Inside Winter 2009Winter 2009 PSERS Update 5 Active & Vested Member Address & Name Changes It is important to make sure that your address and/or name is always up to date with PSERS

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Inside Winter 2009Winter 2009Winter 2009Winter 2009Winter 2009

PUBLICATION #9324

Despite the roller coaster ride the stockmarket has been on these last fewmonths, the value of your pension has notbeen affected. All PSERS pension benefitpayments are guaranteed by the Com-monwealth of Pennsylvania.This means that PSERS willalways make benefit paymentsto our members and survivorannuitants, regardless of theups and downs of the stockmarket or the value of the totalvalue of the PSERS invest-ment portfolio.

PSERS maintains a well-diversified investment programand as a result of this, we have limited ourexposure to the failings of individualfinancial institutions. For example,PSERS’ combined investment in AIG,Lehman, Merrill Lynch, Washington Mu-tual, and Wachovia represented less than2% of our total holdings.

Active and vestedmembers do notneed to be con-cerned over thevalue and safety oftheir PSERS contri-butions. Membercontributions aresecure and by law,have 4% interestapplied per year.With a guaranteed4% interest oncontributions, manyactive members areasking about increasing their PSERSmember contribution. Our active mem-bers may only contribute to PSERS at theset member contribution rate. You cannotincrease or decrease the contributions toyour PSERS account.The amount of member contributions andinterest in one’s account does not affectthe amount of the pension benefit.

PSERS - Your Sound InvestmentPSERS is classified by the InternalRevenue Service (IRS) as a 401(a),defined benefit plan. This means that thevalue of a member’s retirement benefit isdetermined by a fixed calculation, and not

the value of PSERSinvestments or amember’scontributions. Thedefined benefitcalculation for a ClassT-D member underthe Maximum SingleLife Annuity at “full”retirement(superannuation) is –

2.5%* x Final AverageSalary x Credited Years of School Service÷ 12 Months = Gross Monthly Annuity

Since PSERS was established in 1917,we have weathered numerous economicdownturns, including the GreatDepression in the 1930s, the Savings and

Loans scandal in the 1980s, thebursting of the tech stock bubble inthe early 2000’s, and the downturnfrom the September 11, 2001,terrorist attacks.

PSERS has remained financiallysound. Our funded ratio is currently85.8 percent, which is a healthypercentage for a mature pensionfund.

PSERS investment staff continuallyanalyzes portfolio risk and takesappropriate action when necessary.The PSERS investment portfolio is

designed to maximize returns over long-term investment horizons. The marketvolatility also provides strategicinvestment opportunities that PSERS willtake advantage of for future gains.Overall, PSERS will remain focused on itswell-diversified, long-term strategy thatwill position the fund to benefit when themarkets recover.

*2.0% for non-school service and/or Class T-C members

Superannuation or “full” retirementstatus, is reached one of threeways -

• Age 62 with at least one year ofcredited service• Age 60 with at least 30 years ofcredited service• 35 years of credited serviceregardless of age

PSERS Holidays for 2009

Weather Related Closings

When inclement weather hits your area, PSERS regional offices willmake every attempt to notify our members of either regional officeclosings and/or meeting cancellations.

We will also make every attempt to post meeting cancellations onthe regional office’s phone message, on the PSERS website(www.psers.state.pa.us), or on your local radio or televisionstation.

PSERS and all Commonwealth of Pennsylvania offices will be closedon the following holidays:

January 1January 19February 16May 25July 3

September 7October 12November 11November 26 & 27December 25

PSERS Board of Trustees MeetingSchedule for 2009

January 23, 2009March 13, 2009

May 1, 2009June 12, 2009

August 13, 2009October 2, 2009

December 11, 2009

These meetings are held in the 4th floor Boardroom of PSERS’headquarters at 5 North 5th Street in Harrisburg. In addition tothese Board meetings, Committee meetings are held at varioustimes throughout the year.

All PSERS Board meetings are open to the public.

For exact meeting times or if you would like to attend and requirean accommodation to participate, please call Barbara Flurie,PSERS Executive Office at 1-888-773-7748, extension 4617.

Winter 2009 PSERS Update2

Commonwealth ofPennsylvania

Public School Employees’Retirement System5 North 5th Street

PO Box 125Harrisburg PA

17108-0125

Website Address:www.psers.state.pa.us

Email Address:[email protected]

Toll-Free: 1-888-773-7748Local Calls: 717-787-8540TTY (Text): 717-772-5379

Weekdays(except holidays):

7:30 a.m. - 5:00 p.m.

PSERS is happy to providevisually impaired readers withour publications in large printor audio cassette. Please con-tact PSERS to request either ofthese free services.

PSERS is proud to be anequal opportunity employer

supporting workforcediversity.

Meet the PSERSBoard of Trustees

(at time of publication)

Secretary of Education (ex officio):

Gerald L. Zahorchak, Ph.D.

Treasurer of the Commonwealth of Pennsylvania(ex-officio):

Robin L. Wiessmann

Executive Director of the Pennsylvania School Boards Association,Inc. (ex-officio):

Thomas J. Gentzel

Two Members appointed by the Governor for a term of three years:

Hal MossTina Byles Williams

One Member of the Annuitant Group elected from among theirnumber for a term of three years:

Sally J. Turley

Three Members elected from among the Certified Contributors for aterm of three years:

Glen S. GalanteJames M. SandoMelva S. Vogler

One Member elected from among Non-certified Contributors for aterm of three years:

Patricia A. Tozer

One Member elected by members of Pennsylvania Public SchoolBoards from among their number for a term of three years:

Richard N. Rose

Two Members of the House of Representatives appointed by theSpeaker of the House, one representing the majority party and onerepresenting the minority party:

Honorable Dwight EvansHonorable Steven R. Nickol

Two Members of the Senate appointed by the President ProTempore of the Senate, one representing the majority party andone representing the minority party:

Honorable Vincent J. FumoHonorable Rob Wonderling

Winter 2009 PSERS Update 3

Faxing, E-Mailsand Your PSERS

AccountPSERS will not fax or e-mailmember account informationeven if you sign a releaserequest giving us permissionto do so. This applieswhether the requested infor-mation is to be faxed ore-mailed directly to you or toa third party. PSERS willmail the information to you ora third party’s address ifdesignated in the release.

