|
|
|
|
||
|
||
|
|
|
|
|
|
Publication #9752
Revised 4/2007
Click here for a printable PDF version of the Active Member Handbook. (12MB)
Dear PSERS Members:
On behalf of the Board of Trustees and staff, I am pleased to greet you from the Public School Employees' Retirement System (PSERS).
You are a member of one of the oldest and largest public pension funds in the nation. PSERS was established in 1917 and today has over 500,000 active and retired members.
Your membership in PSERS is an investment in your future. This
handbook provides valuable information about your PSERS' benefits
and services and will help you make informed decisions about your
future retirement. It is very important that you understand
the material in this handbook. I encourage you to read this
handbook and keep it with your important papers.
If you have questions about your benefits or any material in the handbook, please contact PSERS' Member Services Center at 1-888-773-7748 . PSERS also provides additional information on our website at www.psers.state.pa.us.
I wish you much success throughout your public school career.
Jeffrey B. Clay
PSERS' Executive Director
PSERS is a governmental, cost-sharing, multiple-employer, defined benefit pension plan to which the school employers, Commonwealth, and employees (members) contribute. A defined benefit plan guarantees you a monthly lifetime benefit which is based on your age, final average salary, and years of credited service. PSERS is managed and controlled within applicable state and federal laws by a Board of Trustees. The board members are:
The Secretary of Education
The State Treasurer
The Executive Director of Pennsylvania School Boards Association
Two members appointed by the Governor
Three representatives elected from the active certified members
One representative elected from the active non-certified members
One representative elected from the retired members
One representative elected from the members of Pennsylvania School Boards
Two State Representatives
Two State Senators
All board meetings are open to the public. You can find a meeting schedule published annually in the PSERS Update publication and on the PSERS website at www.psers.state.pa.us.
Public school employers must report all of their employees
to PSERS no matter how you are employed. Whether you are a full-time or
part-time employee, a record (account) is created for you at PSERS.
However, not everyone with an account will qualify for membership.
If you are hired as a full-time employee, membership with
PSERS is mandatory. Members who work full-time contribute a percentage of
their salary towards a retirement benefit from the first day of employment.
Part-time employees must meet certain qualifications to
become a member of PSERS. Membership qualification depends on how you were
hired by your employer. If you were hired as:
Part-Time Salaried, you are eligible for membership from your first day of
employment.
Part-Time Hourly, you must work at least 500 hours to become eligible for
membership.
Part-Time Per Diem, you must work at least 80 days to become eligible for
membership.
Your employer can either deduct your contributions from
your first day of employment; or they can begin deductions after you qualify for
membership. If at the end of each school year you do not work the 500
hours or 80 days needed to reach membership eligibility, PSERS will
automatically refund all the contributions reported by your employer to you.
Once you qualify for membership, deductions become mandatory.
Part-time salaried, part-time hourly, or part-time per diem
employees may waive membership in PSERS. You must notify your employer
within 30 days of your first day of employment if you want to exercise this
option. You must have an Individual Retirement Account (IRA) or other
eligible retirement plan.
Charter schools are considered public school entities
although not all participate in the Public School Employees’ Retirement
System. Some opt for other types of retirement systems. If you are a
member of PSERS and decide to begin employment with a charter school, you should
first contact the charter school and ask if they participate with PSERS.
Employees working for a community college, Penn State
University, or other state-owned University, may generally select a retirement
plan from among PSERS, SERS (State Employees’ Retirement System), TIAA-CREF,
or other approved retirement plans. If you work full-time for a local
school district and part-time for a community college, Penn State and/or other
state-owned university, retirement contributions may be made to PSERS from both
employers; or you may contribute to another approved retirement plan for the
college employment provided you qualify to do so. The combined salaries
are used to calculate a benefit at the time of retirement.
PSERS has two membership classes. Class T-C
(effective with Act 1967-34) and Class T-D (effective with Act 2001-9).
These two classes determine your contribution rate. The table below shows
the various rates at which members contribute to PSERS. Your membership
class is listed on your Statement of Account (see page 10).
