PSERS Comparisons PSERS pension benefits are much better than anything available in the private sector.

This compares the benefit rate of PSERS with the benefit rate of some major corporations. The benefit rate is multiplied by years of service, and a salary number, to get the pension amount. Years of Service * benefit rate * salary number = pension. PSERS has various benefit rates depending on date of hire. Teachers retiring now get a 2.5 benefit applied to their highest salary. Now lets see how that compares to the private sector for some typical companies. For every corporation listed, the benefit rate is taken time the salary for each year of service. However, PSERS has a tremendous additional advantage since it uses the highest salary in the formula. That is, a teachers highest salary is about 3 times their average salary, leading to pension three times the private sector even if the benefit rate were the same.

Consider that for every corporation listed, the benefit rate is taken time the salary for each year of service. However, PSERS has a tremendous additional advantage since it uses the highest salary in the during employment instead of each years salary, or an average salary, in the formula. That is, a teachers highest salary is about 3 times their average salary, leading to pension three times the private sector even if the benefit rate were the same. This difference is evident in another comparison showing the number of years needed to work to get the same pension as a typical private sector employee.

Another measure of the value of PSERS related to someone who has no pension, and how much money a person would need to save annually to get the same pension as PSERS. Using an annuity calculation: Savings of about $40,000 annually would be required to obtain a similar income in retirement from a savings account. That exceeds 401K contribution or IRA contribution limits, and would require savings beyond those levels for a person working in the private sector.