Faxed and e-mailed informa-tion containing confidentialinformation can be easilyintercepted, possibly leavingyou open to identity theft.

The information usuallyrequested by active membersis a copy of their Statementof Account or current benefi-ciary information. Retiredmembers usually requestcopies of the IRS Form1099-R or a benefit sum-mary. Copies of these docu-ments can be printed directlyfrom the secure portion of thePSERS website(www.psers.state.pa.us),Interaction(www.psers.state.pa.us/interaction/default.htm),provided you have estab-lished an Interaction account.

Beneficiary information is notavailable through Interaction.

We do regret if this causesyou any inconvenience;however, this one stepprovides additional securityin protecting your personalinformation.

4 Winter 2009 PSERS Update

Disability Earned Income Limitationmeans that he or she is entitledto receive only a regular(normal or early) retirementbenefit (annuity). The retireeforfeits the disability portion ofthe annuity.

The statement must besubmitted for all years duringwhich you are receivingdisability payments fromPSERS. For example, youfiled an Application for DisabilityRetirement (PSRS-49) on May5, 2008. On May 28, 2008,PSERS’ Medical Examinersapproved an annual disabilityretirement benefit retroactive toJune 15, 2006, (your last day ofwork). You are required tocomplete Annual EarningsStatements for 2006, 2007, and2008.

In early January, PSERS mailsan Annual Earnings Statementto retirees under the age of 62who are receiving a PSERSdisability benefit. Theseretirees must provide PSERSwith their annual earningsinformation. We suggest thatdisability retirees complete thestatement as soon as possible.

If the disability retiree does notreturn the completed AnnualEarnings Statement by April 30,2009, the monthly disabilitybenefit payment stops until wereceive the information. If theform is not returned, thedisability retiree forfeits allrights to the disability portion ofthe retirement benefit (from thedate of the last incomeverification statementsubmitted to PSERS). This

At the time of retirement, a new retiree is provided with theopportunity to change his or her retirement option and/orcontributions and interest withdrawal. To do so, the new retireemust provide a completed Intent to Change the Terms of theRetirement Plan (PSRS-1242) form he or she receives along withthe “Initial Retirement Benefit” letter. The completed form must bereceived by the date stated.

If a retiree opts to change from a regular retirement option to adisability retirement and the requested change to a disabilityretirement is granted, any contributions and interest either receiveddirectly by the retiree or rolled over by the retiree, must be returnedto PSERS. If these funds are not returned to PSERS within thespecified time frame, the disability retirement will revert to theoriginally selected retirement option.

Additional information pertaining to this process is part of allprospective member’s PSERS Exit Counseling Session, held by thePSERS Regional Office representatives, as well as outlined in anew retiree’s “Initial Retirement Benefit” letter package.

Intent to Change & Disability

As a PSERS retiree, youmay change yourfederal withholding rateat anytime. To changeyour federalwithholding rate, youmust complete and signIRS Form W-4P.

When you submit FormW-4P to PSERS, thewithholding selectionon the new formsupersedes anyprevious taxwithholding request youmade. Please keep thisin mind, especially ifyou are requesting thewithholding of anadditional dollaramount.

It is not mandatory thatPSERS withhold federaltax from your monthlyannuity payment.However, electing that“no taxes” be withheldfrom your monthlypayment does notrelease you from yourtax liability. The IRSmay require you tomake quarterlyestimated tax paymentsto avoid an IRSimposed penalty.

You may obtain the IRSForm W-4P bycontacting the IRS,through the IRS websiteat www.irs.gov/pub/irs-pdf/fw4p.pdf, or bycontacting PSERS.

Federal WithholdingTax & Your MonthlyAnnuity Payment


Active & VestedMember Address& Name Changes

It is important to makesure that your addressand/or name is alwaysup to date with PSERS.Throughout the year,PSERS not only mailsour newsletters, butother important andtimely information,such as accountstatements for activeand vested members.

If you are an activemember, report alladdress or namechanges to youremployer. Youremployer will updatetheir records and reportthe change(s) toPSERS.

If you are a memberwho terminated allPennsylvania publicschool employment,your address changeshould be submitted toPSERS in writing. Besure to include yoursignature, the last fourdigits of your socialsecurity number, andthe effective date of thechange in the letter.

The PSERS disabilityretirement benefit is an actualretirement benefit. Ourdisability benefit is not aninsurance policy thatsupplements your salary whileyou are unable to work.

A member who is granted adisability retirement benefit byPSERS will receive a monthlyretirement benefit paymentfor as long as the member isdeemed disabled.

Disability retirement benefitsmay be granted on a long- orshort-term basis and may bereviewed at any time.Benefits are subject toapproval, denial, or renewalbased on your medicalinformation.

To be eligible, you must:

• Have at least five yearsof credited service.• Be mentally orphysically incapable ofcontinuing to perform theduties of your job.• Apply for a disabilitybenefit within two schoolyears from the day youlast earned service creditand had contributionswithheld. You are notrequired by PSERS toresign your position toapply for a disability

benefit. Your employer,however, may requireresignation.• Not be receiving any otherretirement benefit fromPSERS.

To apply for a PSERS disabil-ity retirement benefit, contactyour PSERS regional represen-tative for counseling and assis-tance with completing thePSERS Disability Packet.

If you should apply for adisability retirement benefitand the PSERS medicalexaminers deny your re-quest, then the Executive StaffReview Committee automati-cally reviews it. If your requestcontinues to be denied you:

• May request an adminis-trative hearing before anindependent hearing exam-iner.• May request a refund ofyour remaining accumu-lated deductions (yourcontributions to PSERSplus interest).• May vest your accountand later apply for a retire-ment benefit if you haveterminated employment.• May apply for a normal orearly retirement if you wereeligible for these benefitswhen you left schoolservice.