Member Contribution
Rates
|
||
|
Membership Class |
Continuous Employment
Since |
Contribution Rate |
|
T-C |
Prior to July 22, 1983 |
5.25% |
|
T-C |
On or after July 22, 1983 |
6.25% |
|
T-D |
Prior to July 22, 1983 |
6.50% |
|
T-D |
On or after July 22, 1983 |
7.50% |
Eligible school employees who were active or inactive on
June 30, 2001 and July 1, 2001, had to elect Class T-D membership between May
17, 2001 and December 31, 2001, or before their termination date, whichever
occurred first.
Elected to remain in Class T-C.
Were eligible to make an election, but did not do
so.
Elected Class T-D
Were hired on or after July 1, 2001.
All members who enter school service on or after July 1,
2001, are Class T-D members.
If you terminated service with a school employer and then
became employed again with a public school employer, PSERS considers you as
returned to service. There must be a clear break in service of 90 days or
more during which the member is not employed by any Pennsylvania public school
entity.
If you had previous school service:
And you were eligible to elect Class T-D but did not, your previous school service will remain Class T-C.
And
you were not eligible to elect Class T-D, your previous school service will
be converted to Class T-D after you have worked and earned credit for 3.00
years of service.
All non-school service remains in Class T-C.
See page 7 for a list of non-school service.
By law, four (4) percent interest is credited annually on
the contributions in your account if you are an active contributing member or
have terminated employment with 5 or more years of credited service.
Members earn two (2) percent interest on current year contributions submitted
monthly to PSERS because not all the funds are in your account for the full
year. Interest is not credited to your account after you terminate
employment with less than 5 years of credited service.
All members should name a beneficiary. A beneficiary
is the person(s) you wish to receive your retirement benefits if you die before
retirement. To do so, complete the Nomination of Beneficiaries (PSRS-187)
form included in your Welcome Packet. The form is also available on the
PSERS website at www.psers.state.pa.us
or by calling 1-888-773-7748 .
You may name one or more primary beneficiaries and one or
more secondary beneficiaries. You must also designate a guardian for each
child under age 18 who is named as a beneficiary. A guardian is the person
designated to handle the child’s financial affairs associated with PSERS.
Keeping your beneficiary designation up to date will ensure
that benefits are paid promptly and in accordance with your wishes. If a
beneficiary has not been named or your beneficiary predeceases you, your
benefits will be paid to your estate.
You should review your beneficiary information if:
You or one of your beneficiaries marries or divorces.
One of your beneficiaries dies.
One of your beneficiaries changes his or her name or
address.
One of your beneficiaries reaches age 18.
You have a child or adopt a child.
You may submit a new Nomination of Beneficiaries (PSRS-187)
to PSERS at any time before applying for retirement. The new form will
supersede all previous forms.
When you have 5 or more years of credited service, your account becomes vested. This means you become eligible for a monthly retirement benefit after termination of employment.
Members who are vested are also eligible for a higher death
benefit before retirement. Your death benefit is determined by your age,
sex, salary, and years of credited service. Your estimated death benefit
is noted on your Statement of Account (see page 10). If your account is
not vested, your death benefit equals your total contributions and interest.
Please refer to the PSERS pamphlet “Let’s Talk About Death Benefits During Employment,” publication #9520, for further information.
Members of PSERS earn eligibility points (credits) for
service time.
Salaried or per diem employees must work 180 days to earn one eligibility point or one full year of service.
Full-time hourly employees earn service credit based on the
actual hours worked and the hours they are expected to work in that position.
Part-time hourly employees must work 1100 hours to earn one
eligibility point or one full year of credited service.
You may not receive more than one year of credited service
within one school year.
