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Your Contribution Rate

As a member of PSERS, your employer withholds a percentage of your salary from your pay and submits it to PSERS. 

Your membership class and employment history determine your contribution rate. The "Member Contribution Rates" table shows the various rates at which members contribute to PSERS.  The member contribution rates are set by law.  You cannot choose to lower or raise your contribution amount.

Member Contribution Rates
Membership Class Continuous Employment Since Defined Benefit (DB) Contribution Rate DC Contribution Rate Total Contribution Rate
T-CPrior to July 22, 19835.25%N/A 5.25%
T-COn or after July 22, 19836.25%N/A 6.25%
T-DPrior to July 22, 19836.50%N/A6.50%
T-DOn or after July 22, 19837.50%N/A7.50%
  T-E On or after July 1, 2011 7.50% base rate with shared risk/shared gain provision
Shared Risk Effective 7/1/2021: +0.50%
N/A
Prior to 7/1/2021: 7.50%

After 7/1/2021: 8.00% 


T-F On or after July 1, 2011 10.30% base rate with shared risk/shared gain provision
Shared Risk Effective 7/1/2021: +0.50%
N/A
Prior to 7/1/2021: 10.30%

After 7/1/2021: 10.80% 

T-GOn or after July 1, 20195.50% base rate with shared risk/shared gain provision
Shared Risk Effective 7/1/2021: +0.75%
2.75%
Prior to 7/1/2021: 8.25%

After 7/1/2021: 9.00% 


T-HOn or after July 1, 20194.50% base rate with shared risk/shared gain provision
Shared Risk Effective 7/1/2021: +0.75%
3.00%
Prior to 7/1/2021: 7.50%

After 7/1/2021: 8.25%
DCOn or after July 1, 2019N/A7.50% 7.50%


Earnings for Which Contributions Must Be Withheld

  • Retirement contributions must be paid on your qualified earnings.  Qualified earnings are: 
  • Salary – The money paid to you by your employer for the job you hold.
  • Overtime - Wages paid over and above your regular salary.
  • Extracurricular activities - Wages paid for additional duties performed after normal working hours, such as earnings paid to coaches, ticket takers, chaperones for school activities, yearbook advisors, etc.
  • Jury duty - Salary paid while serving on jury duty.
  • Difference payments – Payment made to a teacher who is on leave and the difference between the teacher's regular, full salary and the salary paid to the substitute teacher who fills in for this teacher.
  • Incentive payments – Incentive payments that meet the following criteria:
    • The payment must be tied to work performance.
    • There is an objective means to calculate the payment.
    • The employer is contractually obligated to make the payment if the performance standards are met and are not discretionary or subjective.
    • The payment is a significant part of your income.
  • Paid Leave – Salary paid while on sick, annual, or personal leave.

Maximum Earnings Subject to Contributions

IRS Section 401(a) (17) of the Internal Revenue Code limits the amount of compensation subject to retirement contributions for active employees entering PSERS membership on or after July 1, 1996.  The limit can change from year to year.  The salary limit for 2022 is $305,000.00. 

If you earn more in a calendar year than that year's limit, all salary exceeding the limit should not have retirement contributions withheld.  If the determination period consists of fewer than 12 months, the compensation limit for that year will be multiplied by a fraction, the numerator of which is the number of months in the determination period and the denominator of which is 12. 

In addition, the IRS Section 415(c) of the Internal Revenue Code limits the amount which can be contributed to Defined Contribution plans in a calendar year. The contribution limit for 2022 is $61,000.

Interest on Your DB Contributions

The DB accounts of active and vested members of PSERS accrue interest at a rate of 4% compounded annually.  Interest is posted to your DB account at the end of the school year.

Any DB contributions made during the current school year by an employee who does not qualify for membership within that same school year are considered non-qualifying contributions.  Non-qualifying DB contributions do NOT earn interest and must be refunded to the member without interest. Refer to the "Part-Time Employees" section of this handbook for more information on qualifying for membership.

Contributions to PSERS Defined Contribution (DC) Plan do not earn interest. The DC component of your retirement is based on the amount of contributions made by you and your employer, the investment performance on those contributions, and the fees, costs, and expenses deducted from your DC account. Your contributions have the potential to grow based on investment earnings, but are not guaranteed against loss in declining investment markets


Taxes and Your Contributions

Mandatory contributions are excluded from your gross income for federal tax purposes only and are federally tax deferred.   Class T-G, Class T-H and Class DC members may also elect to add after-tax contributions to their DC account. For more information on after-tax contributions refer to the "Investment Options" page.


Additional Investment Information

Detailed information pertaining to PSERS investments can be viewed on the "Investment Program" page.