Disability Benefit Eligibility

Disability Retirement Option TermsThe terms of a retirement option (see page 6) do not necessarilyapply to a disability retirement benefit. When you receive adisability retirement, your survivor annuitant’s monthly benefit maydiffer from a survivor annuitant’s paid under a regular retirement.Your disability retirement benefit may have a payment supplementapplied. This supplement is not payable to your survivor and mayaffect his or her gross monthly benefit.

6

IRS Section 401(a)(17)of the Internal RevenueCode limits the amountof compensation that issubject to retirementcontributions for activeemployees enteringPSERS membership onor after July 1, 1996.For employees whobecame PSERS’members beforeJuly 1, 1996, there isno maximum earninglevel.

The calendar yearreportable compensa-tion limit for 2009 is$245,000. This repre-sents an increase fromthe 2008 limit of$230,000.

Employers have beennotified of thisincrease. If you earn$245,000 or moreduring the 2009calendar year andbelieve your employeris not withholding thecorrect amount ofPSERS member contri-butions, please contactyour employer.

MaximumEarnings

Subject toContributions

Winter 2009 PSERS Update

Whether you are planning on retiring in the future, or you are alreadyreceiving a retirement benefit from PSERS, knowing the terms of theretirement options is beneficial to you and your loved ones whenplanning for your future. The following is a brief description of eachretirement option and the death benefit it provides.

Maximum Single Life AnnuityThe maximum single life annuity provides the highest monthly benefitamount for your lifetime. If at the time of your death you have notreceived an amount equal to your contributions and interest, the balancewill be paid to your beneficiary.

Option 1Under this option, your monthly benefit is reduced. The reduction isbased on your age at the time of retirement. A value, called the TotalValue, is placed on your account at the time of your retirement. If at thetime of your death you have not received an amount equal to the TotalValue of your account, the balance will be paid to your beneficiary.

Option 2Under this option, your monthly benefit is reduced. This reduction isbased on your gender and age and the gender and age of yourdesignated survivor annuitant. You may name only one survivorannuitant. At the time of your death, your designated survivor annuitantwill receive for his or her lifetime, the same monthly benefit that wasbeing paid to you.

Option 3Under this option, your monthly benefit is reduced. This reduction isbased on your gender and age and the gender and age of yourdesignated survivor annuitant. You may name only one survivorannuitant. At the time of your death, your designated survivor annuitantwill receive a lifetime monthly benefit for one-half of the amount that youhad been receiving.

Customized OptionThis option can be used if none of the other retirement options fits yourneeds. It allows you to customize your benefit. For example, you mayelect a specific percentage for a survivor annuitant different from thoseprovided in Option 2 or Option 3. The death benefit is designed at thetime of your retirement and must be approved by PSERS’ actuaries.

At the time of your death, if you had elected to receive a retirementbenefit under Option 2, 3, or Customized, your survivor annuitantreceives the appropriate percentage of your gross monthly benefit basedon the option you selected at retirement.

PSERS pays this monthly retirement benefit to you for life. Disabilityretirement benefits, however, may be subject to renewal. Please contactyour PSERS regional representative for more information about disabilityretirement options.

Understanding the DifferentRetirement Options


Foundations for Your Future (FFYF) Program ScheduleAs a part of its educational outreach, PSERS provides Foundations for Your Future seminars for activemembers. PSERS regional representatives present these seminars throughout the school year to provideall active members with general information about PSERS’ benefits and services. Attendance at a Foun-dations for Your Future seminar will help you begin to plan for your retirement early in your career. Theseprograms review PSERS related topics such as: benefit options, withdrawal of contributions, rollovers,taxes, employment after retirement, legislative actions affectingPSERS, and health insurance.

Listed below are meetings scheduled from late January 2009 throughApril 2009 (not inclusive, more dates may be added in some areas).Meetings prior to the end of January are listed on the PSERS websiteat www.psers.state.pa.us/regional/FFYF_Schedule_Overview.htm.If you need directions to any of the meeting sites, please contact yourregional office, the PSERS Member Service Center at 1-888-773-7748,or access the PSERS website at www.psers.state.pa.us/regional/FFYF_Schedule_Overview.htm. If there is a demand for additionalseminars during the year, PSERS may add seminars and post them tothe PSERS website. PSERS employers in the area will receive seminar notices as well.

Please Note: Advance registration is not required to attend any of these programs. If you require anaccommodation to participate, please contact your PSERS regional office.

As this printed schedule issubject to change due toweather or other unforeseenconditions, we highly suggestthat prior to leaving for ameeting, you verify the datesand times listed through theschedule posted on the PSERSwebsite.

Northwest Region, Toll-Free 1-888-773-7748, extension 5175 Counties Served: Beaver, Butler, Clarion, Clearfield (DuBois Area School District only),

Crawford, Erie, Forest, Jefferson, Lawrence, Mercer, Venango, & Warren County City Location & Address Date Time

Butler Butler Butler Area SD Intermediate School, 120 Campus Dr.

March 10, 2009 4:30 PM

Jefferson Brookville Calvary Church, 110 Evans St. April 7, 2009 4:30 PM

Clarion Clarion Riverview IU, 270 Mayfield Rd. February 12, 2009 4:30 PM

Clearfield Dubois Dubois Area Middle School Auditorium, 404 Liberty Blvd.

February 24, 2009 4:30 PM

Erie Edinboro Northwest Tri-County IU, 252 W aterford St. March 17, 2009 4:30 PM

Venango Franklin Rocky Grove Jr/Sr High School Auditorium, 403 Rocky Grove Ave.

March 5, 2009 4:30 PM

New Castle Lawrence Lawrence County Career Tech Center, 750 Phelps W ay

March 30, 2009 4:30 PM

Mercer Mercer Mercer Jr/Sr High School Auditorium, W est Butler St.


