can be changed, answers: “No, the selection you made at time of retirement, whether life only, 10-year certain or joint annuity, is irrevocable.”
| Option | What the member receives | What a survivor receives |
|---|---|---|
| Life only | The regular pension, paid for the member’s lifetime only | Nothing continues after the member’s death |
| Joint and survivor | A reduced pension for the member’s lifetime | Continues to the spouse for life; if the spouse dies first, the reduced pension stays for the member’s life |
| Ten year certain and life | A reduced pension for the member’s lifetime, never fewer than 120 monthly payments | If the member dies early, the remaining payments go to the designated beneficiary until 120 have been paid |
The documents read do not state the size of either reduction. The handbook lists the facts used in computing a pension: “Your age, Creditable Service, Final Average Compensation, Benefit Compensation Base, and for Joint Survivor benefits, the age of your spouse”, so the spouse’s age is one input to the joint and survivor figure. Ask the system for a written quote for each option. The general trade-off is on single-life versus joint-and-survivor pension.
After you retire: spouse, remarriage and the ten year guarantee
The retiree FAQ answers several what-if questions. If the spouse dies first, it says “No, you will continue to receive the reduced pension”. On a later remarriage by the retiree, it says “No, survivor benefits are payable only to the spouse you were legally married to at time of your retirement”. Asked whether the ten year certain pension is adjusted after 120 payments, it says “No, you will continue to receive the reduced pension”, so the reduced amount continues for life.
A computed example from assumed figures, not a St. Louis ERS figure: if the reduced ten year certain benefit were an assumed $1,500 a month, 120 guaranteed payments would total a computed $180,000. If the member died after an assumed 48 payments, 72 would remain, a computed $108,000 payable to the designated beneficiary. The reduction itself is not published in the documents read.
Applications are timed: “Your application for retirement must be made not less than 30 days and not more than 90 days in advance of the month you wish your retirement to become effective. Retirements are always effective the first day of the month.”
A worked formula example
A computed example from assumed figures, not a St. Louis ERS figure: take an assumed final average compensation of $36,000 below the benefit compensation base, so only the 1.30% rate applies. With an assumed 25 years of creditable service, the annual pension is 1.30% of $36,000 times 25, a computed $11,700.00, or a computed $975.00 a month after dividing by 12.
If the same member started an assumed 3 years before age 65, the 4% a year reduction is a computed 12% in total, leaving 88% of $975.00, or a computed $858.00 a month. This reads the 4% as a straight percentage per year; the pages read do not say whether it compounds, so a real figure must come from the system.
The Deferred Retirement Option Plan (DROP)
The DROP lets a retirement-eligible member keep working while a pension accumulates in a separate account. “In order to be eligible to participate in DROP, a Member must be eligible for early retirement, normal retirement or Rule of 85 retirement.” “Members may participate in the DROP for a maximum of five (5) years (60 monthly payments).”
The cost is service credit. The policy says the member “shall continue in active employment and shall not receive any direct retirement allowance payments during the time of participation”, and that “Service earned during the period of participation in the DROP shall not be creditable service and shall not be counted in determination of any retirement allowance”. “A Member’s DROP account shall not be adjusted for any cost of living increases during the Member’s participation in the DROP program.”
Entry is permanent, but leaving is allowed. The policy says: “A Member’s election to participate in the DROP is irrevocable once approved by the Board of Trustees.” A member “may stop his/her participation in the DROP by notifying the Board of Trustees in writing at least thirty (30) days in advance of the month he/she wishes to terminate participation”.
Interest: “DROP accounts established on or after February 1, 2003 shall earn interest at a rate equal to the yield on the ten-year Treasury Bond as of the date of the Retirement System’s most recent plan year end.” The pages read do not state the current rate.
Taking the DROP balance: lump sum, rollover or ten years of installments
The policy lists the payout forms, to the extent federal tax law allows. The first is “A lump sum distribution of the balance of the DROP account”. The second is “A lump sum distribution of the balance of the DROP account with all or part of the lump sum distribution directly rolled over to an Individual Retirement Account (IRA), Roth IRA, or to another employer’s tax-qualified retirement plan that accepts rollovers, subject to Internal Revenue Code requirements”. The third is “Substantially equal monthly installments for ten (10) years”, where “The member will receive 120 monthly installments with interest accrued during the disbursement period”.
