NOTICES
PUBLIC SCHOOL EMPLOYEES' RETIREMENT BOARD
Actuarial Tables
[52 Pa.B. 3655]
[Saturday, June 25, 2022]The act of December 20, 1995 (P.L. 689, No. 77) (Act 77), amended 24 Pa.C.S. § 8502(h) and (j) (relating to administrative duties of board) to require the Public School Employees' Retirement Board (Board) to publish in the Pennsylvania Bulletin the actuarial tables used by the Public School Employees' Retirement System (PSERS) in calculating annuities and other benefits. The act of June 12, 2017 (P.L. 11, No. 5) (Act 5) added 24 Pa.C.S. § 8535.1 (relating to payments to school entities by Commonwealth commencing with the 2019-2020 school year), which made changes to PSERS and created new membership classes, T-G, T-H and DC. Accordingly, this information has been updated to include the new membership classes and is being published as required by Act 77. The tables published herein are effective as of July 1, 2022.
TERRILL J. SANCHEZ,
Interim Executive DirectorThe following material provides general information and actuarial tables for computing an estimated regular (non-disability) retirement benefit from PSERS Defined Benefit (DB) Plan. Also, included as Table 6 is the Present Value of $1 Annuity Using Disability Mortality table for the DB plan.
General Information about PSERS DB Plan A vestee or any other eligible member upon termination of school service who has not withdrawn his accumulated deductions may apply for and elect to receive either a maximum single life annuity (MSLA) or a reduced annuity (Reduced MSLA) certified by the actuary to be actuarially equivalent to the maximum single life annuity and in accordance with one of the options under the Optional Forms of an Annuity section of this document. Optional forms of an annuity are considered to be ''actuarially equivalent'' if they have the same present value (PV) as the PV of the maximum single life annuity. A Class T-E, Class T-F, T-G and T-H member may not receive an annual benefit, calculated as of the effective date of retirement, greater than the member's final average salary.
A vestee who retires on or after attaining superannuation age is entitled to a ''normal'' annuity, also known as a superannuation or full annuity, where no age or service-related adjustments (for retiring early) are applied to the MSLA.
Superannuation or normal retirement age is defined by Membership Class as:
Membership Class Age T-A 62 or any age upon accrual of 35 eligibility points (service credits) T-B 62 T-C and T-D 62 provided the member has at least 1 eligibility point or age 60 provided the member has at least 30 eligibility points (service
credits), or any age upon accrual
of 35 eligibility pointsT-E and T-F 65 with accrual of at least three eligibility points or a combination
of age and eligibility points
totaling 92, provided the member has accrued at least 35 eligibility pointsT-G* 67 with accrual of at least 3 eligibility points, or a combination of age and eligibility points
totaling 97, provided the member has accrued at least 35 eligibility pointsT-H* 67 with accrual of at least 3 eligibility points DC* No DB (Only a distribution from their DC account upon termination of service) *Class T-G and T-H members have both a DB and a defined contribution component to their retirement benefit. Members in these classes will receive a guaranteed benefit from the DB plan, if vested, and a distribution from their DC account. Class DC participants do not have a DB benefit.
A vestee who retires prior to attaining superannuation age is entitled to an ''early'' or ''withdrawal'' annuity, where the MSLA is reduced due to retiring early. This early retirement reduction is based on how far away from superannuation age the member is on the effective date of retirement.
A key component in the computation of a PSERS' retirement benefit is the final average salary (FAS). PSERS' retirement code defines FAS for Class T-C, T-D, T-E and T-F members as the highest average compensation received as an active member for any three nonoverlapping periods of 12 consecutive months and for Class T-G and T-H members as the highest average compensation received as an active member for any five nonoverlapping periods of 12 consecutive months. Compensation for part-time service is annualized on the basis of the fractional portion of the school year for which credit is received.
Calculating the MSLA Calculating all forms of a (non-disability) retirement benefit begins with calculating the MSLA.