Crawford Saegertown Penncrest SD, Saegertown High School Auditorium, Mook Rd.

April 2, 2009 4:30 PM

W arren W arren W arren Area High School Auditorium, 345 E 5th Ave.

March 3, 2009 4:30 PM

Centraleast Region, Toll-Free 1-888-773-7748, extension 5475 Counties Served: Berks, Carbon, Chester, & Lehigh

County City Location & Address Date Time

Lehigh Allentown Days Inn & Conference Center, 1151 Bulldog Dr.

January 22, 2009 March 17, 2009

4:30 PM 4:30 PM

Carbon Jim Thorpe Jim Thorpe Area High School, 1100 Center St. March 3, 2009 4:30 PM

Berks Reading Reading-Muhlenberg Career & Technology Center, W arren Rd.


Chester W est Chester J. R. Fugett Middle School – Auditorium, 500 Ellis Ln.

March 5, 2009 4:30 PM

Foundations for Your Future (FFYF) Program Schedule (continued)


Southwest Region, Toll-Free 1-888-773-7748, extension 5775 Counties Served: Allegheny, Fayette, Greene, & Washington


Washington Charleroi Mon Valley Career and Technology Center, Classrooms 1 and 2, 1 Guttman Blvd.

February 5, 2009 April 9, 2009

4:30 PM 4:30 PM

Allegheny Pittsburgh

Pittsburgh Federation of Teachers Building, 10 South 19th St.-at the river

January 21, 2009 February 25, 2009 March 11, 2009 April 8, 2009

4:30 PM 4:30 PM 4:30 PM 4:30 PM

Washington Washington Trinity Middle School Auditorium, 50 Scenic Dr.

March 10, 2009 4:30 PM

Greene Waynesburg Waynesburg Central High School, Auditorium, 30 Zimmerman Dr.

January 21, 2009 4:30 PM

Allegheny West Mifflin Community College of Allegheny County, South Campus, Multi Purpose Room (Room A-306), 1750 Clairton Rd.


Southeast Region, Toll-Free 1-888-773-7748, extension 5575 Counties Served: Bucks, Delaware, Montgomery, & Philadelphia


Bucks Bensalem Bensalem High School, North Wing Audion, 4319 Hulmeville Rd.

March 10, 2009 4:30 PM

Bucks Jamison Middle Bucks Institute of Technology, 2740 Old York Rd.

March 31, 2009 4:30 PM

Montgomery Kulpsville Best Western Inn at Towamencin, 1750 Sumneytown Pike

March 5, 2009 4:30 PM

Delaware Morton Delaware County Intermediate Unit, Education Service Center, Rooms 171 & 172, 200 Yale Ave.

March 11, 2009 April 1, 2009

4:30 PM 4:30 PM

Philadelphia Philadelphia Philadelphia School District Education Center, Auditorium, 440 North Broad St.

March 12, 2009 4:30 PM

Philadelphia Philadelphia Ramada Philadelphia Northeast, 11580 Roosevelt Blvd.

March 26, 2009 4:30 PM

Montgomery Pottstown Pottstown Senior High, North Washington St. April 2, 2009 4:30 PM

Bucks Quakertown Quakertown Area High School, 600 Park Ave. March 17, 2009 4:30 PM

Southcentral Region, Toll-Free 1-888-773-7748, extension 5675 Counties Served: Adams, Cumberland, Dauphin, Franklin, Fulton, Huntingdon, Juniata, Lancaster, Lebanon, Mifflin,

Perry, & York County City Location & Address Date Time

Franklin Chambersburg Chambersburg Area Middle School, Auditorium, 1151 East McKinley St.

March 25, 2009 4:30 PM

Adams Gettysburg Gettysburg Middle School, Large Group Room, 37 Lefever St.

March 4, 2009 4:30 PM

Dauphin Hummelstown Lower Dauphin Middle School, Auditorium, 251 Quarry Rd.

April 2, 2009 4:30 PM

Lancaster Lancaster Lancaster-Lebanon IU, 1020 New Holland Ave. April 15, 2009 4:30 PM

Mifflin Lewistown Lewistown Area High School, Auditorium, 2 Manor Dr.

April 23, 2009 4:30 PM

Lancaster Lititz Warwick Middle School, Auditorium, 401 W Maple St.

March 12, 2009 4:30 PM

Dauphin Lykens Upper Dauphin Middle School Auditorium, 5668 State Route 209

March 24, 2009 4:30 PM

Cumberland Summerdale Central Penn Conference Center, College Hill & Valley Rd.

March 11, 2009 4:30 PM

Foundations for Your Future (FFYF) Program Schedule (continued)


The PSERS Update is intended for general informational purposes and to alert members about important deadlines,changes, and developments in the law or retirement policy. It should not, however, be relied on as providing legal advice oras the basis for individual retirement planning and decisions. The Public School Employees’ Retirement System providespersonalized retirement information and counseling services that can be accessed by calling toll-free, 1-888-773-7748.

The contents of this newsletter may not be used for any commercial purpose without PSERS’ prior written permission.

Northeast Region, Toll-Free 1-888-773-7748, extension 5375 Counties Served: Lackawanna, Luzerne, Monroe, Northampton, Pike, Susquehanna, Wayne, & Wyoming


Lackawanna Archbald Valley View Jr-Sr High School Auditorium, 1 Columbus Dr.

February 10, 2009 April 16, 2009

4:30 PM 4:30 PM

Monroe E. Stroudsburg Elks Lodge #319, 260 Washington St. March 17, 2009 4:30 PM

Northampton Easton The Eastonian Banquet & Convention Center, Holiday Inn Express, 90 Kunkle Dr.

January 22, 2009 March 18, 2009

4:30 PM 4:30 PM

Luzerne Nanticoke Luzerne County Community College, Educational Conference Center, Auditorium 132, 1333 South Prospect St.