Installments have a rollover cost. For members retiring or separating on or after October 1, 2008 the policy says the member “shall receive the interest accrued during each plan year of the disbursement period as a separate check to be issued promptly following the end of that plan year”. “These yearly interest payments are not eligible for a rollover distribution.” A small account is treated differently: “In the event a member’s DROP account is less than $7,000 at the time it is first payable, the DROP account shall be paid in a single lump sum.”
For an eligible rollover distribution of $1,000 or more, the policy says that when a member or beneficiary “fails to make an election within 90 days following receipt of the Special Tax Notice”, “the System shall automatically rollover the eligible distribution to its Mandatory Default IRA Provider”. See 20% withholding on a pension lump sum for withholding on a lump sum paid to the member.
On death, the retiree FAQ says: “Your DROP funds are payable to your designated beneficiary or to your estate if there is no surviving beneficiary.”
Leaving before retirement: no contributions to refund
Most pension systems offer a member refund. This one is built differently. The handbook says “since 1977 the System is non-contributory. You do not contribute to the System”. Asked about salary deductions, the FAQ answers: “None. The Retirement System has been non-contributory since 1977.” The documents read describe no withdrawal of member contributions for current employees. An older group is noted: the handbook’s question on accumulated contributions at retirement is “Applicable only to members contributing in 1977”, and those members may “elect a refund” or “elect to use this sum to purchase a supplemental benefit”.
What leaving does depend on is service. The handbook says: “If you have at least 5 years of Creditable Service at time of termination of employment and not eligible for retirement, you will have a Vested Accrued Benefit determined and payable under the provisions of early retirement.” The documents read do not say what happens to a member who leaves with fewer than 5 years. The general question is on pension refund versus leaving it, though here the choice is a vested benefit or nothing from this system.
Survivor coverage when you leave vested, or die while working
A vested member who leaves and cannot yet retire has a six-month decision. The survivor page says “Within six months following a member’s date of termination, the member may elect pre-retirement death benefit coverage”. The condition: “if he/she has at least five years of Creditable Service at time of termination”. The two forms are surviving spouse coverage or ten year certain coverage, described as “A reduced pension payable to the terminated member’s designated beneficiary for 120 months”.
The cost comes out of the pension. “The pension is reduced by 0.25% for each year that the coverage is in effect for ages prior to 55 plus 0.50% for each year the coverage is in effect for ages after 55.” A computed example from assumed years, not a St. Louis ERS figure: 10 years of coverage before 55 at 0.25% plus 3 years after 55 at 0.50% reduces the pension by a computed 4.00%. Declining has a stated result: “If the member declines to elect pre-retirement death benefit coverage and dies before retirement, there are no pension benefits payable.”
For active members, “If a member is eligible to retire at the time of his/her death, a monthly pension is payable to the member’s spouse, calculated as if the member had retired on the day of his/her death and elected the Joint and Survivor Annuity”. Compare other employers on survivor benefit with a government pension.
Buying service credit and cost of living adjustments
The handbook says “If you are vested in the City Retirement System, you may acquire service credit for prior, nonfederal, public sector employment in the state of Missouri by purchasing that service”, and the creditable service page adds that the purchase may be made “using the member’s own money and/or using the value of the member’s retirement benefit in the prior retirement plan, if that plan has an agreement with the City”. The handbook adds: “Upon receipt of a non-binding request to purchase service credit for prior public employment, the System’s actuary will determine the cost”. The documents read give no price table. For judging a purchase, use the pension buyback calculator.
On cost of living, the handbook says: “Increases are limited to 5% each year, with total increases limited to 25%.”
Figures at a glance
| Item | Figure |
|---|---|
| Benefit rate at or below the BCB | 1.30% of final average compensation |
| Benefit rate above the BCB | 2.05% of final average compensation |
| Vesting | 5 years of creditable service |
| Early reduction | 4% for each year before normal retirement |
| Ten year certain guarantee | 120 monthly payments |
| Pre-retirement death coverage cost | 0.25% a year before age 55, 0.50% a year after |
| Annual COLA cap | 5% a year, 25% in total |
| DROP maximum | Five years, 60 monthly payments |
| DROP accounts paid as one sum | Less than $7,000 |
What the IRS adds on tax
A refund or lump sum from a public pension is a distribution, so the IRS rules apply on top of the St. Louis Employees Retirement System’s own. On withholding, the IRS says that a taxable eligible rollover distribution paid to you “is subject to mandatory income tax withholding (generally at a rate of 20%), even if you intend to roll it over later”, and that if you roll it over yourself “you’ll have to add funds from other sources equal to the amount withheld”. The DROP policy itself notes that distributions are taxable income for the year received and that certain ones made before age 59 and a half may carry an early distribution tax; it also describes the Special Tax Notice sent before payout. The rollover clock, if the money is paid to you: “you have 60 days from the date you receive it to roll it over to another eligible retirement plan”.
