NOTICES
PUBLIC SCHOOL EMPLOYEES' RETIREMENT BOARD
Actuarial Tables
[48 Pa.B. 3929]
[Saturday, June 30, 2018]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 Board adopted the following actuarial tables at its June 10, 2016, meeting. The actuarial tables are effective July 1, 2018. Accordingly, these actuarial tables are being published as required by Act 77.
GLEN R. GRELL,
Executive DirectorThe following material provides general information and actuarial tables for computing an estimated regular (nondisability) retirement benefit from PSERS. Also, included as Table 6 is the Present Value of $1 Annuity Using Disability Mortality table.
General Information A vestee or any other eligible member upon termination of school service who has not withdrawn his accumulated deductions may apply for and elect to receive either a maximum single life annuity (MSLA) or a reduced annuity (Reduced MSLA) certified by the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 or Class T-F 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 pointsA 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 final average salary as the highest compensation received as an active member for any three 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. This period is frequently the most recent three fiscal years.
Calculating the MSLA Calculating all forms of a (nondisability) 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.
*Except for superannuated members and members who have attained age 55 and have 25 or more service credits, the Early Retirement Factor can be found in Table 3 Early Retirement Factor—Unisex. The Early Retirement Factor for members who have attained superannuation age is 1.0, which results in no reduction. The reduction for those 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.
Calculating the Present Value 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 1 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 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 present value 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 of 2017, the previous subparagraph did not apply to a Class T-E or Class T-F member. Act 5 of 2017 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 present values, 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.
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 / Present Value of
$1 Annuity**See Table 1 Present Value of $1 Annuity—Unisex for Class T-C and Class T-D members. See Table 1A Present Value of $1 Annuity—Unisex 7.25% for Class T-E and Class T-F 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 Reduction Other forms of Option 4 must also be actuarial 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 Table 2, 4 or 5 as appropriate, based on the Option.
Actuarial Tables for Regular (Non-Disability) Retirements
(Adopted June 10, 2016; Effective July 1, 2018)
Table 1
Present Value of $1 Annuity—Unisex
Age Unisex Age Unisex Age Unisex 51 18.069 81 7.946 22 22.981 52 17.825 82 7.560 23 22.885 53 17.574 83 7.179 24 22.785 54 17.317 84 6.806 25 22.681 55 17.051 85 6.440 26 22.574 56 16.780 86 6.085 27 22.461 57 16.500 87 5.741 28 22.345 58 16.214 88 5.409 29 22.224 59 15.920 89 5.090 30 22.098 60 15.619 90 4.787 31 21.968 61 15.311 91 4.502 32 21.832 62 14.995 92 4.233 33 21.692 63 14.671 93 3.981 34 21.546 64 14.340 94 3.744 35 21.394 65 14.003 95 3.519 36 21.237 66 13.657 96 3.305 37 21.073 67 13.305 97 3.107 38 20.903 68 12.947 98 2.920 39 20.727 69 12.583 99 2.745 40 20.544 70 12.213 100 2.584 41 20.354 71 11.839 101 2.436 42 20.158 72 11.459 102 2.301 43 19.953 73 11.076 103 2.177 44 19.741 74 10.690 104 2.063 45 19.522 75 10.300 105 1.958 46 19.296 76 9.909 106 1.862 47 19.061 77 9.516 107 1.781 48 18.818 78 9.122 108 1.696 49 18.567 79 8.728 109 1.598 50 18.307 80 8.336 110 1.525