This is how you can calculate your credited service:
|
Salaried and Per Diem |
Full-Time Hourly |
Part-Time Hourly
|
|
Days worked / 180 days |
Hours Worked / Expected Hours |
Hours Worked / 1100 hours |
|
Days Worked – 150 Calculation: 150 / 180 = 0.83 |
Hours Worked – 950 Expected Hours – 1000 Calculation: 950 / 1000 = 0.95 |
Hours Worked – 950 Calculation: 950 / 1100 = 0.86 |
|
Days Worked – 195 Calculation: 195 / 180 = 1.00 (One Year of Service Maximum) |
Hours Worked – 950 Expected Hours – 900 Calculation: 950 / 900 = 1.00 (One Year of Service Maximum) |
Hours Worked – 1500 Calculation: 1500 / 1100 = 1.00 (One Year of Service Maximum) |
Under specific guidelines, you may receive service credit for
the following approved leaves of absence:
·
Special Sick Leave
·
Sabbatical Leave
·
Professional Study Leave
·
Activated Military Leave
·
Exchange Teacher Leave
·
Collective Bargaining Leave
Please be aware that you must return to work with your
employer for a period of time equal to the length of the leave or for at least
one year after a sabbatical, military, exchange teacher, or professional study
leave. You must purchase this leave
while you are an active contributing member in order to receive service credit.
Active members of PSERS are eligible to apply to purchase
service credit. PSERS must receive your purchase of service applications while
you are an active contributing member.
|
PSERS strongly recommends you submit your purchase of service application as early in your employment as possible. Purchasing service credit may help you reach eligibility for vesting, a disability benefit, a retirement benefit, or an increased death benefit. Early purchases also help avoid processing delays at retirement.
|
Part-time hourly and part-time per diem employees must meet
the 80-day/500-hour membership requirement in the school year in which PSERS
receives your request to be eligible to purchase service credit.
Active members of the State Employees’ Retirement System (SERS) who
have elected multiple service membership (see page 9) are also eligible to apply
to purchase service credit.
You will receive a Statement of Amount Due if your
purchase of service application is approved.
The Statement of Amount Due will contain options on how to pay for
your purchase of service. Interest
is applied to the unpaid balance at a rate of four (4) percent com-pounded
annually.
Applications are available on the PSERS website at www.psers.state.pa.us
or by contacting PSERS.
Active members who qualify can purchase the following types
of school and non-school service:
School Service·
Return of refund (reinstatement of prior service) ·
Former uncredited full-time service ·
Former uncredited part-time service ·
Former uncredited non-qualifying part-time service ·
Approved leaves of absence (page 6) ·
Intervening military service ·
Service with a county board of school directors (if paid by
County Board of School Directors)
|
Non-school Service·
Out-of-state school service ·
Non-Intervening military service ·
Maternity leave (prior to November1, 1978) ·
United States Government service ·
County nurse service ·
Service with a county board of school directors (if paid by
County Commissioners) ·
Cadet Nurse Corps (during World War II)
|
Please refer to the PSERS pamphlet “Let’s Talk About
Purchasing Credit for Service,” publication #9640, or the PSERS website at
www.psers.state.pa.us for
further details regarding each type of purchase and its respective cost.
You will receive a Statement of Amount Due once your purchase
is approved. PSERS will
automatically credit your account with the service credit and will establish a
debt against your account for the balance due.
The Statement of Amount Due will contain the different payment
options available to you. These options are:
A lump-sum payment within 90 days of the billing date.
Payroll deductions if you are a full-time or part-time
salaried employee. Part-time per
diem or hourly employees may elect this option at the discretion of the
employer. Contact your employer to
set up payroll deductions. (This
option does not apply to SERS members purchasing service credit with PSERS.)
Using money held in an IRA (regular/simple), 401(a), 401(k)
(simple/safe harbor), SEP, 403(b) and governmental 457(b) plans.
A debt to be paid in the form of an actuarial reduction to
your benefit when you retire.
In some cases, you may rescind your purchase.
This will be noted on your Statement of Amount Due.
You must notify PSERS in writing within 90 days of the date of your
statement.
In the POS Debt Plan, a portion of each monthly check you
receive after retiring is set aside to pay for the purchase.
Even though a portion of your check will be used to pay the debt, adding
service credit to your account will usually increase your monthly benefit more
than if you had not purchased the service at all.
Contact your Regional Representative for more information on
the various payment options.
Multiple service membership allows you to combine
your Pennsylvania school service with State Employees’ Retirement System (SERS)
service (for example, Department of Public Welfare, Department of Labor and
Industry, Department of Transportation, etc.).
Choosing this option may enhance your retirement benefit.
New members who enter school or state service
after December 31, 2002, have one year from their first day of employment to
elect multiple service membership.
