mother-daughter-laptopEligibility and Calculations

Eligibility for PSRS retirement is based on a combination of your years of service and age. You can be eligible for normal (full) benefits, early (reduced) benefits, or delayed benefits with a Partial Lump Sum Option (PLSO).

Normal benefits are calculated with a higher benefit factor than are early retirement options, making those benefits larger. PLSO benefits include a lump-sum payment at retirement with reduced monthly benefits.

If you are unsure of your eligibility or years of service, you can log in to Web Member Services to view your membership information. You can also log in to Web Member Services and use our Benefit Estimator to get personalized benefit estimates quickly and easily using your specific membership information.

Get your personalized Benefit Estimate »

Types of Service Retirement Benefits

  • Normal (Full)

    Normal, or full, benefits are unreduced benefits for members who are eligible based on their age and years of service.

    Eligibility

    You are eligible for normal (full) retirement benefits at:

    • Age 60 with at least five years of service
    • Any age with at least 30 years of service
    • Rule of 80 - when the sum of your age plus your years of service equals 80 or more

    Benefit Calculation

    Benefit Formula 
    Benefit Formula Components
    • Benefit Factors are set by law.
    • If you have less than 32 years of service at retirement, a 2.5% benefit factor applies.
    • If you have 32 or more years of service at retirement, a 2.55% benefit factor applies. 
    • Final Average Salary is a monthly average of your three highest consecutive years of PSRS-covered salary (including employer-paid health, dental and vision insurance premiums). 
    • Years of Service includes the number of years of service you have earned, reinstated and purchased.
    • The Single Life Monthly Benefit is the highest lifetime monthly benefit. It does not provide any monthly payments for your beneficiaries after your death. Learn more about the Single Life Monthly Benefit.
  • 25-and-Out

    Early retirement benefits under the 25-and-Out provision allow you to retire early with reduced lifetime retirement benefits. You must have at least 25 years of service to qualify. 

    Eligibility

    You are eligible for early retirement benefits calculated with the 25-and-Out formula if you:

    • Are under age 55 with at least 25 but fewer than 30 years of service
    • Do not qualify for the Rule of 80 (when your age plus your years of service equals 80 or more)

    Benefit Calculation

    Benefit Formula 

    Benefit Formula Components

    • Benefit Factors are set by law. For 25-and-Out early retirement, the benefit factor corresponds to your years of service at retirement, and ranges from 2.2% to 2.4%. 
    • Final Average Salary is a monthly average of your three highest consecutive years of PSRS-covered salary (including employer-paid health, dental and vision insurance premiums).
    • Years of Service includes the number of years of service you have earned, reinstated and purchased with PSRS.
    • The Single Life Monthly Benefit is the highest lifetime monthly benefit. It does not provide any monthly payments for your beneficiaries after your death. Learn more »
  • Age-Reduced

    Early retirement benefits under the Age-Reduced provision allow you to retire early with reduced lifetime retirement benefits. A reduction factor is applied based on your age at retirement. This means Age-Reduced benefits vary based on your age at retirement, so the younger you are, the more your benefits are reduced. 

    Eligibility

    You are eligible for Age-Reduced early retirement benefits if you:

    • Are age 55 with at least five years of service
    • Do not qualify for the Rule of 80 (when your age plus your years of service equals 80 or more)

    Benefit Calculation

    Age-Reduced-Benefit-Formula 
     

    Benefit Formula Components

    • The Benefit Factor is set by law. For Age-Reduced early retirement, the benefit factor is 2.5%.
    • Final Average Salary is a monthly average of your three highest consecutive years of PSRS-covered salary (including employer-paid health, dental and vision insurance premiums). 
    • Years of Service includes the number of years of service you have earned, reinstated or purchased with PSRS.
    • The Age-Reduction Factor is based on your age in years and months, and is subject to change when actuarial assumptions change. 
    • The Single Life Monthly Benefit is the highest lifetime monthly benefit. It does not provide any monthly payments for your beneficiaries after your death. Learn more »
  • PLSO

    If you work three years past normal retirement, you can choose a one-time, Partial Lump Sum Option (PLSO) payment at retirement with reduced lifetime benefits. The reduction is based on the amount of the payment and your age at retirement.

    Most, or all, of a PLSO payment is considered taxable income by the IRS. PSRS is required by the IRS to withhold 20% for federal taxes. You may defer the tax liability by rolling the PLSO payment to a qualified retirement account. Learn more about PLSO Tax Liability » 

    Eligibility

    You are eligible for PLSO if you:

    • Are at least age 63 with eight or more years of service
    • Have 33 or more years of service
    • Qualify for Rule of 86 (when your age plus your years of service equals 86 or more)

    Benefit Calculation

    You can choose a lump-sum payment equal to 12, 24 or 36 times your Single Life benefit (one, two or three years' worth of monthly benefits).

    One-time, lump-sum payment at retirement:
    PLSO-Benefit-Formula_lump-sum     

    Your lifetime monthly benefit amount is reduced to offset the PLSO payment you receive at retirement.

    PLSO-reduced monthly benefits:

    PLSO-Monthly-Benefit-Formula

    PLSO Reduction Factors are set by law and are subject to change. They are based on the number of months used to calculate your lump-sum payment and your age at retirement.

    Why Choose PLSO?

    We have heard from many PSRS members who have voiced concerns that financial advisors, private insurance companies and retirement planners are pressuring them to elect PLSO when they retire. They are encouraged to invest the funds elsewhere or use the lump-sum amount to purchase insurance policies that will provide protection in the form of an annuity for the member’s spouse or loved one.

    PSRS does not take a position for or against a member choosing PLSO at retirement. Since your monthly benefit is actuarially reduced to offset the payment of the PLSO amount, you are actually “paying” for the right to receive part of your PSRS benefit up front in a lump sum. In addition, the decision to do so may include many personal reasons PSRS is unaware of (paying off medical bills, leaving an inheritance, building a nest egg, etc.). The list can be endless and only you can decide the importance of each factor.

© 2024 PSRS/PEERS, all rights reserved.
© 2024 PSRS/PEERS, all rights reserved.