Selecting a Retirement Plan

Full-Time Faculty and Staff: You have 30 days from the effective date of your appointment to choose your retirement plan. If you do not make your decision within that time period, state regulations require that you automatically be enrolled in SERS. Once you are enrolled in a retirement plan, the enrollment is irrevocable. However, you may enroll in a TIAA supplemental retirement plan at any time.

Regardless of the plan you choose, you are required to contribute a percentage of your income to the retirement plan. All Penn State retirement plan contributions are tax deferred.

Selection of a retirement plan is part of your online benefits enrollment through Workday.

Penn State Alternate Retirement Plan (Administered by TIAA)

This is a defined contribution plan. Retirement income is determined by the amount you contribute (5%), the amount contributed by Penn State (9.29%), and the performance of the investments you choose. Therefore, there is no rule of thumb for calculating, far in advance, the amount of TIAA benefit that you might receive at time of retirement.

All questions regarding the Penn State Alternate Retirement Plan should be directed to TIAA at 1-800-842-2252, Mon through Fri, 8 am - 10pm and Sat from 9 am - 6pm.

State Employees Retirement System (SERS)

As a new SERS member, you have the choice of two hybrid defined benefit pension/defined contribution investment plans, referred to as class A-5 and A-6. You will enter SERS in the class A-5 hybrid plan, with the option to choose the other hybrid plan (A-6) or the straight defined contribution plan within you first 45 days of membership. Failure to communicate a selection within 45 days is an affirmative action to remain in the A-5 classs of service.

SERS Class Options
  Hybrid (Class A5) Alternate Hybrid (Class A6) Defined Contribution
Annual Benefit Accrual Rate 1.25% 1.0% N/A
New Employee Contribution Rate 8.25% 7.5% 7.5%
Current Employee Contribution Rate TOTAL CONTRIBUTIONS SAME AS CURRENT CLASS OF SERVICE
DC Employer Contribution Rate 2.25% 2.0% 3.5%
Vesting Years DB 10/DC 3 DB 10/DC 3 3
Final Average Salary Highest 5 years Highest 5 years N/A
SERS Normal Retirement Age Age 67/3 years of service;
Rule of 97 and 35 eligibility points
Age 67/3 years of service;
Rule of 97 and 35 eligibility points
N/A
Early Retirement Milestone Age 57/25 years of service Age 62/25 years of service N/A
Early Retirement Reduction

If reach milestone:
3% reduction for each year under age 67

OR

Age 62/10 years of service
Actuarial reduction for each year under age 67

OR

10 years of service but NOT age 62
Standard Actuarial reduction from 62-67 plus special 7.375% rate actuarial reduction for each year under 62

If reach milestone:
3% reduction for each year under age 67

OR

Age 62/10 years of service
Actuarial reduction for each year under age 67

OR

10 years of service but NOT age 62
Standard Actuarial reduction from 62-67 plus special 7.375% rate actuarial reduction for each year under 62

N/A

Please Note: Members of University Police are exempt from the classes described above. SERS options available to these employees are as follows:

SERS options for University Police
  Class A3 Option Class A4 Selected Within 45 Days of SERS Membership
Employee Contribution Rate 6.25% 9.3%
Employer Contribution Rate Varies - determined by state legislature Varies - determined by state legislature
Vesting 10 years 10 years
Benefit Formula 2% years of service X average earning for 3 highest years 2.5% X years of service X average earnings for 3 highest years
SERS Normal Retirement Age Full retirement income at age 65 with at least 3 years of credited service, or your age plus years of credited service equal 92 or higher Full retirement income at age 65 with at least 3 years of credited service, or your age plus years of credited service equal 92 or higher
Disability Benefit Earned after 5 years of service Earned after 5 years of service

Additional Resources