For Class T-C members, the MSLA is calculated as:
MSLA = 2.0% × Total Class T-C
Service Credits× FAS × Early Retirement Factor* For Class T-D members, the MSLA is calculated as:
MSLA = 2.0% × Total Class T-C
Service Credits× FAS × Early Retirement Factor* + 2.5% × Total Class T-D
Service Credits× FAS × Early Retirement Factor* For Class T-E members, the MSLA is calculated as:
MSLA = 2.0% × Total Class T-E
Service Credits× FAS × Early Retirement Factor* MSLA is limited to 100% of FAS.
For Class T-F members, the MSLA is calculated as:
MSLA = 2.5% × Total Class T-F Service Credits × FAS × Early Retirement Factor* MSLA is limited to 100% of FAS.
For Class T-G members, the MSLA is calculated as:
MSLA = 1.25% × Total Class T-G Service Credits × FAS × Early Retirement Factor* MSLA is limited to 100% of FAS.
For Class T-H members, the MSLA is calculated as:
MSLA = 1.00% × Total Class T-H Service Credits × FAS × Early Retirement Factor* MSLA is limited to 100% of FAS.
*Early Retirement Factors for:
Class T-C, T-D, T-E and T-F can be found in Table 3a Early Retirement Factor—Unisex, except:
• The Early Retirement Factor for members who have attained superannuation age is 1.0, which results in no reduction.
• The reduction for Class T-C, T-D, T-E and T-F members who have attained age 55 and have 25 or more service credits is equal to 1/4% multiplied by the number of months, including a fraction of a month as a full month, by which the effective date of retirement precedes superannuation age.
Class T-G and T-H:
• If a member has attained superannuation age, the Early Retirement Factor is 1.0, which results in no reduction.
• If the member has at least 25 years of credited service, use Table 3a Early Retirement Factor—Unisex:
o If a Class T-G member is retiring before age 57 with at least 25 years of credited service but less than 35 years of credited service, the reduction factor is based on the 4.0% statutory interest rate table and a superannuation age of 67.
o If a Class T-H member is retiring before age 55 with at least 25 years of credited service but less than 35 years of credited service, the reduction factor is based on the 4.0% statutory interest rate table and a superannuation age of 67.
o If a Class T-G member is retiring before age 57 and with at least 35 years of credited service but the sum of the member's age and credited service is less than 97, the reduction factor is based on the 4.0% statutory interest rate table and a superannuation age equal to the member's age when added to the member's credited service equals 97.
o Special Early Retirement—The reduction for Class T-G members who terminate service after attaining age 57 with at least 25 years of credited service but less than 35 years of credited service and for Class T-H members who terminate service after attaining age 55 with at least 25 years of credited service but less than 35 years of credited service is equal to 1/4% multiplied by the number of months, including a fraction of a month as a full month, by which the effective date of retirement precedes superannuation age.
• If the member has less than 25 years of credited service, use Table 3b Early Retirement Factor—Unisex: If a Class T-G or T-H member is retiring with less than 25 years of credited service, the reduction factor from age 67 to 62 is based on the statutory interest rate of 4.0% and the additional reduction from age 62 to the commencement date is based on the valuation interest rate, currently at 7.0%.
Calculating the PV of the MSLA As previously noted in the general information section, optional forms of an annuity are considered to be ''actuarially equivalent'' to the MSLA if they have the same PV as the PV of the MSLA.
The PV of the MSLA is calculated as:
PV of the MSLA = MSLA × PV of $1 Annuity
on the Effective Date of
Retirement**See Table 1a Present Value of $1 Annuity—Unisex
Optional Forms of an Annuity Acceptable optional forms of an annuity are:
Option 1.—A life annuity to the member with a guaranteed total payment equal to the PV of the MSLA on the effective date of retirement with the provision that, if, at his death, he has received less than such PV, the unpaid balance shall be payable to his beneficiary. The Option 1 Annuity is made to be actuarially equivalent to the MSLA by applying an Option 1 Reducing Factor, which is based on the age of the member as of the effective date of retirement, to the MSLA.
