The Commonwealth of Pennsylvania administers the pension plan for Pennsylvania's public school employees. As a PSERS member, you contribute to a safe, secure, and guaranteed benefit payment(s) from one of the largest public pension plans in the nation.

New Hires: Automatic Enrollment

Employees scheduled to work 25 hours or more a week are considered members of PSERS from day one of employment, and are automatically enrolled & required to contribute to a hybrid pension program.

This hybrid plan is made up of a defined benefit (DB) and defined contribution (DC) plan.

Default Pension Class: Class TG

New members are enrolled in Class TG by default and have 90 calendar days from the first day worked to change to one of two other pension classes: Class TH and Class DC.

Your Pension Contributions

The pension Class in which you choose to enroll will determine your pension contribution deduction on a pre-tax basis.

Lifetime Enrollment Decision

Switching to a different class is a lifetime enrollment that is irrevocable. If a new member does not switch to a different class, PSERS will assume you want to remain in Class TG which is also a lifetime, irrevocable enrollment.

Important: Changes Must Be Made Through PSERS

Changes to your pension can only be done in PSERS' Member Self Service portal or by contacting PSERS directly. Changes to your pension cannot be made by an employee in the SDP's Oracle system.

Mandatory Enrollment for Full-Time Employees

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 toward a retirement benefit from the first day of employment.

For More Information

Learn more about SDP pension benefits and PSERS membership options:

Visit SDP Benefits - Pension Information →

Class TE vs Class TF: What's the Difference?

There are two distinct differences between Class TE and Class TF that will impact your career:

Class TE

(Default)

Your 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%

Pension Benefit Multiplier

2.0%

Used to calculate your retirement benefit

Class TF

(Must Elect)

Your Contribution Rate

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

2.5%

Used to calculate your retirement benefit

Understanding the Trade-Off

Class TF requires higher contributions throughout your career but provides a significantly higher retirement benefit. The choice depends on your personal financial situation and retirement goals.

How Your Retirement Benefit is Calculated

Your PSERS retirement benefit is an annual benefit, payable monthly, calculated using a formula based on your years of credited service, your final average salary (last 36 months), and a multiplier that depends on your membership class.

Retirement Benefit Formula

Multiplier × Final Average Salary × Years of Credited Service = Yearly Benefit

Class TE Formula

2.0% × Final Average Salary × Years of Credited Service

Class TF Formula

2.5% × Final Average Salary × Years of Credited Service

Retirement Benefit Examples

Let's compare the retirement benefits for someone who works 35 years with a final average salary of $83,381:

Class TE Example

Lower contributions, lower benefit

Calculation:

2.0% × 35 years = 70% of salary

2.0% × 35 × $83,381

Annual Pension Benefit

$58,367

per year

Class TF Example

Higher contributions, higher benefit

Calculation:

2.5% × 35 years = 87.5% of salary

2.5% × 35 × $83,381

Annual Pension Benefit

$72,958

per year

The Difference

$72,958 - $58,367 = $14,591

Class TF provides a $14,591 higher pension benefit every year in retirement

What Will This Cost Per Paycheck?

Understanding the difference in your take-home pay between Class TE and Class TF is important for making an informed decision. Here's an example based on a starting teacher salary:

Class TE Contribution

Step 1 Bachelor's Degree Annual Salary

$46,766

Calculation

$46,766 × 7.5% ÷ 26 pays

Per Pay Contribution

$134.90

Class TF Contribution

Step 1 Bachelor's Degree Annual Salary

$46,766

Calculation

$46,766 × 10.3% ÷ 26 pays

Per Pay Contribution

$185.26

Contribution Difference Per Pay

$50.36

Class TF costs an additional $50.36 per paycheck at the starting salary level

Vesting Requirements

You must be "vested" to receive the pension benefit. Vested means you are eligible for a monthly retirement benefit after termination of employment.

Vesting Requirements for Class TE and TF

You are vested when you meet ONE of the following:

10 Years of Qualifying Service

At any age

Age 65 or Older

With at least 3 years of service at termination

If You Leave Before Vesting

If you leave employment prior to vesting, you will receive your contributions and interest only. You will not receive any employer contributions or pension benefit.

