A Money Purchase Annuity is calculated by taking the sum of your accumulated pension contributions (7% out of your pensionable salary) plus 10% of the city’s contribution toward your pension for each year or partial year of service beyond 10 years. The sum of the contributions is divided by a factor at your date of retirement (or age 50 if you terminated prior to that time) and are then converted into an annuity. A money purchase annuity only applies to Tier 1 members.