PA PSERS Membership Classes: T-C, T-D, T-E, T-F, T-G, T-H Compared

Why PSERS has six classes

Pennsylvania rewrote its school pension rules three times — in 2001, 2011, and 2017 (effective 2019). Each rewrite created a new class and left existing members where they were. Your class is on your PSERS Statement of Account, and for most members it was decided automatically by your start date.

Two windows gave members a choice. People who started between July 2001 and June 2011 could elect the richer Class T-D. People starting July 2019 or later are placed in Class T-G by default but can elect Class T-H or an all-defined-contribution option within a set number of days. Those elections are permanent.

The classes, side by side

"Multiplier" is the percent of your final average salary you earn per year of service. "Shared risk" means your contribution rate can rise (or fall) by a few points depending on whether the fund hits its investment target — it is a way of sharing market risk between members and taxpayers.

T-C and T-D are straightforward pensions. T-E and T-F are pensions with shared-risk contributions and a longer 10-year vesting requirement. T-G and T-H split your benefit: a reduced pension (1.25% or 1.0%) plus a defined-contribution account where you and PSERS both contribute and the balance rises or falls with the markets.

Final average salary is not the same for every class

For Classes T-C, T-D, T-E, and T-F, your final average salary is the average of your three highest school years of earnings. For Classes T-G and T-H, it is the average of your five highest years.

Five years instead of three usually lowers the average, because it pulls in earlier, lower-paid years. It is one more way the 2019 hybrid classes are leaner than the classes before them — on top of the smaller multiplier.

What this means depending on your class

If you are T-C or T-D, you have a comparatively rich pure pension. The main planning questions are timing and the payment option you choose at retirement.

If you are T-E or T-F, watch the shared-risk rate — it can add to your contributions in years the fund underperforms — and remember that leaving before 10 years means no pension at all (you would only get your contributions back).

If you are T-G or T-H, you have two things to manage: a modest pension and an investment account. The DC account is real money that is yours once vested, but it carries market risk the older classes do not. Treat it like a 401(k): check the investment mix, and do not count on a fixed return.

• Find your class on your PSERS Statement of Account.
• If you are T-E/T-F, learn your current shared-risk contribution rate.
• If you are T-G/T-H, review your DC account investments at least yearly.
• Confirm whether your class uses a 3-year or 5-year salary average.

If you have a class election decision to make

New members since July 2019 are placed in Class T-G and have a limited window to elect Class T-H or an all-defined-contribution option instead. T-G has a larger pension multiplier (1.25% vs 1.0%) and higher combined contributions; T-H trades a smaller pension for a larger DC contribution and lower required payments.

Model both with the same salary and career assumptions before the window closes. The election is irrevocable, and the right answer depends on how long you expect to stay in Pennsylvania public education and your tolerance for market risk in the DC portion.