March 10, 2009 4:30 PM

Susquehanna Montrose American Legion Gardner-Warner Post 154, RR 4, Elk Lake Rd.


Northcentral Region, Toll-Free 1-888-773-7748, extension 5275 Counties Served: Bradford, Cameron, Centre, Clearfield (all districts except DuBois Area), Clinton, Columbia, Elk,

Lycoming, McKean, Montour, Northumberland, Potter, Schuylkill, Snyder, Sullivan, Tioga, & Union County City Location & Address Date Time

Schuylkill Mar Lin Schuylkill IU, Technology Center, South Campus,15 Maple Ave., Pottsville-Minersville Hwy.

April 7, 2009 4:30 PM

Northumberland Montandon Central Susquehanna IU, Main Building, Lawton Ln.

March 17, 2009 4:30 PM

Union New Berlin SUN Area Career & Technology Center, Large Group Instructional Room, 21st. Century Dr.


Bradford Towanda Towanda Area High School Large Group Instruction Room, 1 High School Dr.

March 5, 2009 4:30 PM

McKean Smethport Smethport Area Junior/Senior High School Auditorium, 412 S. Mechanic St.

April 14, 2009 4:30 PM

Centre State College State College Area High School South, Auditorium, 650 Westerly Pkwy.


Clearfield West Decatur Central IU, Clinton Room, 345 Link Rd. March 26, 2009 4:30 PM Lycoming Williamsport Holiday Inn Williamsport, 100 Pine St. February 17, 2009 4:30 PM

Centralwest Region, Toll-Free 1-888-773-7748, extension 5875 Counties Served: Armstrong, Bedford, Blair, Cambria, Indiana, Somerset, & Westmoreland

County City Location & Address Date Time Blair Altoona Ramada Inn-Altoona, Plank Road exit March 4, 2009 4:30 PM

Bedford Bedford Arena Restaurant, RR 220 February 9, 2009 4:30 PM

Cambria Ebensburg Comfort Inn, 111 Cook Rd. near RT 22 and 219

January 22, 2009 4:30 PM

Westmoreland Greensburg Mountain View Inn, Route 30 East from Greensburg

March 12, 2009 4:30 PM

Armstrong Kittanning Belmont Complex, 415 Butler Rd. March 2, 2009 4:30 PM

Somerset Somerset Quality Inn, 215 Ramada Rd. March 16, 2009 4:30 PM


Activated Military Service

Photo Courtesy of U.S. Army -Photograph by Sgt. Jason Dangel

Return of refundsFormer uncredited full-timeserviceFormer uncredited part-timeserviceFormer uncredited non-qualifying part-time serviceSpecial sick leaveApproved leave of absenceOut-of-state school serviceService with a CountyBoard of School DirectorsCounty nurse serviceCadet nurse serviceU.S. Government serviceMilitary serviceMaternity leave (occurringbefore November 1, 1978)

Active contributing membersof PSERS and active StateEmployees’ RetirementSystem (SERS) who weregranted Multiple Servicemembership may be eligibleto purchase service credit.Listed below are the types ofservice that you may beeligible to purchase:

Purchasing ServiceCredit

You may not purchaseservice credit to gain creditunless you are eligible basedon employment, qualifyingleave, or military service yourendered. You cannotpurchase service credit forservice not rendered.

For more details on therequirements to purchaseservice credit and theapplications to apply, contactPSERS or view theinformation on the PSERSwebsite atwww.psers.state.pa.us/publications/pamphlets/credit.htm.

If you are an active contributingmember of PSERS and areplaced on activated duty on orafter July 1, 1990, you canchoose either to continuemaking your retirementcontributions or not to do soduring your military leave. If youchoose to continue makingPSERS contributions, it will bebased on your full contractedsalary and payments must bemade directly to your publicschool employer. You willreceive PSERS service credit forthat period.

If you choose not to makecontributions during your militaryleave, upon return to publicschool service, PSERS will sendyou a bill (Statement of AmountDue) for the military leave time.

You can purchase this servicecredit via lump-sum payment,

payroll deductions made throughyour employer, or permanentreduction at retirement. Noapplications are necessary.

No interest will be charged toyou for up to three times thelength of your leave or five yearsfrom the date of the originalbilling, whichever is less.

You may choose not to purchaseyour service time by notifyingPSERS within 90 days ofreceiving the Statement ofAmount Due. Purchasingservice credit, however, can helpyou reach eligibility earlier forvesting and disability or regularretirement benefits, as well asincreasing your monthly benefitwhen you do retire. Thisaddtional service also increasesyour death benefit.

As with any purchase of service credit request, you must applywhile an active contributing member of PSERS. Retirees,vested members who have terminated all Pennsylvania publicschool employment, and Pennsylvania public school part-timeemployees who have not reached employment qualifications(500 hours or 80 days) are ineligible to apply to purchaseservice credit.

Additional Purchase of Service Information


A COLA at What Cost?PSERS receives numerousinquiries each month regardingcost-of-living adjustments(COLAs) for retirees. Thesequestions come from currentretirees aswell as futureretirees.

In the Com-monwealth ofPennsylva-nia, COLAsare providedby enactmentof individuallegislative proposals. The Penn-sylvania General Assembly hasthe sole authority to initiate andpass legislation that would granta COLA. The current processdoes not allow for the issuanceof COLAs on an automatic orannual basis.

Before passing a piece oflegislation which would grantPSERS retirees a COLA, thelegislature must take intoconsideration two key fundingitems:

• The financial impact the COLAwould have on PSERS.• How the COLA would befunded.

When the legislature grants aCOLA, an unfunded liability iscreated for PSERS. This liability,which is similar to a mortgage,must be paid. Current lawrequires COLA costs to befinanced over 10 years, whichresults in an increased employer(state and local school district)contribution rate to make thepayments on the debt. Any

contribution rate increase iseventually passed on to thetaxpayer in the form of anincrease in school propertytaxes and/or state taxes.