You can only choose multiple service during this
time unless you have a break in service. If
you have a break in service, you have one year from the date of reemployment to
choose multiple service.
If you elect multiple service:
Your contributions and interest will continue to
earn interest as long as you remain active in either of the two Systems.
Your record of service, contributions, and
interest will remain separate in each System until you terminate service and
apply for a refund or retirement.
When you apply for retirement, each system
independently determines your eligibility and calculates your retirement
benefit. The retirement will be
based on the average of your three highest years’ salary in either System,
your combined contributions, interest, and years of credited service.
The System from which you are retiring will pay you a combined retirement
benefit. You will receive a refund of your contributions and interest from each
System if you are not entitled to a monthly benefit.
Multiple service members who contribute to both
PSERS and SERS at the same time within the same year may have received credit
for more than one year of service. When
you retire, the two retirement systems will review your service and only one
retirement system will give you credit for the service. You
should check your service credit with each System prior to retirement.
All active and vested members receive an annual Statement
of Account (PSRS-5). The
statement shows your total contributions, interest, years of credited service, a
summary of debts against your account (if applicable) and an estimate of your
monthly retirement benefits (if eligible).
PSERS will mail your statement after all of your employer(s) report your
salaries, contributions, and annual service for that school year.
Any adjustments or purchases of service credit that are transacted after
June 30 will appear on the following year’s Statement of Account.
The statement will also list your principal beneficiary
unless you requested to omit the beneficiary information.
Your beneficiary information will not appear on your statement if you
submitted a Nomination of Beneficiaries (PSRS-187) before April 1975.
In this case, you must submit a new Nomination of Beneficiaries
(PSRS-187) to PSERS if you want to have the name(s) of your beneficiary(ies)
appear on your statement.
Refunding
Your Contributions and Interest
You may refund your contributions and interest if you
terminate employment in a public school. A
refund is your only option if you are not eligible to defer receipt of your
monthly benefit until a later date (page 12) or to receive a monthly retirement
benefit.
This applies if:
·
You are under age 62 and have less than five years of
credited service.
·
You are age 62 or older with less than one year of service.
*
Special rules apply if you
terminated service before July 1, 2001. Contact
PSERS for more information.
To receive a refund, you must complete an Application for
Refund (PSRS-59). By law, PSERS
will not credit interest to accounts for members who terminate their school
employment with less than 5 years of credited service.
Members on an unpaid leave of absence will continue to receive interest
for up to 24 months.
PSERS is also required by law to withhold 20 percent for
federal income tax on the taxable portion of your refund unless you elect a
direct rollover to another eligible retirement plan.
The taxable portion of your refund may also be subject to an additional 10 percent early retirement tax if you:
·
Terminate service before reaching age 55.
·
Choose to receive a lump sum or installment payments prior to
age 59 1/2.
·
Do not roll the funds into another eligible retirement plan.
For more information about the tax consequences when
withdrawing your retirement funds, please refer to the PSERS pamphlet “Let’s
Talk About Taxes on Your Retirement Benefits,” publication #9600, or the
PSERS website at www.psers.state.pa.us.
If you return to school service after receiving a refund of
your contributions and interest, you may apply to reinstate your service credit.
For additional information, please refer to the Return of Refunds section
in the PSERS pamphlet “Let’s Talk About Purchasing Credit for Service,”
publication #9640.
Deferring
Your Retirement Benefit
When you terminate school employment, you may leave your
contributions and interest in your PSERS account and defer receipt of a benefit
until a later date. Your
contributions and interest earn four (4) percent interest compounded annually.
You can defer your retirement benefit if:
You terminate employment with at least five years of credited
service.
You are 62 years of age or older with at least one year of
credited service.
When you defer your benefit, you become eligible for the
following benefits:
If you die prior to receipt of a retirement benefit, death
benefits under Option 1 are payable to your designated beneficiary(ies).
The amount payable will be based on your age, final average salary, and
service at the time of your death.
An early reduced benefit at any time prior to normal
retirement age. The reduction will
be based on your age and credited service at the time of retirement.
The amount payable will be based on your age, final average salary, and
service at the time you apply for monthly benefits.
An unreduced benefit at normal retirement age.