The Option 1 annuity is calculated as:
Option 1 Annuity = MSLA × Option 1
Reducing Factor**See Table 2 Service Option 1 Reducing Factors—Unisex
Option 2.—A joint and survivor annuity payable during the lifetime of the member with the full amount of such annuity payable thereafter to his designated survivor annuitant, if living at his death. The Option 2 Annuity is made to be actuarially equivalent to the MSLA by applying an Option 2 Reducing Factor, which is based on the age of the member and the age of the designated survivor annuitant as of the effective date of retirement, to the MSLA.
An Option 2 annuity is calculated as:
Option 2 Annuity = MSLA × Option 2
Reducing Factor**See Table 4 Factors for Obtaining Annuities and Pensions Under Option 2—Unisex
Option 3.—A joint and fifty percent (50%) survivor annuity payable during the lifetime of the member with one-half of such annuity payable thereafter to his designated survivor annuitant, if living at his death. The Option 3 Annuity is made to be actuarially equivalent to the MSLA by applying an Option 3 Reducing Factor, which is based on the age of the member and the age of the designated survivor annuitant as of the effective date of retirement, to the MSLA.
An Option 3 annuity is calculated as:
Option 3 Annuity = MSLA × Option 3
Reducing Factor**See Table 5 Factors for Obtaining Annuities and Pensions Under Option 3—Unisex
Option 4.—Some other benefit certified by the actuary to be actuarially equivalent to the MSLA, subject to the following restrictions:
(i) Any annuity shall be payable without reduction during the lifetime of the member.
(ii) The sum of all annuities payable to the designated survivor annuitants shall not be greater than one and one-half times the annuity payable to the member.
(iii) A portion of the benefit may be payable as a lump sum, except that such lump sum payment shall not exceed an amount equal to the accumulated deductions standing to the credit of the member. The balance of the PV of the maximum single life annuity shall be paid in the form of an annuity with a guaranteed total payment, a single life annuity, or a joint and survivor annuity or any combination thereof but subject to the restrictions of subparagraphs (i) and (ii) of this paragraph. This option is often referred to as Special Option 4 Partial Lump Sum Withdrawal.
Prior to Act 5, the previously listed subparagraph did not apply to a Class T-E or Class T-F member. Act 5 was passed in June of 2017. Under this legislation, effective immediately, Class T-E and Class T-F members are eligible to elect a ''cost-neutral'' Special Option 4 Lump Sum distribution of all or a portion of the member's accumulated contributions at retirement. The term ''cost-neutral,'' as applied to any lump sum withdrawal attributable to contributions credited to the member's savings account of Class T-E or Class T-F members, together with statutory interest thereon, shall mean equal PVs, computed on the basis of the interest rate and such mortality and other tables as adopted by the Board in effect on the effective date of retirement of the member. Class T-G and T-H are also eligible to elect a ''cost-neutral'' Special Option 4 Lump Sum distribution of all or a portion of the member's accumulated contributions at retirement.
The most common form of Option 4 is that described in subparagraph (iii). The reduction to the MSLA on account of a Partial Lump Sum Withdrawal is calculated as:
Special Option 4 Partial Lump Sum Withdrawal Reduction = Partial Lump Sum Payment Amount / PV of $1 Annuity* *See Table 1a Present Value of $1 Annuity—Unisex for Class T-C and T-D members. See Table 1b Present Value of $1 Annuity—Unisex 7.00% for Class T-E, T-F, T-G and T-H members.
The Special Option 4 Partial Lump Sum Withdrawal Annuity is calculated as:
Special Option 4 Lump Sum Withdrawal Annuity = MSLA − Special
Option 4
Partial Lump Sum Withdrawal ReductionOther forms of Option 4 must also be actuarially equivalent to the MSLA and are calculated by PSERS' actuary.
