Pennsylvania Teacher Benefits and PSERS

Teaching in Pennsylvania? How Your PSERS Benefits Work

If you teach in a Pennsylvania school district, your retirement benefit comes through PSERS, the Public School Employees' Retirement System. Your membership class sets what you pay, how the benefit is figured and when a full pension can start.

Atlas Benefits Advisor explains your options in plain language so you can decide what's right for you.

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Three Classes for Members Since 2019

A new member starts in Class T-G automatically. You then have 90 days to stay put or switch to Class T-H or Class DC, and that choice can't be changed later. PSERS will not extend the deadline. If you joined before July 1, 2019, you are likely in an older class, such as T-D or T-E, with its own rates and retirement ages.

These are the rates in effect through June 30, 2027. The pension share for T-G and T-H can move up or down every three years under a shared risk rule, so the current figures are posted by PSERS.

When a Full Pension Starts

In Class T-G, the pension reaches normal retirement at age 67 with at least 3 years of service. It can also come sooner under the Rule of 97, when your age plus service adds up to 97 and you have at least 35 years. A teacher who is 62 with 35 years would qualify.

Class T-H has the same age test but no Rule of 97. In both classes, a pension that begins earlier is reduced. Class DC has none, so the account can be paid out once you leave school employment.

How the Pension Is Figured

The formula multiplies three things: a rate set by your class, your final average salary and your years of service. For T-G and T-H, that salary is your highest pay, averaged over five separate 12-month periods. The rate is 1.25% in T-G and 1.00% in T-H.

Here is a made-up example, not an estimate or a guarantee. In it, a teacher has a $100,000 final average salary and 30 years of service and retires at normal retirement age.

The investment account would be added to either pension figure, and its value depends on contributions and market results.

Members in T-G also pay a larger share of pay toward the pension than members in T-H. Real benefits will differ from this example, and each class fits different situations.

Benefits From Your School District

Beyond PSERS, your district provides its own workplace benefits. State law gives professional employees 10 days of sick leave a year at full salary, and whatever goes unused keeps adding up where you work now. Many also offer medical, life and disability income insurance, personal days and paid holidays, and some help with tuition.

Coverage like this through a school employer is tied to the job, so it may not continue in the same form if you leave or retire. The details depend on your local contract, and your human resources office is the best place to ask about yours.

If you'd like to know how your life and disability income benefits fit your household, Christopher J. Vargas can go over them with you in a complimentary 10-minute checkup.

Life insurance costs money, you have to qualify for it, and it stays in force only while premiums are paid.

Health Coverage After Retirement

After retirement, PSERS runs a Health Options Program. Eligible retirees can also get Premium Assistance of up to $100 a month toward their own out-of-pocket medical premium, never more than what you actually pay. It doesn't cover a spouse, dependents, or separate dental, vision or prescription plans.

For T-G and T-H, you qualify with 24½ or more eligibility points at any age, at 67 or older with at least 15 points, or while receiving a PSERS disability retirement. The premium must be paid through the Health Options Program or an approved school employer plan.

If You Leave Before Retirement

In T-G and T-H, the defined benefit vests after 10 years of service, or at age 67 with 3 years. If you leave all Pennsylvania school work before vesting, a refund of your pension contributions and interest is the only choice. Nonvested pension contributions stop earning interest once you leave.

A vested member can leave the money in place for a monthly benefit later. A refund can also be requested, but it gives up that future benefit, so it is worth talking through first.

If You Also Have New York Teaching Years

This part applies only if you taught in New York before coming to Pennsylvania. The two states run separate systems. Teachers outside New York City generally belong to NYSTRS, and New York City public school teachers to NYC TRS. Years in one system don't move to the other on their own.

Buying credit in PSERS requires leaving NYSTRS first. With 10 or more years in Tiers 3 to 6, NYSTRS allows that only after you've stopped teaching in New York public schools for good and PSERS confirms at least 5 years of membership in Pennsylvania. Withdrawing gives up your future New York benefit, including any vested death benefit. A vested NYSTRS member who leaves the money on deposit can generally collect a benefit starting at 55, though some inactive Tier 6 members must wait longer.

Before you buy credit or withdraw, it helps to ask both systems how your New York years would be treated. Christopher J. Vargas, LUTCF®, can walk through the questions to bring to each one when you pick a time below.

Helpful Pages Before You Book

Learn how a 403(b) and a 457(b) compare

Learn how a complimentary 10-minute 403(b) checkup works

Open the Educator Benefits Checklist

Open 403(b) at a Glance

Open the Life Insurance Checklist

Ready for Clear, One-on-One Guidance?

Bring your questions about your PSERS class, your years of service, your 403(b) or your life and disability income coverage. The Pension Review is by video. No obligation.