Because ofthe passageof Act 9 of2001’s higherretirementbenefit multi-plier, followedby a downturnin the stockmarket, and

Act 40’s changes to PSERSfunding methodology, theemployer contribution rate isalready expected to signifi-cantly rise in 2012-13. Legisla-tors have to take into accounttheramifica-tions ofenactinga COLAthatwouldresult inan in-crease ofemployerandtaxpayer costs, knowing thatthere will most likely be asignificant increase to theemployer contribution rate in2012-2013. The current projec-tion for the 2012-2013 em-ployer contribution rate is16.4%. With the current down-turn in the stock market, thatrate may climb to over 20%.The enactment of a COLAwould likely push the employercontribution rate for 2012-2013even higher.

The complexities and uncer-tainties of proposals to

eliminate the employercontribution rate spike maketheir legislation acceptanceuncertain, particularly sincecurrent shortfalls in the currentState Budget.

While Governor Rendell hasimplemented many cost savingmeasures, including a hiringfreeze in an attempt to savemoney, the amount theseactions save does not begin tocover the cost created bygranting a COLA toPennsylvania’s publicretirement system retirees.

The legislature has aresponsibility to ensure theretirement systems arefinancially solvent and able to

fund the currentretirement benefits.Additionally, theGovernor’s BudgetOffice has beenworking on plans tosoften or eliminatethe 2012-2013employercontribution ratespike. And while aCOLA may not be

likely in the near futurebecause of these priorities,PSERS retirees do have thebenefit of being part of adefined benefit plan thatguarantees benefit paymentsnot only in the short-term, butin the long-term, as well.

...The current process doesnot allow for the issuanceof COLAs on an automaticor annual basis...

...Legislators have to takeinto account the ramifica-tions of enacting a COLAthat would result in anincrease of employer andtaxpayer costs...

...PSERS retirees dohave the benefit ofbeing part of a definedbenefit plan thatguarantees benefitpayments...


Whether you are a retiree on afixed income or currentlyworking, the economy has all ofus wondering, “What’s next?How can I make ends meet?”There are already manyfederal, state, and localprograms in place to aid thosewith a low income, as well asnew ideas to explore on how tosave money or make yourmoney work for you. Here area few ideas:

Home Heating Assistance

The Low Income Home EnergyAssistance Program (LIHEAP)is a federal program thatdistributes funds to states tohelp low-income householdspay winter heating bills as wellas summer cooling bills.Additional state energyassistance and fuel fundprograms may be available tohelp households during a winteremergency. To find out if youqualify for assistance whereyou live, this website,www.liheap.org/assistance.html, may help youlocate a source or contact yourlocal heating oil dealer.

If you live in Pennsylvania andneed assistance, you may alsocall the Department of PublicWelfare’s toll-free LIHEAPcontact number, 1-866-857-7095 for more information, oronline at www.dpw.state.pa.us/ServicesPrograms/LIHEAP.

There are also non-federaldollars available from local fuelfunds. These non-governmental funds usuallyraise funds from contributionsfrom your neighbors when theypay their utility bills.

Incorporated in 1987, theNational Fuel Funds Network(NFFN) provides a list of localfunds on their website atwww.nationalfuelfunds.org.NFFN is an organization who

helps build member programsto raise and distribute approxi-mately $100 million annually forutility assistance programs. Its300 members include non-profit, government, and utilitycompanies in the US, Canada,and the United Kingdom.

Nutrition AssistanceThe Federal government’sSupplemental Nutrition Assis-tance Program (SNAP) pro-gram provides subsidized foodand nutritional assistance tolow income households.SNAP, a program of the USDepartment of Agriculture(USDA), is the largest domesticnutrition assistance program,providing a supplement to thefood budgets of more than28 million low-income individu-als each month.

For more information on theSupplemental Nutrition Assis-tance Program visitwww.fns.usda.gov/snap. Tosee if you are eligible for SNAPassistance, you can go throughtheir online pre-screening atwww.snap-step1.usda.gov/fns,or in Pennsylvania,contact the Depart-ment of PublicWelfare’s toll-freenumber, 1-800-692-7462, and ask aboutfood subsidy assis-tance.

Medical AssistanceIf you have an illness andcannot cover the additionalexpense for special medica-tions or treatments not coveredby insurance, your illness mayqualify you for a free clinicaltrial.

Clinical trials are studies usu-ally financed by a pharmaceuti-cal company or medical re-search grant in which patientsare assigned an

experimental treatment. Theoutcomes are then measured.Many trials are completely free,not only covering the cost ofthe medication, but the doctorvisits, as well.The US National Institutes ofHealth maintains a website thatlists close to 65,000 clinicaltrials being conductedthroughout the world. The siteeven provides a list of studieson rare diseases wheretreatments may not yet becovered by insurance plans orthe drugs to treat the diseasemay be experimental, andtherefore, not covered under aprescription plan. The registryis available online atwww.ClinicalTrials.gov.

Financial CalculatorsOnline sources such aswww.WalletPop.com, orwww.kiplinger.com featurecalculators for auto loans,budgeting, credit cards,mortgages, life insurance,paychecks, savings, plus more.

Calculatorssuch asthese canhelp youmakeinformeddecisionson where,how, andwhen youspend yourhardearned

income or retirement benefit.Some of these calculators canhelp you budget payments toassist you in getting out of debtor not building additional debt.The websites listed are bothgovernment and privately heldsites. PSERS is not endorsingany particular site. We are justproviding examples ofresources available to you toassist with your personalfinances.

Stretching Your Income


Public School Employees’ Retirement System as of June 30, 2008

Net Assets Held in Trust

PSERS is the 14th largest public pension fund in the nation and the 21st largest among public andcorporate pension funds in the nation. The fund’s net assets decreased $4.8 billion from the end ofthe prior fiscal year, June 30, 2007. This decrease is primarily attributable to net investment loss,payment of pension benefits, and administrative expenses combined that exceeded member andemployer contributions.

