Understanding Your PSERS Plan and Retirement Eligibility

Planning for retirement begins with understanding how the Public School Employees’ Retirement System (PSERS) works and, most importantly, which membership class applies to you.

PSERS is an agency of the Commonwealth of Pennsylvania that administers retirement benefits for Pennsylvania’s public school employees. The system is funded through member contributions, employer contributions, and investment earnings. PSERS currently serves more than 500,000 members and beneficiaries.

PSERS membership includes employees of Pennsylvania public school districts, intermediate units, vocational or career and technical schools, participating charter schools, community colleges, and state-owned universities.

Understanding your membership class, contribution requirements, retirement eligibility, and benefit options can help you make informed decisions about your long-term retirement income.

Which PSERS Retirement Plan Are You In?

Your PSERS membership class depends largely on when you first became an active PSERS member.

The primary membership classes are:

T-C and T-D: Older defined-benefit classes generally covering members who first became members before July 1, 2011.
T-E and T-F: Defined-benefit classes for members who first became members on or after July 1, 2011, but before July 1, 2019.
T-G and T-H: Hybrid defined-benefit/defined-contribution classes for members who first became active PSERS members on or after July 1, 2019.
Class DC: A defined-contribution-only option available to eligible members who first became active PSERS members on or after July 1, 2019.

T-C and T-D

For T-C and T-D members, the contribution rate depends on the membership class and, in some cases, when continuous employment began.

Current contribution rates are:

T-C: 5.25% for members with continuous employment beginning before July 22, 1983, or 6.25% for those beginning on or after July 22, 1983.
T-D: 6.50% for members with continuous employment beginning before July 22, 1983, or 7.50% for those beginning on or after July 22, 1983.

The pension multiplier is generally 2.5% for T-D, while T-C members have different benefit provisions depending on their service.

T-E and T-F

T-E and T-F apply to members who first became active PSERS members on or after July 1, 2011, but before July 1, 2019.

T-E

Base employee contribution rate: 7.50%
Subject to PSERS’ Shared Risk/Shared Gain provisions
Pension multiplier: 2.0%

T-F

Base employee contribution rate: 10.30%
Subject to PSERS’ Shared Risk/Shared Gain provisions
Pension multiplier: 2.5%

T-E and T-F are closed to new members. Employees first becoming active PSERS members on or after July 1, 2019 generally enter the T-G/T-H/DC system instead.

T-G and T-H: The Hybrid Retirement Plans

T-G and T-H are the current hybrid membership classes for employees who first become active PSERS members on or after July 1, 2019.

Both classes combine:

A defined-benefit pension, and
A defined-contribution investment account.

A member who first becomes an active PSERS member on or after July 1, 2019 is automatically enrolled in Class T-G. The member then has a 90-day election period to remain in T-G or elect T-H or Class DC. The election is irrevocable.

Class T-G

The defined-benefit component has a base employee contribution of 5.50%, with a 1.25% pension multiplier. The DB rate is subject to Shared Risk/Shared Gain provisions.

For the defined-contribution component:

Employee contributes 2.75%.
Employer contributes 2.25%.

The current total employee contribution is therefore 8.25% — 5.50% to the defined-benefit component and 2.75% to the defined-contribution component.

Class T-H

The defined-benefit component has a base employee contribution of 4.50%, with a 1.00% pension multiplier. The DB rate is subject to Shared Risk/Shared Gain provisions.

For the defined-contribution component:

Employee contributes 3.00%.
Employer contributes 2.00%.

The current total employee contribution is therefore 7.50%.

The Defined Contribution-Only Option

Eligible new members may elect Class DC during their 90-day membership-class election period.

Under Class DC:

The employee contributes 7.50% of compensation.
There is no defined-benefit pension.
The retirement benefit is based on the value of the DC account, including employee and applicable employer contributions and investment performance.
Class DC members do not receive a monthly PSERS defined-benefit pension.
Class DC members cannot purchase service credit or elect Multiple Service membership with SERS.

For T-E, T-F, T-G, and T-H, the DB contribution rate can change under PSERS’ Shared Risk/Shared Gain provisions. For the current three-year period beginning July 1, 2024, the member rates are at their base rates. The next investment-performance review covers the ten-year period ending June 30, 2026, with any resulting change effective July 1, 2027.

When Can You Retire With Full PSERS Benefits?

Retirement eligibility varies by membership class.

T-C and T-D

Normal retirement generally requires one of the following:

Age 62 with at least 1 year of service;
Age 60 with at least 30 years of service; or
35 years of service regardless of age.

T-E and T-F

Normal retirement generally requires:

Age 65 with at least 3 years of credited service; or
Any combination of age and credited service totaling 92, with at least 35 years of credited service.

T-G

Normal retirement generally requires:

Age 67 with at least 3 years of credited service; or
Any combination of age and credited service totaling 97, with at least 35 years of credited service.

T-H

Normal retirement generally requires:

Age 67 with at least 3 years of credited service.

Unlike T-G, T-H does not have a Rule of 97 normal-retirement provision.

What About Early Retirement?

Early retirement is generally available before normal retirement, but the benefit may be reduced based on the member’s age, service, membership class, and retirement circumstances.

For T-G and T-H members, the early-retirement reduction applies to the defined-benefit component. Different reduction factors apply depending on when the member retires and the amount of credited service.

A special early-retirement provision is available for certain members:

T-C, T-D, T-E, T-F, and T-H: age 55 with at least 25 years of credited service (“55/25”).
T-G: age 57 with at least 25 years of credited service.

Under the applicable 55/25 provision, the benefit is reduced by 0.25% per month (3% per year) for each month the member is below the normal retirement requirements. T-G has its own age-57/25-years provision.

Frequently Asked Questions

What are the different PSERS classes?

The major PSERS membership classes are T-C, T-D, T-E, T-F, T-G, T-H, and DC. Your class is determined primarily by when you first became an active PSERS member and, for certain older classes, your employment history.

What is the current PSERS default class for a new employee?

An employee who first becomes an active PSERS member on or after July 1, 2019 is automatically enrolled in Class T-G. The employee has 90 days to elect T-H or Class DC instead. If no election is made, the member remains in T-G. The election is irrevocable.

Does T-H have the Rule of 97?

No. Class T-G has a Rule of 97 normal-retirement provision, provided the member has at least 35 years of credited service. Class T-H’s normal retirement provision is age 67 with at least three years of credited service.

What is the current employee contribution for T-G and T-H?

For the current period beginning July 1, 2024, the total employee contribution is 8.25% for T-G and 7.50% for T-H. T-G consists of 5.50% DB plus 2.75% DC; T-H consists of 4.50% DB plus 3.00% DC. These rates are subject to future Shared Risk/Shared Gain adjustments.

Does PSERS have a Defined Contribution-only option?

Yes. Eligible members who first become active PSERS members on or after July 1, 2019 can elect Class DC during their 90-day election period. Class DC provides no defined-benefit pension; the retirement benefit is based on the DC account and its investment performance.