On early distributions the IRS says “the law imposes a 10% additional tax on certain early distributions from certain retirement plans”. Its list of exceptions includes “Distributions made to you after you separated from service with your employer after attainment of age 55” and “Distributions made to a qualified public safety employee from a governmental plan”. Whether an exception fits a particular refund depends on your own plan and facts, so confirm it with a tax preparer before you take one.
What this page could not settle
- The documents read do not state how much the joint and survivor or ten year certain option reduces the monthly pension.
- The pages read do not state a current benefit compensation base; the examples use older figures and the system points to its pension calculator.
- The pages read do not say whether the 4% early reduction compounds or prorates a partial year.
- The pages read do not say what happens to a member who leaves with fewer than 5 years of creditable service.
- The pages read do not state the current DROP interest rate, a partial lump sum option, or a spousal consent rule for the option election.
- The pages read give no price table for service credit purchases, and the City Revised Code chapter and disability retirement rules were not read; the handbook is printed Rev. 04/22 with 2004 examples.
Common mistakes
- Treating the retirement option as changeable later; the system says the selection, whether life only, ten year certain or joint annuity, is irrevocable.
- Choosing the joint and survivor option and assuming a later spouse is covered; survivor benefits go only to the spouse legally married at the time of retirement.
- Entering the DROP expecting it to add service credit; the policy says service during participation is not creditable service.
- Waiting for the system’s default IRA rule to decide a rollover; an unanswered election after the Special Tax Notice can trigger an automatic rollover to the default provider.
- Leaving employment as a vested member and missing the six-month window to elect pre-retirement death coverage; declining coverage means no pension benefits are payable if the member dies before retirement.
- Assuming a member refund exists; the system has been non-contributory since 1977, so there are no member contributions to withdraw for current employees.
Related on this site: Missouri retirement taxes, does Missouri tax pensions, Missouri LAGERS retirement decisions, pension refund versus leaving it, single-life versus joint-and-survivor pension, pension buyback calculator, 20% withholding on a pension lump sum, survivor benefit with a government pension and public pension retirement decisions by system.
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Answer againSources
- City of St. Louis Employees Retirement System, Employees Retirement System Handbook (Rev. 04/22): https://www.stlouis-mo.gov/government/departments/employee-retirement/documents/upload/Handbook-5-6-2026.pdf
- City of St. Louis Employees Retirement System, Deferred Retirement Option Plan Policy and Procedure (approved February 23, 2026): https://www.stlouis-mo.gov/government/departments/employee-retirement/documents/upload/Drop-Policy-Further-Revised-3-9-2026.pdf
- Employees Retirement System, Pension (Retirement) Formula (web page, read October 7, 2026): https://www.stlouis-mo.gov/government/departments/employee-retirement/Retirement-Formula.cfm
- Employees Retirement System, Survivor Benefits (web page, read October 7, 2026): https://www.stlouis-mo.gov/government/departments/employee-retirement/Death.cfm
- Employees Retirement System, Retirement Frequently Asked Questions for Retirees (web page, read October 7, 2026): https://www.stlouis-mo.gov/government/departments/employee-retirement/RetireeFAQ.cfm
- Employees Retirement System, Retirement Eligibility (web page, read October 7, 2026): https://www.stlouis-mo.gov/government/departments/employee-retirement/Retirement-Eligibility.cfm
- Employees Retirement System, Creditable Service (web page, read October 7, 2026): https://www.stlouis-mo.gov/government/departments/employee-retirement/Creditable.cfm
- Employees Retirement System of the City of St. Louis, Eligibility (web page, read October 7, 2026): https://www.stlouis-mo.gov/government/departments/employee-retirement/eligibility.cfm
- IRS, Topic no. 413, Rollovers from retirement plans (irs.gov): https://www.irs.gov/taxtopics/tc413
- IRS, Topic no. 558, Additional tax on early distributions from retirement plans other than IRAs (irs.gov): https://www.irs.gov/taxtopics/tc558
Sources: the primary documents linked above, read on October 7, 2026. General information from each system’s own published materials, not legal, tax or financial advice. Your own member statement and the system’s current rules decide your benefit, and a pension counsellor at the system or a fee-only adviser is the right place to confirm anything consequential.