Retirement Options

APSCUF Provides You with Three Retirement Options
If you are new to the State System of Higher Education, there are a few things you should know about the retirement benefits APSCUF has won for the SSHE faculty. Unlike other Commonwealth employees, APSCUF members have a choice as to which of three retirement systems in which they can participate.

At the bargaining table, APSCUF won for SSHE faculty the option of participating in the State Employees Retirement System (SERS), the Public School Employees Retirement System (PSERS) or the Teachers Insurance and Annuity Association-College Retirement Equities Fund (TIAA-CREF). The one that is right for you depends on a number of factors. To summarize briefly, here's how to decide which might be best for you:

If you taught in another state before accepting your post at the SSHE, both SERS and PSERS offer an option which permits you to purchase your out-of-state service time. This is only for public school or public higher education service, not for private school or private university service. Both the PSERS and SERS have options which permit participants to purchase credits for military time, a factor you might take into consideration when making your decision.

Please note that to be eligible for health benefits in retirement you must qualify under one of the following categories: * 25 years of "credited" service at any age; * 10 years of "credited" service at superannuation age (age 60) -- applies to those hired prior to September 1, 1997; * 15 years of "credited" service at superannuation age (age 60) -- applies to those hired on or after September 1, 1997. In addition, "credited" service for these faculty members will only include Commonwealth and/or State System service.

It is also important to remember that if you retire on or after July 1, 2005, you will be assessed the 10% premium co-share for your annuitant health plan.

If you expect to leave the SSHE before vesting occurs, the TIAA-CREF option may be your best bet. TIAA-CREF operates much like a mutual fund. There is no vesting period. All contributions net the contributor shares in TIAA-CREF. The value of these shares fluctuates as does the stock and bond market.

The performance of CREF closely parallels that of Standard and Poors 500 stocks. If you participated in TIAA-CREF prior to coming to the SSHE and were pleased with the performance, you might want to continue. Also, if you intend to leave the SSHE before the five-year vesting period for the two state systems, chances are you'll be able to continue in the TIAA-CREF program at your next job. Due to APSCUF's effort, the TIAA-CREF members now have the same benefit that SERS members acquired in December of 1982 (i.e., the tax sheltering of the individual's retirement contribution for federal income tax purposes only.)

The major advantage of the TIAA-CREF option is that there are no penalties if you leave the SSHE. Under the state systems, if you leave before being vested, you lose the employer contributions to the retirement fund. With the TIAA-CREF option, the employer contributions have purchased TIAA-CREF shares in your name which are yours forever, regardless of when you leave state employment.

You can examine the actuarial tables for the SERS and PSERS programs to get a general idea of what your retirement income will be. The TIAA-CREF program, since it operates like a mutual fund, has no such tables for you to examine.

The above is only a brief summary of some of the things you should consider when making your decision. This is provided solely to let you know you do have options and to help you make a reasoned decision. You should talk to your university personnel officer about the retirement programs.

For more information about retirement, contact:

Deb Wynn, APSCUF,
P.O. Box 11995, Harrisburg, PA 17108
1-800-932-0587, extension 3026

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