Combining Optional Form 1, 2 or 3 of an Annuity with the Special Option 4 Partial Lump Sum Withdrawal When combining Optional Form 1, 2 or 3 of an Annuity with the Special Option 4 Partial Lump Sum Withdrawal, the annuity is calculated as:
Annuity = Special Option 4 Lump Sum Withdrawal Annuity × Appropriate
Option (1, 2 or 3) Reducing Factor**See Tables 2, 4 or 5, as appropriate, based on the Option.
Actuarial Tables for Regular (Non-Disability) Retirements
(Adopted August 6, 2021; Effective July 1, 2022)
Table 1a
Present Value of $1 Annuity
Unisex at 4.00%
Age Unisex Age Unisex Age Unisex 41 20.782 76 10.283 42 20.604 77 9.859 43 20.420 78 9.434 44 20.228 79 9.009 45 20.029 80 8.587 46 19.822 81 8.167 47 19.608 82 7.752 48 19.386 83 7.344 49 19.155 84 6.943 50 18.917 85 6.552 51 18.682 86 6.172 52 18.439 87 5.805 18 23.501 53 18.188 88 5.453 19 23.426 54 17.930 89 5.116 20 23.348 55 17.663 90 4.796 21 23.267 56 17.394 91 4.494 22 23.182 57 17.118 92 4.211 23 23.093 58 16.834 93 3.945 24 23.000 59 16.542 94 3.696 25 22.904 60 16.242 95 3.463 26 22.804 61 15.933 96 3.244 27 22.700 62 15.616 97 3.040 28 22.592 63 15.289 98 2.852 29 22.480 64 14.954 99 2.679 30 22.365 65 14.609 100 2.519 31 22.245 66 14.255 101 2.373 32 22.121 67 13.892 102 2.238 33 21.993 68 13.519 103 2.116 34 21.860 69 13.138 104 2.006 35 21.722 70 12.749 105 1.905 36 21.580 71 12.352 106 1.815 37 21.432 72 11.949 107 1.735 38 21.278 73 11.539 108 1.664 39 21.119 74 11.124 109 1.603 40 20.954 75 10.705 110 1.555
Table 1b
Present Value of $1 Annuity
Unisex at 7.00%
Age Unisex Age Unisex Age Unisex 41 13.835 76 8.447 42 13.775 77 8.158 43 13.712 78 7.863 44 13.645 79 7.563 45 13.573 80 7.260 46 13.497 81 6.954 47 13.415 82 6.647 48 13.329 83 6.340 49 13.237 84 6.034 50 13.139 85 5.732 51 13.044 86 5.435 52 12.943 87 5.144 18 14.546 53 12.837 88 4.861 19 14.532 54 12.724 89 4.587 20 14.517 55 12.606 90 4.325 21 14.501 56 12.486 91 4.075 22 14.484 57 12.360 92 3.837 23 14.466 58 12.228 93 3.613 24 14.446 59 12.089 94 3.401 25 14.424 60 11.944 95 3.201 26 14.401 61 11.791 96 3.011 27 14.377 62 11.630 97 2.834 28 14.351 63 11.462 98 2.669 29 14.324 64 11.285 99 2.516 30 14.295 65 11.099 100 2.374 31 14.264 66 10.903 101 2.243 32 14.232 67 10.699 102 2.122 33 14.197 68 10.485 103 2.012 34 14.161 69 10.261 104 1.912 35 14.122 70 10.028 105 1.820 36 14.081 71 9.786 106 1.738 37 14.038 72 9.535 107 1.664 38 13.992 73 9.275 108 1.598 39 13.943 74 9.006 109 1.542 40 13.890 75 8.730 110 1.497
Table 2
Service Option 1 Reducing Factors
Unisex at 4.00%