At Fair Value$ Total Assets of the Fund (receivables, investments, fixed assets, etc.) $ 71.0$ Total Liabilities of the Fund (payables, obligations under securities lending, etc.) - $ 8.3$ Total Plan Net Assets $ 62.7

InvestmentsAs of June 30, 2008, total investments, which comprise the majority of PSERS’ overall net assetsheld in trust, by asset class were as follows: At Fair Value

$ Short-Term Investments $ 7.0$ Fixed Income Investments $ 15.2$ Common and Preferred Stock Investments $ 27.9$ Real Estate Investments $ 4.9$ Alternative Investments $ 8.9$ Total Net Investments as of June 30, 2008 $ 63.9

During the 2007-2008 school year, the employer contribution rate was 7.13 percent of the employer’spayroll. For the 2008-2009 school year, the rate decreased to 4.76 percent. Both the employer andthe Commonwealth are responsible for paying a portion of the employer’s share. Employers aredivided into two groups: school entities and non-school entities. School entities are responsible forpaying 100 percent of the employer share of contributions to PSERS. The Commonwealth reim-burses the employer one-half of the payment for employees hired on or before June 30, 1994.School entities are reimbursed by the Commonwealth based on a statutory formula for employeeshired after June 30, 1994. Non-school entities and the Commonwealth each contributed one-half thetotal employer rate (3.565 percent) for school year 2007-2008.

Employee & Employer Rate History

Contributions

Fiscal Year Ended June 30

Employee Contribution Rate

Employer Contribution

Rate

Cumulative Yearly Salaries Paid to School

Employees 2008 6.50%/7.50% or 5.25%/6.25% 7.13% $11.9 Billion (estimated) 2007 6.50%/7.50% or 5.25%/6.25% 6.46% $11.7 Billion 2006 6.50%/7.50% or 5.25%/6.25% 4.69% $11.4 Billion 2005 6.50%/7.50% or 5.25%/6.25% 4.23% $10.8 Billion 2004 6.50%/7.50% or 5.25%/6.25% 3.37% $10.5 Billion 2003 6.50%/7.50% or 5.25%/6.25% 1.15% $10.2 Billion

2002* 6.50%/7.50% or 5.25%/6.25% 1.09% $9.8 Billion 2001 5.25%/6.25% 1.94% $9.4 Billion

A summary of the state of the PSERS fund as of June 30, 2008, is listed below and on the followingthree pages. More detailed information is available in the publication, Comprehensive Annual Finan-cial Report as of June 30, 2008, which can be viewed on the PSERS website atwww.psers.state.pa.us/publications/cafr/index.htm.

* The employee contribution rate increased 1.25% due to the provisions of Act 9 of 2001, which created a new membership class(Class T-D) covering the majority of PSERS members effective January 1, 2002.


Comparison of Total Accrued Liabilities to System Assets For Valuation Years2007, 2003, and 1999 ($ Amounts in Billions)

Condensed Statementof Plan Net Assets as of June 30, 2008

ASSETS (In Millions)

ReceivablesContributions due from membersand employers $ 551Investment receivables & othermiscellaneous receivables 1,707

Total Receivables $ 2,258Investments (at fair value) $63,892

Securities lending collateral pool 4,847Fixed Assets 1

TOTAL ASSETS $70,998

LIABILITIES

Benefits and other accounts payable 587Investment purchases &other liabilities 2,905Obligations under securities

lending 4,847

TOTAL LIABILITIES $ 8,339NET ASSETS

Held In Trust For Pension and Postemployment Healthcare Benefits End of Year, June 30, 2008 $62,659

Condensed Statement of Changesin Plan Net Assets as of

June 30, 2008NET ASSETS - Held in Trustfor Pension and Post-employment HealthcareBenefits Beginning of Year,July 1, 2007 $67,523(A)

ADDITIONS DURING THE YEARContributions from Members& Employers 1,902Net Investment Income (loss) (1,775)

TOTAL ADDITIONS $ 127(B)

DEDUCTIONS DURING THE YEARBenefits and Refunds Paid 4,942to MembersAdministrative Expenses 49TOTAL DEDUCTIONS $4,991(C)

NET CHANGE IN ASSETS - Heldin Trust for Pension andPostemployment HealthcareBenefits (B) - (C) $(4,864)(D)

NET ASSETS - Held in Trustfor Pension and Post-employment HealthcareBenefits End of Year,June 30, 2008 (A) + (D) $62,659

(A)Accrued Liabilities*Year

(B)Actuarial Value

of Assets

(A) - (B)Funded (Unfunded)Accrued Liability**

(B) / (A)Percent

Covered***2007 $66.6 $57.2 $ 9.4 85.8%2003 $54.4 $52.9 $(1.5) 97.2%1999 $37.5 $44.6 $ 7.1 119.0% * Accrued Liabilities - Generally shows PSERS’ benefit obligations to current retirees and future benefits to bepaid to active members who eventually retire. ** Unfunded Accrued Liability - Shows the portion of the accrued liabilities not covered by assets available toPSERS at the end of the valuation year.*** Percent Covered - Shows the percent of accrued liabilities covered by system assets at actuarial value.

(In Millions)

Detailed information regarding the financial statements of the System is available inthe PSERS’ Comprehensive Annual Financial Report (CAFR) for fiscal year endingJune 30, 2008. The financial statements in the CAFR are presented in conformity withaccounting principles generally accepted in the United States of America as promul-gated by the Governmental Accounting Standards Board. The CAFR is available onthe PSERS website, www.psers.state.pa.us, or call 1-888-773-7748 for a copy.


Workers’ Compensation InformationWorkers’ Compensation is a benefit program, usually provided throughinsurance, to compensate employees who are injured in the performanceof their job duties.There are two possible situa-tions for a school employee toreceive Workers’ Compensa-tion benefits and PSERSretirement benefits at the sametime. The first involves anemployee who is receivingWorkers’ Compensation andsubsequently retires. Thesecond situation involves anemployee who is receivingWorkers’ Compensation butdoes not retire.

