Highlights of PFRS Benefits
The PFRS retirement plans and disability and death benefits for Tier 5 members are the same as the current Article 11 (Tier 2) benefits with the following exceptions:
- Most members will contribute 3 percent of their salary for all their years of public service. There will be some exceptions, for example members enrolled in retirement plans limiting the amount of creditable service they may accrue will not be required to contribute once they reach the maximum amount of service allowed by their plan.
- Tier 5 PFRS mandatory contributions are not covered under Internal Revenue Code Section 414(h) and are taxable in the year they are earned.
Members must have ten years of service credit to be vested and eligible for retirement benefits.
- Overtime pay in excess of 15 percent of a member’s regular annual wages is not included in the definition of wages. Employers should not report to the Retirement System any overtime pay in excess of this cap as it cannot be used in a member’s final average salary calculation.
Electing Tier 5 (Article 22) Benefits
- In addition to benefit changes, Article 22 allowed PFRS members who joined on or after July 1, 2009 to opt into Tier 5. These PFRS members had 120 days from January 9, 2010 to choose to be covered under Article 22. They were required to file an election to choose Article 22 benefits or retain their current coverage under Article 11 or Article 14. The deadline to file was May 9, 2010.