Class T-F Election Resources
Important Information About Choosing Your Membership Class
Class T-F FAQs
Additional Resources
New members of PSERS hired on or after July 1, 2011,are automatically enrolled in
PSERS as a member of Class T-E. New employees have 45 days from
the date of notification to elect membership into Class T-F. If
you are a new employee, please be aware of the following:
·
No action is
required to stay in Class T-E.
· Your election of Class T-F is binding.
·
Once your class is
determined by your election, or your inaction, you will remain in that
class permanently.
·
You will not have
another opportunity in the future to elect to change your class of
membership.
Class T-E and T-F...What's the Difference?
There are two distinct differences between Class T-E
and Class T-F. These are:
1. The member contribution rate (the
percent of money your employer withholds from your pay as your
contribution toward your retirement benefit).
2. The pension multiplier used to
determine your retirement benefit at the time you retire.
|
Class T-E |
Class T-F |
|
|
Contribution Rate |
7.50% (base rate)
with “shared risk” provision that could cause your total
contribution level to fluctuate between
7.50% and 9.50% |
10.30% (base rate)
with “shared risk” provision that could cause your total
contribution level to fluctuate between
10.30% and 12.30% |
|
Pension Benefit Multiplier |
2.0% |
2.5% |
With a “shared risk” program, Class T-E and Class T-F members benefit when
investments of the fund are doing well and share some of the risk when
investments underperform. The
member contribution rate could increase or decrease every three years
starting July 1, 2015, dependent on the investment performance of PSERS.
The member contribution rate
would never go below the base rate of 7.50% for Class T-E and 10.30% for
Class T-F members, nor above 9.50% for Class T-E and 12.30% for Class
T-F members.
PSERS is a 401 (a) governmental defined benefit retirement plan, which means your retirement benefit is defined by a calculation or formula. Unlike defined contribution retirement plans, the amount of your future PSERS monthly benefit is not directly dependent on the amount of your contributions and investment earnings. Your PSERS benefits are set by state law and guaranteed by the Commonwealth of Pennsylvania. Once you have enough service credits you are guaranteed to receive a lifetime monthly benefit.
Pension Multiplier
X Credited
Years of Service X
Final Average Salary
Below is an example to assist you in your decision to
remain a Class T-E member or elect to become a Class T-F member.
This example is based on a member who has reached superannuation*
(an unreduced retirement benefit) with 35 years of credited service and
retires at age 57 with a final average salary of $50,000.**
The Annual Retirement Benefit
figures represent a benefit for the Maximum Single Life Annuity.
|
Class T-E |
Class T-F |
|
|
Total Member Contributions |
$50,000 x 7.50% x 35 years
= $131,250 |
$50,000 x 10.30% x 35
years = $180,250 |
|
Annual Retirement Benefit |
2% x 35 Years x $50,000 =
$35,000 (paid as monthly benefit of $2,916) |
2.5% x 35 Years x $50,000
=
$43,750 (paid as monthly benefit of $3,645) |
|
In this case, the member contributed $131,250 over the course of his service toward a maximum annual benefit of $35,000 to be paid for his lifetime. |
In this case, the member
contributed $180,250 over the course of his service toward a
maximum annual benefit of $43,750 to be paid for his
lifetime. |
*For Class T-E and Class T-F members, superannuation
is achieved by either working until age 65 with a minimum of three
years of service credit
**This example assumes a fixed salary over the member’s career.
