Your SERS class of service is among the most important factors in your pension calculation
and therefore is one of the most important pieces of information to know about your
pension plan. It is set by the Retirement Code and determines how quickly your pension
grows, how much you contribute toward your pension, the age at which you can retire
without penalty, and how long you must work before becoming eligible for monthly pension
payments, among
other things. SERS has more than a dozen classes of service. Your class of service
is determined largely by when you became a SERS member.
Newly Eligible Employees
Class A5 (Optional Classes A6 and 40)
Under the SERS umbrella there are 3 different plan options. Two "hybrid" plans (Class A5 and A6) where a portion goes to a defined benefit plan that features guaranteed monthly payments and a portion goes to a defined contribution plan where the amount of money you earn depends on the performance of your investments. The third option is a straight defined contribution/investment plan (Class 40). These plans were significantly changed January 1, 2019. There are a few exceptions related to campus police including patrol officer, police specialist, police supervisor, police chief, or assistant police chief. View the campus police retirement page for the retirement plan options available to campus police.
New employees are automatically enrolled in Class A5. After enrollment, you will be
contacted by SERS and given 45 days to make an optional, one-time election to switch
to Class A6 or Class 40, the Straight Defined Contribution/Investment Plan.
View more information on the SERS website for new enrollments.
For more information, view this short video about the SERS plans:
Campus Police SERS Plans
Class A3 (Optional Class A4)
Certain law enforcement and security positions are exempt from the defined contribution and hybrid retirement plans. As a result, employees in those positions can enter the defined benefit pension plan. If you became a SERS member on or after 1/1/19 as an employee in one of the law enforcement or security positions, you can choose the A3 class of service with the option to elect the A4 class within the first 45 days of SERS membership.
If you later switch jobs transferring out of a law enforcement or security position, or you leave service and later return to work for a SERS-participating employer in a non-law enforcement or security position, you will automatically enter the hybrid plan A5 class of service with the option to choose the hybrid plan A6 class or the straight defined contribution plan within the first 45 days of SERS membership. If you formerly were a member of the defined contribution or hybrid retirement plans and then you switched into one of the law enforcement or security positions listed here, and then later switch out of that law enforcement or security position, you will automatically return to your prior hybrid or defined contribution plan.
What is a "hybrid" plan?
A hybrid plan means that a portion of your retirement benefit comes from a pension plan that features guaranteed monthly payments for life, and a portion comes from a defined contribution investment plan, and the amount of money you earn from contributions by you and your employer and your personal investment choices.
Vesting
Participants do not become vested for the employer contributions until you have worked 10 years for the pension plan and 3 years for the investment plan. That means if you’re no longer employed by the State System before fully vested, you only have the right to your contributions and interest. You also do not have a right to monthly pension payments.
Understanding Your Pension
Understanding your pension formula is important in projecting your future retirement income. Each class listed above has different criteria that is used to determine your pension. The amount of the payment is determined by a formula set forth in the Retirement Code that takes into account your class of service multiplier, number of years of credited service, and final average salary. View the pension formula information on the SERS website to understand how to calculate your estimated pension based on your class of service.
Employer Contribution
The State System’s contribution to the pension plan is calculated each year based on the assets and liabilities of the SERS pension fund. These contributions are used to fund the SERS pension plans and not specifically to fund your individual plan.
Designating Beneficiaries
If you contribute to more than one SERS retirement plan, you need to file a separate beneficiary form instructing how the assets from each plan are to be distributed after your death. Without a beneficiary on file for each individual plan, the assets from that plan may go to your estate and result in estate taxes. To add or update your beneficiary visit the SERS website.