It is extremely important to notify PSERS of any address and beneficiary changes. Keeping this information current will ensure you receive important retirement information and that any death benefit will be paid to the correct person(s).
For further information, please refer to the PSERS pamphlet “Let’s
Talk About Your PSERS Benefits and Leaving Employment,” publication #9580.
|
Receipt of your retirement benefits is not automatic. You must apply for your benefits by submitting a Retirement Application (PSRS-8) or Disability Retirement Application (PSRS-49). PSERS strongly suggests that you attend a Foundations for Your Future program and a Retirement Exit Counseling Session (page 24). Contact your Regional Office (page 26) for more information. |
Normal
Retirement (Unreduced Benefit)
Normal retirement is a retirement benefit that has no penalty
because you meet all age and/or service requirements.
You may receive a normal retirement benefit when you terminate public
school employment and if:
You are age 62 with at least one full year of credited
service.
You are age 60 and have 30 or more years of credited service.
You have at least 35 years of credited service regardless of
age.
2%
X Final Average Salary X Years of Credited Service =
Yearly
Benefit Under the Maximum Single Life Annuity
If you are a Class T-D member, you will receive an annual
retirement benefit, payable monthly, under the following calculation:
2.5%
X Final Average Salary X Years of Credited School Service
+
2%
X Final Average Salary X Years of Credited Non-School Service =
*
The above calculation applies to
the Maximum Single Life Annuity retirement option. All other retirement options have an option reducing factor
applied to the basic calculation.
Final average salary is an average of the three highest
school years. For terminations
before the end of the school year, salary for that part of the year may be used
in combination with a proportionate percentage of a prior school year.
School years with part-time service may be annualized for the salary
calculation.
In addition to receiving a monthly benefit, you may elect to receive all or part of your own contributions and accrued interest except for payments made for the purchase of maternity leave or county nurse service. You may withdraw your money in up to four installments. The remainder of your benefit will be paid in reduced monthly payments in accordance with the benefit option you select. The amount of reduction to your monthly benefit depends on how much you elect to withdraw.
You have several options in the way you may receive your
retirement benefit.
The options include:
·
Maximum Single Life Annuity
·
Option 1
·
Option 2
·
Option 3
·
Customized (Special) Option 4
Maximum Single Life Annuity
The Maximum Single Life Annuity provides you with the highest
monthly benefit amount for your retirement. If at the time of your death you have not received an amount
equal to your total contributions and interest, PSERS will pay the balance to
your beneficiary. You may name more
than one beneficiary and change your beneficiary(ies) at any time.
Under Option 1, your monthly benefit is reduced based on your
sex and age at the time of retirement. PSERS
will then determine the “Present Value” of your account.
The Present Value is the amount allocated at the time of your retirement
to fund the pension benefit over your expected life.
If at the time of your death, you have not received an amount equal to
the Present Value of your account, the balance will be paid to your beneficiary.
You may name more than one beneficiary and change your beneficiary(ies)
at any time.
If you choose Option 2, the same monthly benefit that will be
paid to you will also be paid to your survivor annuitant after your death.
In exchange for this survivor benefit, your monthly check is reduced.
This reduction is based on your sex and age and the sex and age of your
designated survivor annuitant at retirement.
You may name only one survivor annuitant.
Under Option 3, your monthly benefit is also reduced.
This reduction is based on your sex and age and the sex and age of your
designated survivor annuitant at retirement.
After your death, however, your survivor annuitant will only receive half
of the monthly benefit that was paid to you at retirement.
You may name only one survivor annuitant.
This option allows you to customize your benefit in the event
that none of the other options meet your needs. This option is subject to
certain conditions. You should
contact a PSERS regional representative for more information on this option.
Under Options 2, 3, or 4, you may name a new survivor annuitant and/or elect a
different option if your marital status changes or your designated survivor
annuitant dies before you. PSERS
will recalculate your monthly benefit based on your new survivor annuitant’s
age and sex and your age and sex at the time of the change. It is possible that your monthly benefit will be further
reduced in this recalculation. If
your survivor annuitant dies before you and you do not elect a different option,
you will continue to receive a reduced monthly benefit.
Special rules apply if you are divorced. Contact your local regional office for more information
before making a change.