Service Credit

Service credit is the measure of your time as a PSERS member. You earn service credit for each year you work and contribute to PSERS. Understanding how service credit works is important for planning your retirement.

Full-Time Service

If you work full-time (typically 1,000+ hours per year), you earn one full year of service credit for each school year.

Part-Time Service

Part-time employees earn fractional service credit based on the percentage of full-time hours worked. For example, working 50% time earns 0.5 years of service credit.

Purchasing Service Credit

You may be able to purchase additional service credit for certain types of leave, military service, or previous employment. Contact PSERS for eligibility and cost information.

Leaves of Absence

Unpaid leaves of absence do not count toward service credit unless you make arrangements to purchase that time. Contact HR before taking an extended leave to understand the impact on your retirement.

Additional Factors to Consider

Making the decision between Class TE and Class TF requires careful consideration of your personal financial situation and long-term goals. Here are some important factors to think about:

Could You Invest the Difference?

Could you stay with Class TE and invest on your own the difference between the TF per pay contribution and the TE per pay contribution ($50.36 per paycheck) over your 35-year career?

Absolutely. The question is: Will you do better investing on your own, rather than electing Class TF?

You'd need to speak to a trusted financial advisor to determine which option is best for your situation.

Long-Term vs Short-Term Thinking

Class TF provides significantly higher retirement income but requires higher contributions throughout your career. Consider your budget, career plans, and retirement goals when making this decision.

The Guaranteed Benefit

PSERS is a defined benefit plan, meaning your retirement benefit is guaranteed by the state-based formula regardless of market performance. This security is valuable when planning for retirement.

Purpose of This Information

This informational handout is being presented so that you understand the options available to you. The decision between Class TE and Class TF is personal and should be made after careful consideration of your individual circumstances.

Managing Your PSERS Account

PSERS provides online tools to help you manage your account, estimate your retirement benefit, and plan for your future. Take advantage of these resources to stay informed about your retirement security.

Online Account Access

Create your PSERS online account at www.psers.pa.gov to:

•View your service credit and contributions
•Update beneficiary information
•Use retirement benefit calculators
•Access important forms and documents

Annual Statement

Each year, PSERS sends you an annual statement showing:

•Total service credit earned
•Total contributions made
•Current beneficiary designations
•Estimated retirement benefit

Important Information

Creating Your PSERS Account

Once you receive your enrollment packet from PSERS, you can create your online account at www.psers.pa.gov. Through your account, you can view your service credit, update beneficiaries, and access retirement calculators.

Social Security

PSERS members do not pay into Social Security for their PSERS-covered employment. However, if you have other employment where you pay Social Security taxes, you may be subject to the Windfall Elimination Provision (WEP) or Government Pension Offset (GPO), which could reduce your Social Security benefits.

Tax Considerations

Your PSERS contributions are made with pre-tax dollars, reducing your current taxable income. When you receive retirement benefits, they will be subject to federal income tax (but not Pennsylvania state income tax for PA residents).

Questions About PSERS?

Contact PSERS directly at 1-888-773-7748 or visit www.psers.pa.gov for personalized information about your account.

PFTHW HR can also help with general PSERS questions.

Helpful Resources

Visit the following resources to learn more about PSERS and make an informed decision about your membership class:

PSERS Official Website

Access comprehensive information about PSERS membership, benefits, and retirement planning.

Visit PSERS New Member Page →

PSERS Member Services

Contact PSERS directly with questions about your account, membership class election, or benefits.

Phone: 1-888-773-7748

Website: www.psers.pa.gov

PFTHW Human Resources

Contact PFTHW HR for general PSERS questions and assistance with your enrollment process.

Your HR representative can help answer questions about your PSERS enrollment and provide guidance on the Class TE vs TF decision.

Remember Your 45-Day Deadline

If you wish to elect Class TF, you must submit your election form to PSERS within 45 days of your notification date. This decision is permanent and cannot be changed later.