Table 1A
Present Value of $1 Annuity—Unisex @ 7.25%
Special Option 4 Lump Sum Factors
For Class T-E and Class T-F Members
Age Unisex Age Unisex Age Unisex 51 12.414 81 6.695 22 13.991 52 12.315 82 6.415 23 13.972 53 12.211 83 6.134 24 13.952 54 12.102 84 5.856 25 13.930 55 11.987 85 5.579 26 13.907 56 11.867 86 5.306 27 13.882 57 11.741 87 5.038 28 13.855 58 11.610 88 4.777 29 13.827 59 11.472 89 4.523 30 13.796 60 11.328 90 4.278 31 13.764 61 11.177 91 4.046 32 13.729 62 11.019 92 3.825 33 13.692 63 10.854 93 3.616 34 13.653 64 10.682 94 3.417 35 13.611 65 10.502 95 3.228 36 13.566 66 10.315 96 3.045 37 13.517 67 10.121 97 2.875 38 13.466 68 9.919 98 2.714 39 13.411 69 9.709 99 2.560 40 13.352 70 9.492 100 2.419 41 13.289 71 9.268 101 2.289 42 13.223 72 9.037 102 2.169 43 13.151 73 8.800 103 2.059 44 13.075 74 8.555 104 1.956 45 12.995 75 8.305 105 1.861 46 12.909 76 8.049 106 1.775 47 12.818 77 7.787 107 1.701 48 12.721 78 7.520 108 1.624 49 12.618 79 7.248 109 1.533 50 12.509 80 6.973 110 1.465
Table 2
Service Option 1 Reducing Factors—Unisex
Age Unisex Age Unisex Age Unisex 51 0.9686 81 0.7944 22 0.9978 52 0.9668 82 0.7816 23 0.9978 53 0.9648 83 0.7680 24 0.9977 54 0.9627 84 0.7534 25 0.9976 55 0.9604 85 0.7390 26 0.9975 56 0.9581 86 0.7243 27 0.9974 57 0.9554 87 0.7082 28 0.9973 58 0.9527 88 0.6927 29 0.9971 59 0.9497 89 0.6781 30 0.9969 60 0.9466 90 0.6614 31 0.9967 61 0.9432 91 0.6460 32 0.9963 62 0.9395 92 0.6321 33 0.9960 63 0.9356 93 0.6189 34 0.9956 64 0.9313 94 0.6043 35 0.9950 65 0.9267 95 0.5907 36 0.9944 66 0.9218 96 0.5781 37 0.9937 67 0.9167 97 0.5670 38 0.9929 68 0.9109 98 0.5526 39 0.9920 69 0.9048 99 0.5393 40 0.9910 70 0.8985 100 0.5277 41 0.9898 71 0.8916 101 0.5178 42 0.9884 72 0.8842 102 0.5101 43 0.9869 73 0.8766 103 0.4986 44 0.9852 74 0.8683 104 0.4879 45 0.9833 75 0.8594 105 0.4791 46 0.9812 76 0.8504 106 0.4727 47 0.9789 77 0.8405 107 0.4694 48 0.9764 78 0.8297 108 0.4633 49 0.9735 79 0.8189 109 0.4525 50 0.9704 80 0.8071 110 0.4408
Table 6
Present Value of $1 Annuity Using Disability Mortality
Age Unisex Age Unisex Age Unisex 51 14.925 81 6.513 22 20.440 52 14.707 82 6.222 23 20.303 53 14.488 83 5.938 24 20.164 54 14.267 84 5.660 25 20.020 55 14.043 85 5.391 26 19.869 56 13.816 86 5.130 27 19.711 57 13.585 87 4.878 28 19.548 58 13.348 88 4.635 29 19.380 59 13.106 89 4.401 30 19.207 60 12.857 90 4.175 31 19.030 61 12.600 91 3.960 32 18.851 62 12.335 92 3.753 33 18.668 63 12.062 93 3.557 34 18.482 64 11.781 94 3.369 35 18.292 65 11.492 95 3.189 36 18.099 66 11.197 96 3.014 37 17.900 67 10.895 97 2.849 38 17.697 68 10.587 98 2.695 39 17.490 69 10.276 99 2.549 40 17.278 70 9.961 100 2.413 41 17.064 71 9.643 101 2.285 42 16.847 72 9.324 102 2.166 43 16.629 73 9.004 103 2.055 44 16.412 74 8.684 104 1.951 45 16.198 75 8.365 105 1.855 46 15.990 76 8.047 106 1.766 47 15.780 77 7.732 107 1.688 48 15.569 78 7.421 108 1.617 49 15.356 79 7.113 109 1.556 50 15.141 80 6.811 110 1.504
[Pa.B. Doc. No. 18-1029. Filed for public inspection June 29, 2018, 9:00 a.m.]
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