Your PSERS monthly retirement benefits are subject to Federal
Withholding Tax. At the time of
your retirement, you should file a Form W-4P for withholding of federal
income tax. If you do not file a
Form W-4P, federal law requires PSERS to withhold tax at a rate of
“married with three exemptions.” You
may change the amount of taxes withheld at any time by completing a Form W-4P.
You can obtain this form from the IRS, PSERS, and the PSERS website at www.psers.state.pa.us.
PSERS retirement benefits are not subject to Pennsylvania
state or local income tax. Therefore,
PSERS will not withhold these taxes from your monthly benefit payments.
If you are planning to live elsewhere, you should contact state and local
tax agencies in that state to determine whether your benefit is taxable.
There is a mandatory 20 percent federal withholding tax
penalty when withdrawing your contributions and interest from your PSERS
retirement account. You can avoid
this withholding tax by rolling over the taxable portion of any lump-sum
distribution into an “Eligible Retirement Plan.”
Federal law will allow members to roll over funds received
from PSERS at retirement to the following variety of plans:
403(b) tax sheltered annuities
Governmental 457(b) plans
Individual Retirement Account (IRA-regular)
Simplified Employee Pension (SEP)
401(a) plans
Safe Harbor 401(k) plans
Roth IRA (Effective January 1, 2008)
Tax-free withdrawals may be paid to the member with the
first retirement check or can be directly rolled over into an “Eligible
Retirement Plan.”
The taxable portion of your withdrawn contributions and
interest may also be subject to an age-related additional 10 percent early
retirement tax. For further
information, please refer to the PSERS pamphlet “Let’s Talk About Taxes
on Your Retirement Benefit,” publication #9600, or the PSERS website at www.psers.state.pa.us.
Sometimes illness or other factors prohibit you from
performing the work that you were hired to do. This disability could be physical or mental.
If this is the case, then you may be eligible to receive a
disability benefit. You need to
meet all three of the following requirements to apply for a disability benefit.
You must have at least five years of credited service with
PSERS.
You must apply to PSERS for disability benefits within
two
school years from the last day of service or paid leave.
You must provide medical documentation which proves you are
unable to do your job due to a disability.
You may apply for disability benefits even though you are
receiving Workers’ Compensation, private (disability) insurance, or Social
Security disability. Your
eligibility for a PSERS disability benefit is not affected by any other
disability benefit you may be receiving. Your
disability benefit from another plan, however, may be affected by your PSERS
disability benefit. You should
check with the other disability plan for details.
PSERS medical examiners will review your application and
related medical documentation. They
will determine:
Your eligibility to receive a disability benefit.
Your effective date of disability (retirement date) will
generally be the day after the last day of paid service or paid leave, whichever
is later.
Once you retire, you cannot switch from a
regular retirement to a disability retirement benefit.
Your disability benefit is subject to an annual earnings limitation. This is the difference between your last school year salary and your yearly disability benefit.
PSERS does not require you to resign your position when you apply for or receive a disability benefit. You are required to notify PSERS if you return to active public school service. Your disability benefit will stop and you will start to earn service credits until you retire. PSERS will credit your original service to your retirement account along with a portion of your contributions and interest.
For more information concerning disability benefits, refer to
the PSERS pamphlet “Let’s Talk About PSERS Disability Retirement
Benefits,” publication #9540 or contact your PSERS regional representative
if you would like an estimate of the amount you could receive under the various
options.
You do not have the option to withdraw your
contributions and interest with a disability benefit. You may elect the Maximum Single Life Annuity or a joint and survivor
option (Option 2, 3, or Customized Special Option 4). Your beneficiary(ies)/survivor annuitant receives a benefit based on what
you would have received under a regular retirement benefit.
Maximum Single Life Annuity is the highest amount you can
receive in a monthly benefit. PSERS
will calculate a “Present Value” of your regular retirement at the time of
your retirement. If at the time of
your death, you have not received an amount equal to the Present Value of your
account, the balance will be paid to your beneficiary. You may name more than one beneficiary and change your beneficiary(ies)
at any time.
Option 2 will reduce your monthly benefit.