1. In order for the first situationto occur (choosing to retirewhile receiving Workers’ Com-pensation), the employee mustmeet one of the PSERS’requirements listed below:

For regular retirementbenefits, the employeemust meet one of theserequirements:• Have at least five years ofcredited service at any age.• Have at least one year ofservice and be age 62 orolder.The employee must alsoterminate school employ-ment.

For disability retirementbenefits, the employee must:• Have at least five years ofcredited service regardless ofage.• Be physically or mentallyunable to perform the duties ofthe school employment forwhich hired.• Must apply for PSERS disabil-ity benefits within two schoolyears of the last day paid bythe school employer.

PSERS does NOT require atermination of employment ifthe employee applies fordisability benefits; however,some school employers mayrequire termination.

Employers have the right toreduce the Workers’ Compen-sation benefits based on theportion of the retirement ben-efits that was funded by theemployer. In no event willPSERS retirement benefits beaffected.

2. The second situation is whena school employer grants aSpecial Sick Leave and the

employee iswilling todelay thestart ofretirementbenefits.Then, theemployeemay earnretirementservicecredit up toone yearwhile re-ceivingWorkers’

Compensation benefits. Thegranting of the Special SickLeave status is optional and atthe employer’s discretion.

To receive service credit for theperiod of the Special SickLeave, the employee mustreceive at least one-half regularsalary through Workers’ Com-pensation. If the employergrants the Special Sick Leave,then the employer must decide

Public EmployeePension Forfeiture ActThe Public Employee PensionForfeiture Act (Act 1978-140)provides that PSERS mem-bers who are convicted andsentenced or pled guilty or nocontest in a court of law forany crimes listed in the Pen-sion Forfeiture Act are subjectto forfeiture of their PSERSpension benefit.

Act 2004-86 amended Act1978-140 to add certainsexual crimes committed by aschool employee against astudent as a forfeitable of-fense. These crimes are rape,statutory sexual assault,involuntary deviate sexualintercourse, sexual assault,aggravated indecent assault,indecent assault, and indecentexposure.

The Pension Forfeiture Actalso applies to certain othercrimes related to public schoolemployment, such as theft bydeception, theft of services,forgery, theft by failure tomake required disposition offunds received, bribery inofficial matters, perjury, un-sworn falsification to authori-ties, false reports to lawenforcement authorities,tampering with public recordsor information, and intimida-tion of witnesses or victims,among other offenses.

This article is intended to givea general overview of thePension Forfeiture Act. If thereis a conflict between what isstated in this article and thePension Forfeiture Act, theterms of the Pension Forfei-ture Act, the Retirement Code,PSERS’ administrative inter-pretations and court decisionswill govern the payment ofbenefits. (continued on page 19)


if retirement contributions toPSERS should continueduring the period of theleave.

Continuing Contributionsto PSERSIf the employer chooses tocontinue contributingto PSERS during the SpecialSick Leave, then both theemployee and the employermust be willing to contributebased on the employee’s fullcontract salary had he/sheremained in schoolemployment during this oneyear of leave.

The employer will remit theemployee and theemployer shares ofcontributions to PSERS.

DiscontinuingContributions to PSERS

If the employer chooses to

discontinue contributingretirement contributions toPSERS during the period ofthe Special Sick Leave, thenthe employee, upon asubsequent qualifying return topublic school employment, mayapply to purchase credit for theperiod of the leave.

The employer will be billed forthe appropriate employercontributions if/when thepurchase is made. If theemployee does not or cannotreturn to school service,he/she will never be able toobtain credit for the periodof the Special Sick Leave.

NOTE: While being reported ona contributing ornoncontributing Special SickLeave, an employee may notapply for or receive PSERSretirement benefits.

Workers’ Compensation & Retirement Benefits (cont.)

May I BorrowMoney from MyPSERS Account?

The PennsylvaniaRetirement Code (Act 96of 1975) not onlyestablishes the rules forPSERS to manage yourretirement account, butprotects your PSERSbenefit as well.

Under this law, PSERSmay not loan you money.Your funds in PSERSmay neither be used forcollateral nor attached orassigned.

As an active member ofPSERS, we cannot allowyou to receive thecontributions and interestfrom your accountwithout terminatingemployment with yourpublic schoolemployer(s).

When you are a PSERSretiree, this same lawprevents the liquidation ofyour monthly benefit in alump-sum payment. Thisguarantees that you willreceive a monthly benefitpayment for the rest ofyour life.

These provisions underthe law help to ensurethat your PSERS benefitis protected well into yourfuture.

PSERS mails IRS Form 1099-R to retired and refunded mem-bers at the end of January. If you do not receive your Form1099-R by February 10, 2009, contact PSERS for a duplicatecopy. If you have an online PSERS Interaction account, youmay print a copy through the Interaction portion of the PSERSwebsite, www.psers.state.pa.us.

All retirement benefit payments from PSERS are exempt fromPennsylvania state and local taxes. If you live in another state,check with your state and local tax authority to see if yourPennsylvania retirement benefit is taxable. PSERS only withholdsfederal taxes and cannot withhold other state and municipaltaxes. You need to pay your taxes directly to your taxingauthority.

You can change your federal tax withholding at any time. Justcomplete an IRS Form W-4P and send it to PSERS. The FormW-4P is available by contacting the IRS, through the IRS websiteat www.irs.ustreas.gov/pub/irs-pdf/fw4p.pdf, or by contactingPSERS.

Attention Retirees...Mailing of 1099-R Forms

Public School Employees’ Retirement System5 North 5th StreetPO Box 125Harrisburg PA 17108-0125

PRSRT STDU.S. Postage Paid

Harrisburg PAPermit No. 254

Important Information from the

Commonwealth of Pennsylvania

Public School Employees’ Retirement System

Documents

Inside Winter 2009Winter 2009 PSERS Update 5 Active & Vested Member Address & Name Changes It is important to make sure that your address and/or name is always up to date with PSERS