Class T-F Election Resources
Important Information About Choosing Your Membership Class
TE-TF Additional Resources
Listed below are additional resources to aid you in making a decision as to which membership class may best meet your future financial needs.
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:
The member contribution rate (the percent of money your employer withholds from your pay as your contribution toward your retirement benefit).
The pension multiplier used to determine your retirement benefit at the time you retire.
||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
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.
The benefit eligibility is the same for both Class T-E and Class T-F members. PSERS’ basic formula to calculate a Maximum Single Life Annuity retirement benefit at superannuation is:
Pension Multiplier X Credited Years of Service X Final Average Salary = Yearly Annuity
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.
|Total Member Contributions
||$50,000 x 7.50% x 35 years = $131,250
(or $144 withheld from each bi-weekly pay)
|$50,000 x 10.30% x 35 years = $180,250|
(or $198 withheld from each bi-weekly pay)
|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, or a combination of age and service that is equal to or greater than 92 with a minimum of 35 years of service. **This example assumes a fixed salary over the member’s career.
Class T-F Election Frequently Asked Questions
Click here for printable (pdf) version of these questions and answers.
Q. What happens if I lost my T-F Membership Class Election Form within the election deadline?
A. Contact our Member Service Center at 1.888.773.7748 immediately for a new form. The election deadline will not be extended due to the member’s misplacement of the form.
Q. I never received a T-F Membership Class Election Form. What should I do?
A. Only persons who become new members of PSERS after July 1, 2011 will be provided with this opportunity. If a person has not yet qualified for membership, or has been a member before, they will not receive this form. Click here for PSERS membership rules. Contact our Member Service Center at 1.888.773.7748 immediately so they can verify if you should have received the form.
Q. May I get more time to make up my mind so I can seek professional advice?
A. No, the election deadline will not be extended. The Retirement Code specifically stipulates that a member will receive only a 45-day opportunity to make this decision.
Q. How do I return the form?
A. The form must be returned to PSERS (not the employer) by the deadline stated in the materials received. The form may be returned in the postage paid envelope included with the mailing, dropped off at any of PSERS’ offices, faxed or even sent via certified mail. Note: PSERS cannot accept an email containing a scanned version of the signed form.
Q. If I decide to elect Class T-F, how do I know my form was received by PSERS within the 45-day timeframe?
A. To know with certainty whether or not your form is received by PSERS before the timeframe expires, you can personally drop off the form at any PSERS office, fax it so you know if it was transmitted successfully or send it via certified, registered or return receipt mail. Remember that the form must be received by PSERS before the 45-day timeframe expires. Having the election ballot in the mail by the time the 45-day election period ends does not guarantee that it will be received at PSERS within the timeframe.
Q. If I choose to elect Class T-F and still have time left in the election period, may I change my mind?
A. No, once the election has been made it is final and binding. A member will not be able to revert to Class T-E once they elect to become Class T-F.
Q. Do I need to inform my employer that I am electing to become a Class T-F member?
A. No. PSERS will notify your employer and your employer will then begin withholding contributions from your pay at the higher contribution level required for Class T-F members. Your employer will also make arrangements with you to collect the additional contributions from you that are owed going back to your initial qualification as a member of PSERS.
Q. If I become a Class T-F member, do I owe additional contributions to make up for when I was contributing as a Class T-E member?
A. All of your qualifying service with PSERS would be at the Class T-F contribution rate and pension multiplier rate. Any pays you received from your employer prior to your election were at the lower Class T-E contribution rate. An additional 2.8% in contributions for all pays received prior to your Class T-F election will be collected over time by your employer.
Q. Is there a timeframe in which the owed T-F contributions must be paid?
A. No, this is entirely between the employee and employer.