In exchange for this survivor benefit, after your death, PSERS will
provide your survivor annuitant with the same monthly benefit you would have
received under a regular retirement (Option 2). This benefit is paid for the life of your survivor annuitant.
You may name only one survivor annuitant.
Under Option 3, your monthly benefit is reduced.
After your death, PSERS will pay one-half the amount you would have
received under a regular retirement (Option 3) to your survivor annuitant for
life. You may name only one
survivor annuitant.
This option allows you to customize your benefit in the event that none of the other options meet your needs. This option is subject to certain conditions. You should contact a PSERS regional representative for more information on this option.
Under Options 2, 3, or 4, you may name a
new survivor annuitant and/or elect a different option if your marital status
changes or your designated survivor annuitant dies before you. PSERS will
recalculate your monthly benefit based on your new survivor annuitant’s age
and sex and your age and sex at the time of the change. It is possible
that your monthly benefit will be further reduced in this recalculation.
If your survivor annuitant dies before you and you do not elect a different
option, you will continue to receive a reduced monthly benefit. Special
rules apply if you are divorced. Contact your local regional office for
more information before making a change.
Early retirement, also known as Withdrawal Retirement, is
available to members who are under age 62 and have at least five years of
credited service. An early
retirement factor is used to reduce your monthly benefit based on your age, sex,
and years of service at time of retirement.
A special early retirement is available if you are at least
55 and have 25 or more years of credited service (“55/25”). A “55/25” retirement is reduced by three (3) percent per year or1/4
percent per month for the period you are under normal retirement. The reduction under this method of retirement can not exceed 15 percent
of your annual maximum benefit.
To provide you with an immediate source of income, PSERS will
calculate your initial retirement benefit using only salaries and service
already reported by your school employer(s) at the time your application is
received. After your employer(s)
submit the final reports indicating all salaries you received and service
rendered before retirement, PSERS will review your account thoroughly and
calculate your final benefit.
You may have received a retirement estimate before
retirement. It is probable that the
benefit amount shown on the estimate will be higher than your initial retirement
benefit.
PSERS will send you a retroactive payment in the event that
you were underpaid. If you were
overpaid, PSERS will require you to return the overpayment or accept a reduction
of your monthly benefit to recover the overpayment.
Once PSERS reviews your
Application for Retirement
(PSRS-8), an initial letter is sent to confirm your retirement choices and
benefit options. Included with the
letter is the form Intent to Change the Terms of the Retirement Plan
(PSRS-1242). If you wish to change your retirement option, PSERS must receive the
Intent
to Change the Terms of the Retirement Plan by the date stated on the form.
Monthly benefit payments are dated and mailed or
electronically transferred on the last business day of the month for which they
are due. For example, the January
benefit is issued on the last working day of January. If you receive your benefit by check and it is not delivered by the 10th
day of the following month, write or call PSERS with the following information:
the month of the missing check, your social security number, address, and
home telephone number. PSERS will issue you a new check in approximately three weeks
as long as the original check was not cashed.
PSERS recommends that you receive your monthly check
electronically. To do so, you need
to submit an Authorization for Direct Deposit-Electronic Transfer of Monthly
Benefit (PSRS-116) which can be obtained by calling PSERS or printed from
the PSERS website at www.psers.state.pa.us.
Your monthly benefit will be automatically deposited into your checking
or savings account by 9:00 a.m. on the last business day of the month.
PSERS must receive any address changes or electronic transfer requests by the 5th of the month for the change to be in effect for the payment released at the end of the month. An electronic transfer change may take up to two (2) months to go into effect. Therefore, keep your current account open until you receive your first payment into your new account.
Your monthly benefit may be subject to certain deductions
such as federal withholding tax and health insurance premiums. You may access a summary of your monthly benefits at anytime by using the
online Web application through PSERS interaction available on the PSERS website at
www.psers.state.pa.us.
By law, PSERS must deduct spousal and child support from your
monthly benefit if ordered to do so. In
addition, if directed by the IRS, PSERS is required to place a tax levy on your
monthly benefit and deduct the amount specified from your benefit.
PSERS retirement benefits may be subject to equitable distribution in divorce proceedings. This means that retirement benefits may be classified as marital property and can be divided in the event of a divorce.