Age Unisex Age Unisex Age Unisex 41 0.9922 76 0.8699 42 0.9915 77 0.8596 43 0.9906 78 0.8480 44 0.9897 79 0.8360 45 0.9885 80 0.8237 46 0.9873 81 0.8098 47 0.9859 82 0.7959 48 0.9844 83 0.7815 49 0.9827 84 0.7656 50 0.9808 85 0.7500 51 0.9793 86 0.7342 52 0.9777 87 0.7169 18 0.9982 53 0.9760 88 0.7003 19 0.9981 54 0.9741 89 0.6845 20 0.9981 55 0.9721 90 0.6668 21 0.9980 56 0.9702 91 0.6503 22 0.9979 57 0.9682 92 0.6354 23 0.9978 58 0.9662 93 0.6200 24 0.9977 59 0.9639 94 0.6041 25 0.9975 60 0.9614 95 0.5898 26 0.9974 61 0.9588 96 0.5769 27 0.9972 62 0.9559 97 0.5633 28 0.9970 63 0.9528 98 0.5488 29 0.9968 64 0.9493 99 0.5358 30 0.9966 65 0.9456 100 0.5246 31 0.9963 66 0.9412 101 0.5153 32 0.9961 67 0.9366 102 0.5050 33 0.9958 68 0.9316 103 0.4931 34 0.9955 69 0.9258 104 0.4827 35 0.9952 70 0.9196 105 0.4736 36 0.9949 71 0.9131 106 0.4658 37 0.9945 72 0.9056 107 0.4588 38 0.9940 73 0.8976 108 0.4521 39 0.9935 74 0.8893 109 0.4454 40 0.9929 75 0.8798 110 0.4390
Table 3b
Early Retirement Factors—4% from age 67 to 62 and
7.00% for ages prior to age 62
Age Unisex Age Unisex 18 0.027798 43 0.161231 19 0.029778 44 0.173464 20 0.031901 45 0.186696 21 0.034179 46 0.201017 22 0.036621 47 0.216531 23 0.039241 48 0.233351 24 0.042053 49 0.251604 25 0.045071 50 0.271432 26 0.048310 51 0.292987 27 0.051789 52 0.316435 28 0.055524 53 0.341972 29 0.059537 54 0.369815 30 0.063848 55 0.400209 31 0.068481 56 0.433427 32 0.073462 57 0.469773 33 0.078819 58 0.509597 34 0.084580 59 0.553298 35 0.090780 60 0.601332 36 0.097454 61 0.654221 37 0.104641 62 0.712564 38 0.112383 63 0.760208 39 0.120728 64 0.812187 40 0.129726 65 0.869041 41 0.139433 66 0.931401 42 0.149912 67 1.000000
Table 6
Present Value of $1 Annuity
Disability Mortality—Unisex at 4.00%
Age Unisex Age Unisex Age Unisex 41 16.927 76 8.507 42 16.727 77 8.175 43 16.524 78 7.845 44 16.318 79 7.517 45 16.109 80 7.194 46 15.898 81 6.875 47 15.686 82 6.564 48 15.474 83 6.260 49 15.263 84 5.966 50 15.056 85 5.682 51 14.853 86 5.409 52 14.648 87 5.148 18 20.875 53 14.444 88 4.897 19 20.757 54 14.240 89 4.655 20 20.634 55 14.036 90 4.422 21 20.504 56 13.834 91 4.199 22 20.364 57 13.632 92 3.983 23 20.214 58 13.429 93 3.775 24 20.054 59 13.223 94 3.572 25 19.884 60 13.012 95 3.373 26 19.708 61 12.796 96 3.179 27 19.530 62 12.573 97 2.992 28 19.350 63 12.341 98 2.814 29 19.168 64 12.100 99 2.646 30 18.986 65 11.848 100 2.489 31 18.803 66 11.586 101 2.344 32 18.620 67 11.314 102 2.211 33 18.436 68 11.032 103 2.090 34 18.252 69 10.740 104 1.980 35 18.068 70 10.439 105 1.880 36 17.883 71 10.130 106 1.791 37 17.696 72 9.815 107 1.711 38 17.507 73 9.493 108 1.641 39 17.317 74 9.167 109 1.581 40 17.123 75 8.838 110 1.533
[Pa.B. Doc. No. 22-967. Filed for public inspection June 24, 2022, 9:00 a.m.]
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