At the onset of the divorce proceedings, you may write to
PSERS and request the value of your account for the period you and your spouse
were married. Be sure to include
the date of marriage and the date of legal separation unless you are advised by
your attorney to request a different date.
By law, equitable distribution of the retirement benefits payable to the PSERS member is accomplished through an Approved Domestic Relations Order (ADRO). An ADRO is a court order establishing the manner in which the retirement benefits of a PSERS member and the alternate payee (usually the former spouse) should be divided when the benefits become payable.
If your PSERS retirement pension is not subject to equitable
distribution or is not considered marital property, submit a Waiver of Pension
Benefits (PSRS-1286) form which must be signed by your former spouse. A copy of the official Property Settlement Agreement is also acceptable
if it specifically states that your former spouse is waiving any and all claims
to your PSERS pension.
If your PSERS retirement pension is considered marital property and subject to equitable distribution, PSERS will require an Approved Domestic Relations Order (ADRO).It is recommended that the proposed Domestic Relations Order (DRO) be submitted to PSERS for review and approval prior to obtaining the court signature.
|
A
delay in the payment of your benefit may occur if the proper documentation is
not submitted at the time of divorce. |
For more information, please refer to PSERS pamphlet, “Let’s
Talk About Your Retirement Benefit and Divorce,” publication #9560.
A member of PSERS or a school employer who disagrees with a
decision reached by the PSERS staff regarding any retirement benefit has the
right to request a review by the PSERS Executive Staff Review Committee. After reviewing all the facts available in the account, the committee
will approve or deny the appeal. All
appeal requests must be made in writing and sent to: Executive
Staff Review Committee, PO Box 125, Harrisburg, PA 17108-0125.
If a member’s appeal has been denied by the Executive Staff
Review Committee, the member has the opportunity to request an administrative
hearing before an independent hearing examiner. The member and/or the school employer may be represented at
the administrative hearing by legal counsel. An administrative hearing request must be made in writing and sent to:
Appeal Docket Administrator, Public School
Employees’ Retirement System, PO Box 125, Harrisburg, PA 17108-0125.
The request for an Executive Staff Review or administrative
hearing must be filed within 30days of the date the letter or decision you wish
to dispute is received.
You will receive a
Retired Member Handbook upon
retirement. This publication
informs you of all your benefits as a retired PSERS member. You will also receive the quarterly retired member
newsletter, Benefits Hotline. Following
are some important things to remember during retirement.
Notify PSERS if your name or address changes.
Read your quarterly newsletter to keep updated on retirement topics such as Cost-of-Living adjustments, changes in tax laws, etc.
Contact PSERS to update your beneficiary information.
PSERS retirees, survivor annuitants, their spouses or
surviving spouses, and their dependents, may elect to be covered by the PSERS
group health insurance plan. For
more information contact the Health Options Program (HOP) at 1-800-773-7725 or
check the HOP website at www.hopbenefits.com.
You will receive a 1099-R statement at the end of each January. This statement will show your gross benefit amount, the taxable portion of your benefit, and the total withholdings for federal income tax for the prior year.
PSERS retirees may return to Pennsylvania public school
service without the loss of their monthly benefit under the provisions of Act
2004-63. This law specifically
defines the ability of a PSERS retiree to be employed by a Pennsylvania public
school entity if an emergency or shortage of personnel exists and for
extracurricular situations. This
law does not permit Disability Annuitants to return to any public school service
without the loss of their monthly benefit.
Whenever a school employer determines there has been an
increase in workload that creates a serious impairment of service to the public
or there is a shortage of personnel, a retiree may return to Pennsylvania public
school service for a period not to extend beyond the school year during which
the emergency or shortage occurs.
The school employer is expected to make a “good faith”
effort to secure non-retired personnel first. Employment may continue throughout the school year so long as the
emergency exists.
PSERS reserves the right to review an
employer’s determination that a qualifying emergency or shortage of personnel
exists.
A retiree may be employed by a Pennsylvania public school
entity in an extra curricular position provided:
The position is performed primarily outside regular
instructional hours.
The position is not part of the mandated educational
curriculum.
The retiree has a separate written contract with the school
employer which must contain both:
