1917 The Pennsylvania Public School Employees’ Retirement Act became law on July 18.
1918 Henry H. Baish became the System’s first Secretary. The first Board was comprised of seven members.
1919 The law went into full effect July 1 with the merger of 13 school district retirement systems into the new statewide System. Membership was 37,503.
1920 By July, 204 members had been granted full retirement and 50 had been granted disabilities. The average annuity was $275 a year.
1920 to 1923 The Institute for Government Research called PSERS one of the nation’s "safe and sound systems." (Ninety percent of the country’s systems were found to be unsafe.)
1924 PSERS membership had grown to 54,677. The balance in the retirement fund was $7.3 million. 1929 Membership totaled 71,313. Funds were invested exclusively in Pennsylvania state, county, city, borough, and township bonds with preference for school district bonds. The System was not threatened by the "Crash."
1933 Membership had grown to 74,698. U.S. government bonds were added to the list of legal investments.
1935 At the height of the depression, the year’s annual report noted that through PSERS’ bond investments, jobs had been created building schools and roads in Pennsylvania.
1941 to 1942 Even with nationwide conscription to fight a war on two fronts, PSERS membership grew from 82,956 to 83, 482.
1944 The System’s first Secretary, Mr. Baish, left after 25 years. He was succeeded by J. Y. Shambach.
1950 Mr. Shambach was replaced by Dr. George C. Richwine who served as acting Secretary until 1953. At mid-century, membership was 91,000, with assets of $576.7 million.
1953 Rex T. Wrye was appointed as Secretary.
1963 The minimum benefit paid to retirees became $100 a month.
1967 The first ad hoc cost-of-living adjustment was granted; subsequent adjustments were granted in 1974, 1979, 1984, and 1989.
1970 Mr. Wrye died and was succeeded by Frank R. Cashman as executive director. Annuitants totaled 32,140 with an annual payroll of $104 million. The basic benefit formula increased to 2 percent of final average salary. The system’s computerization began.
1972 The first report was presented by the actuary hired for the examination of the actuarial soundness of the Fund.
1973 A field staff was formed with offices around the state to counsel members and to instruct reporting units. 1974 Final average salary was redefined as average compensation in the highest three periods of 12 consecutive months.
1975 Act 96, a new Retirement Code, was enacted with a profound effect on the System:
- PSERB became an "independent administrative Board."
- Board membership increased.
- The System’s authority to invest in common stock was liberalized.
- The lump-sum withdrawal of accumulated deductions at retirement was permitted.
- Part-time employees were made eligible for PSERS membership.
- Withdrawal (early) retirement eligibility was lowered from 25 to 10 years.
- Eligibility for full death benefit was reduced from 25 to 10 years.
- Eligibility for disability was lowered from 10 years to 5 years.
1976 PSERS moved into City Towers, combining an operation that was scattered in three different locations in Harrisburg.
1977 Assistant Executive Director M. Andrew Sheffler succeeded Mr. Cashman as Executive Director.
1979 The System’s first "outside" audit occurred.
1980 The Board joined George Washington University in financing an office building/retail right in the District of Columbia. A security system was installed at the headquarters building.
1982 The Fund could invest up to 50 percent of its total assets at book value in common stock. Various investment advisors were hired, the Board as nonvoting members, bringing membership to 15. The number of days an annuitant could return to work without loss of annuity was changed from 60 to 75 days.
The Tax Equity and Fiscal Responsibility Act had significant impact on the taxation of benefits and also required changes to automated systems.
The first of several retirement "windows" was enacted.
1983 The member contribution rate was raised from 5.25 percent of payroll to 6.25 percent for new members. Member contributions were "picked up" by the employer for federal tax purposes. The System received its first annual prestigious Certificate of Achievement for Excellence in Financial Reporting. The Board adopted sex-neutral actuarial tables as a result of a U.S. Supreme Court Ruling "Norris v. State of Arizona." Disaster recovery planning began.
1984 James A. Perry became the sixth Executive Director of PSERS. The System began to buy microcomputers for the staff. The Fund was enabled to invest in limited partnerships and separate accounts as well as venture capital. Act 95 provided for a one-year window for members 53 years old or older with 30 years of credited service to retire with no penalty. It also provided a cost-of-living increase for all annuitants.
1985 A mission statement and strategic plan were adopted by the Board. Electronic transfer of benefits to financial institutions began. The Commonwealth made its final payment on a $90 million debt owed PSERS for the Commonwealth portion of the contribution for fiscal years ended June 30, 1970, 1971, 1972, and 1973. (No interest was paid.) Retiring or refunding members were given the option to withdraw their contribution and interest in up to four installments. Legislation enabled the Board to deduct for child and spousal support.
1985 After many years of steady increases, the System’s unfunded accrued liability was decreased.
1986 The Board adopted a resolution on divestment of assets in companies doing business in South Africa. Mandatory retirement counseling was enacted. The conversion of all retirement records to microfiche was begun, and the correspondence unit was established to answer mail and telephone calls more efficiently. The employer contribution was reduced for the first time in 23 years. An automated general ledger system was installed to provide PSERS with more timely financial information and to reduce the level of manual account postings required. Retirement windows were enacted to allow for early retirement without penalties.
1986 A provision in the U.S. Tax Reform Act eliminating the "three-year rule" for taxation of retirement benefits had a negative impact on the System’s members and automated processes.
1987 The System moved into a new headquarters building at 5 North Fifth Street, Harrisburg.
1988 The technical corrections bill amending the U.S. Tax Reform Act was passed. This provided tax relief for members of the System on pre- 1983 member contribution withdrawals.
1989 Act 112 provided a cost-of-living increase starting January 1, 1989 for all annuitants who retired on or before July 1, 1987. Assets topped $14 billion making PSERS the 14th largest public pension fund nationwide, with investment income of $1 billion for the year. Active membership was 195,000. Retirees numbered 96,000.
1990 The 100,000th annuitant was added to the payroll. Internal investments marked its beginning with expansion of the investment division.
1991 Assets reached $19.1 billion with an investment income for the year of $1.2 billion. Retirees numbered 103,000, and active members numbered 202,000.
Act 23 was passed which brought about:
- Change in funding period lowering the contribution rate
- Credit for activated military leave
- Credit for forced maternity leave
- Credit for Cadet Nurse Corps service
- Number of days a retiree may return to school service without loss of benefit increased from 75 to 95 days
- Premium assistance for health insurance
- Group health insurance plan expansion to include pre-Medicare retirees
- Legislators became voting members of the Board
- Certain staff salaries set by the Board
- Expanded investment authority
1992 Act 186, the Mellow Bill, provided a retirement incentive, 10% additional service for members 55 and older.
PSERS initiated internal trading operations. In addition, the Health Care Premium Assistance Program began. For the 10th consecutive year, PSERS received the Government Financial Officers Association award for excellence in financial reporting.
1993 Assets reached $22.7 billion with a total revenue of $3.5 billion. The employer contribution rate was reduced to 13.17 percent of payroll. A health insurance administrator began to implement the provisions of Act 23 of 1991 which allowed about 34,000 retirees up to $55 a month insurance premium assistance. The number of retirees increased to 113,000. Most new retirees took advantage of the "Mellow Bill" incentives. A new publication went to all retirees, called the PSERS Retired Member Handbook.
1994 Assets reached $25 billion. More than $1 billion was paid out in benefits. The System celebrated its 75th anniversary with a Diamond Jubilee program at the Forum. For the 11th consecutive year, the PSERS Component Unit Financial Report received the prestigious Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association of the United States and Canada. The System was also one of 13 recipients of the Public Pension Principles 1993 Achievement Award from the Public Pension Coordinating Council.
Act 29 of 1994 provisions:
- The PSERS Board of Trustees was given increased authority to invest the Fund as "prudent persons."
- Granted a cost-of-living adjustment for most retirees.
- Extended the "30 and out" window until July 1, 1997, retroactive to July 1, 1993. Extended the "Mellow Bill" incentives to include those who terminated service between May 15, 1992 and July 1, 1992 previous dates were limited to July l, 1992 until August 31, 1993).
- Allowed eligible members to elect to eliminate the "frozen annuity."
- Allowed members over normal retirement age to apply for a disability benefit.
- Instituted employer contributions ratio changes.
- Granted premium assistance to members who terminated employment on or after their 62nd birthday with at least 15 years of service.
1995 Assets reached $30 billion as the staff prepared for an agency-wide conversion to the PSERS Business System, known as PBS, a sweeping new process for serving the membership.
1996 PSERS headquarters building was still in recovery from an October 1995 crane accident that damaged the top floor of the building. No one was injured but all fifth floor employees were relocated to other floors for most of 1996.
1997 The new PSERS Business System (PBS) continued to be a priority as a service to our membership. A new reception area was created on the ground floor. Assets fell just shy of $40 billion; active members numbered 210,000, and retirees numbered 119,000.
1998 Act 41 was signed into law on April 2, 1998, providing a 30 & Out retirement window for school employees. The act provides school employees with two distinct 30 & Out windows - the first from April 2, 1998 through July 10, 1998, and the second from April 1, 1999 through June 30, 1999.
Act 88 was signed into law in June 1998 providing the following:
- one year opportunity for the purchase of certain maternity leaves
- cost-of-living adjustments for retirees who retired before July 1, 1997
- PSERS Board of Trustees with the flexibility to waive benefit adjustments in cases of hardship
Regulation 43-6 provides members who are retiring, a limited opportunity to change the terms of their retirement plan.
PSERS began initial construction and launch of the PSERS Internet website.
PSERS implemented toll-free telephone service and extended Member Service Center hours.
PSERS successfully renovated all mission critical application systems to meet with the Year 2000 compliancy regulations.
1999 Dale Everhart was selected as the new Director of PSERS and began work with the agency in January.
PSERS developed a new way to pay for the cost of purchasing additional service. Members may now place a debt against their retirement account to pay for the service upon retirement.
The introduction of the PSERS Internet website in August 1998 allowed for communication with members using the Internet via e-mail with a total of 613 inquiries received and 596 responses sent. During the early months of the website, PSERS received an average of 2,000 visits per month; as of July 1999 the website was visited on the average of 20,000 times per month with each visit lasting approximately 10-15 minutes.
An eighth Regional field office opened in early June in Johnstown, PA, to better serve our membership in Bedford, Blair, Cambria, Indiana, Somerset and Westmoreland Counties.
In keeping with the Commonwealth directives on this issue, preparing the Agency for the Year 2000 change over was one of the Agency's top priorities for this fiscal year. In preparation for the Year 2000, PSERS tested all computer systems and made contingency plans for both mainframe and personal computer hardware and software programs, backed-up all critical member records, and arranged for the early payment of the December 31, 1999 benefit payments and planned an early year-end accounting closing. Finally, PSERS developed contingency plans to cover all aspects of the Agency's operations.
2000 The Wilkes-Barre Regional Office relocated to downtown Wilkes-Barre in late February and the Williamsport Regional Office relocated to Lock Haven in early June. These moves enabled both offices to better serve the membership within their respective regions.
PSERS contracted with an independent auditing firm to examine the design and operating effectiveness of PSERS' internal financial controls. The auditor stated that PSERS has an effective system of internal control and is in accordance with the Statements on Standards for Attestation Engagements No. 2.
The Executive Office completed the Membership Survey Project. PSERS surveyed recently retired members, retirees, and active members to measure their satisfaction with PSERS services and future needs for services. This information was used during the planning process to guide agency direction.
2001 On May 17, 2001, Governor Ridge signed Act 9 of 2001 into law. Among the provisions of this act affecting active members were:
- A new Class T-D membership providing a multiplier of 2.5% in the basic benefit formula
- Vesting requirement reduced from 10 years to 5 years
- Multiple Service election window re-opened and expanded
Among the provisions of this act affecting retired members were:
- Increase in Premium Assistance from $55.00/month to $100.00/month
- Between July 1, 2001, and December 2001, retired members who return to service under the emergency provision of the Retirement Code were not subject to the 95-day limitation
- Current retirees who return to active service will automatically be enrolled in Class T-D and must earn three subsequent years of service to have all prior service converted to the new class using the higher benefit formula
Six interactive web applications became available on the PSERS Internet website.
- Active members can print duplicate Statements of Account and produce a general retirement estimate on-line
- Retired members can reprint 1099-R tax forms and access Income Verification information on-line
- Employers may enroll new employees and update their contact staff for reporting, accounting, publications, etc., on-line
The Brookville Regional Office relocated to Franklin in April 2001. This move enabled the office to better serve the membership in northwestern Pennsylvania.
The PSERS Business Plan was established to improve member and stakeholder services and to improve the management of assets.
2002 On April 23, 2002, Governor Schweiker signed Act 38 of 2002 into law. Provisions of this act include:
- A two-part cost-of-living adjustment (COLA) beginning July 1, 2002. Members were entitled to the COLA according to a specific schedule, the amount of which is payable upon the attainment of normal retirement age or superannuation. The first part of the COLA was payable to eligible annuitants who retired prior to July 2, 1990, and the second part of the COLA was payable to those eligible annuitants who retired on or after July 2, 1990.
- A change in the valuation methodology of smoothing PSERS asset gains and losses from three years to five years. This enabled the employer contribution rate to be decreased from the original 5.64% of payroll to 1.15% for the 2002-2003 school year.
The new Active Member Handbook, revised to include the provisions of Act 9 of 2001, was mailed to all active members in June 2002.
Employers can update members home addresses on-line.
PSERS begins the development and implementation of a new fully integrated computer system for the administration of pension information. In 2002, the New Pension Administration System (NPAS) was in the design phase and a team of PSERS staff was assigned to assist the agency in making this important and ongoing need a reality. The project timeframe spans approximately 3 years from initial design to total implementation.
Governor Schweiker passed Act 2002-234 (commonly referred to as the Coaches Bill) on December 30, 2002. This law allows school districts, intermediate units, area vocational schools, and charter schools to hire retirees for extracurricular activity positions without affecting their monthly benefit. For detailed information, check out Act 2002-234 on the website.
In keeping with the Commonwealth directives on this issue, preparing the Agency for the Year 2000 change was a success. There were no interruptions in work or in service to the members. The early payment of the December 31, 1999 benefit check occurred successfully to avoid any disruption in cash flow to the members that may have occurred if Y2K problems had arisen.
2003 For the 20th consecutive year, the Government Finance Officers Association of the United States and Canada awarded PSERS Comprehensive Annual Financial Report the prestigious Certificate of Achievement for Excellence in Financial Reporting.
PSERS implemented the 2nd phase of Act 2002-38 COLA for those who retired on or after July 2, 1990, but before July 2, 2002. The COLA did not include those whose retirement benefits include Membership Class T-D Service.
New Retiree Informational Meetings began during the summer. These hour-long meetings provided an overview of significant PSERS issues of special interest to retirees.
Executive Director, Dale Everhart, retired in June, and Mr. Jeffrey B. Clay acted as interim Executive Director. The PSERS Board of Trustees announced Mr. Clay as the new Executive Director at its October 31, 2003, board meeting.
On December 2, 2003, the Pennsylvania Supreme Court heard the PSERS and the PA School Boards Association case to purchase non-qualifying part-time service.
On December 31, 2003, the window created by Act 2001-9 closed. This law expanded the timeframe to elect Multiple Service membership from 30 days of employment to 365 days of employment. It also allowed employees who did not elect within their 30 day timeframe to elect Multiple Service membership by December 31, 2003.
PSERS web applications saw a significant increase in web use. Over 40,000 visited our applications on the Inter@ct website with sessions averaging just over 10 minutes in length. We also saw an increase in the use of email from both members and employers with over 14,000 messages received and 400,000 visitor sessions to the general PSERS website.
2004 In July, PSERS implemented Phase 1 of its New Pension Administration System (NPAS) that uses personal computer (PC) technology, rather than the current mainframe computer technology. PSERS provided staff, employers, and their vendors training on this new system. The new system provides for more timely and accurate information. The reporting requirements changed from a quarterly reporting system via various forms of media to a monthly reporting system using the web.
The Employer Reference Manual was completely revised and divided into two major sections to accommodate the changes in the method of reporting and to separate the employer reporting information from the member benefit information.
2005 After successful implementation of the first release on time and under budget, NPAS continued throughout the year with the design, development, and testing of subsequent phases. The System continued its multi-year project to implement an independent accounting book of record for the System's investment transactions and holdings. PSERS entered into an Employer/Union Direct Medicare Prescription Drug Plan Contract with the Centers for Medicare and Medicaid Services in order to provide prescription drug benefits to Medicare-eligible HOP participants.
2006 PSERS successfully implemented the Medicare Prescription Drug Benefit program; it was the largest such program in the country. In January, the benefit payment processing functions of NPAS were implemented followed by the POS function in April. Efforts continued to develop and test the remaining core benefit processing functions. The agency underwent a performance audit and fiduciary review of its investment program and operations by the Auditor General and Independent Fiduciary Services, Inc. Market value of the fund exceeded $60 billion.
2007 PSERS assets increased to a record high of $67.5 billion. The investment performance for the calendar year-end placed PSERS in the top 1 percent of the public pension plan database compiled by Wilshire Associates. The System also established policies and procedures for the review and verification of all payments made to PSERS. Preparation was made for the final implementation of NPAS.
2008 Implementation of the final phase of NPAS was initiated in March 2008. This final phase incorporated all processes of the system ranging from retirements to death benefits and refunds. While PSERS diversified investment portfolio helped it to weather the global economic turmoil better than many of its peer organizations, to date the system has still temporarily incurred a reduction in the overall value of the fund.
2010 The Fund earned 14.59% and increased assets from $43.2 to $45.8 billion for the fiscal year. While the investment markets began to recover, the long-term underfunding of the System continued.
Historic pension reform legislation (Act 120 of 2010) was signed into law. This legislation included a series of actuarial and funding changes to PSERS and significant benefit reductions for individuals who became new members of PSERS on or after July 1, 2011. Act 120 addressed the pending employer contribution rate spike projected for FY 2013 by putting a long-term plan in place to pay off existing pension liabilities and reduced the employer normal cost to nearly 3.00% for new members hired on or after July 1, 2011. The number of membership classes increased to four: Class T-C, Class T-D, Class T-E and Class T-F.
2009 The “Great Recession” occurred and impacted investment markets worldwide. As a result, PSERS’ assets decreased from $62.7 to $43.2 billion during one of the most challenging fiscal years in the history of the pension fund. The historic worldwide economic decline was rivaled only by the Great Depression of the 1930s. PSERS maintained its position among the top 25 largest pension systems (public and corporate) in the nation. The PSERS’ logo was officially trademarked.
2011 PSERS began to phase in the implementation of Act 120 of 2010. As of December 2011, 18% of new members elected class T-F while 82% of new members remained in class T-E.
PSERS also continued efforts to increase efficiency in the System’s operations. During 2011 PSERS saw an increase of approximately 34% in retirements processed (13,206 in 2011 and 9,863 in 2010) and 84% of the retirement applications processed were finalized in a one-step. Historically PSERS had paid retirement benefits in two steps – a reduced initial benefit within about 10 weeks of retirement and then a final benefit with retroactive monies in about 18 months. The one-step benefits are being paid in an average of less than four weeks.
For fiscal year 2011 PSERS’ investment portfolio generated a rate of return of 20.37% which resulted in $9.2 billion of net investment income.
PSERS was named the “2011 Large Public Plan of the Year” during the annual Hedge Fund Industry Awards.
2012 – The PSERS Southcentral Regional Office relocated to the PSERS Headquarters in Harrisburg from its previous location in Mechanicsburg. This move enabled the office to better serve the membership in southcentral Pennsylvania while providing long-term economic savings.
PSERS continued to implement the many facets of Act 120 of 2010. While Act 120 provided historic pension reform and made dramatic progress toward addressing funding issues at PSERS, difficult budget issues remained for both the Commonwealth and school employers. Discussions about additional pension reform continued.
PSERS enhanced customer service by formalizing a process to review member accounts at periodic milestones and event triggers in order to ensure each detail of a member’s account is accurately portrayed prior to the member applying for retirement.
The Governmental Accounting Standards Board (GASB) approved a pair of related Statements that made substantial changes to the accounting and financial reporting of pensions by state and local governments and pension plans.
Statement No. 67 significantly changed related financial reporting through note disclosures and new required supplementary information (RSI) schedules for public employee pension plans such as PSERS.
Statement No. 68 required cost-sharing governments (employers) to report a net pension liability, pension expense, and pension-related deferred inflows and outflows of resources based on their proportionate share of the collective amounts for all the employers in the plan. Additionally, all government employers participating in the plan are required to include plan information in their note disclosures and RSI schedules.
2013 - Implementation of Acts 32 and 33 of 2013: Legislation was passed on July 1, 2013, that impacts active members who are on a military leave that began on or after July 1, 2013. The legislation primarily changed the rules regarding service credit and eligibility points earned during the military leave, purchasing this service upon return to school employment, what occurs in the event of a member’s death or disability while on a new military leave, and the employer’s role in the aforementioned activities.
PSERS continued its efforts to provide retirement benefits in a timely fashion through a one-step process. The number of benefits processed in one step increased from 74% in FY 2012 to 88% in FY 2013. This increase was achieved largely in part due to the 2012 change in PSERS’ process to review member accounts at periodic milestones and event triggers to ensure each detail of a member’s account is accurately portrayed prior to the member applying for retirement.
Implementation of the actuarial, funding, and benefit changes in Act 120 of 2010 continued throughout the year.
The multi-year technology refresh effort to upgrade PSERS’ entire core client-server based pension administrative system began. This refresh from the existing “classic” version to a new “browser-based” version not only will help ensure the viability of PSERS’ core pension administration system into the future, it will provide an enhanced baseline platform with built-in features that will make future business process and member self-service enhancements much easier to implement.
For the 30th consecutive year, the Government Finance Officers Association of the United States and Canada awarded the PSERS Comprehensive Annual Financial Report the prestigious Certificate of Achievement for Excellence in Financial Reporting.
The Public Pension Coordinating Council awarded its Public Pension Standards Award to PSERS for 2012. This award was in recognition of meeting professional standards for plan design and administration as set forth in the Public Pension Standards.
2014 - The funding issue remained the greatest challenge PSERS has faced in its history. Significant discussion on additional pension reform continued to take place.
PSERS adopted Statement No. 67 for the fiscal year ended June 30, 2014, which changed related financial reporting through note disclosures and new required supplementary information schedules for public employee pension plans. Beginning in 2013, PSERS reached out to its employers by speaking at various conferences held by the Pennsylvania Association of School Business Officials (PASBO), Pennsylvania School Boards Association (PSBA), and the Pennsylvania Institute of Certified Public Accountants (PICPA).
As of June 30, 2014, approximately 38,000 of PSERS’ active membership were under the new reduced benefit structure of Act 120. As the Act 120 membership grows, the annual savings from the lower Act 120 benefit cost structure will allow an increasing amount of employer contributions to pay down PSERS’ existing unfunded liability. An estimated $85 million is expected in cost savings during FY 2015 from the reduced Act 120 benefit tiers.
PSERS implemented the “shared risk” provisions of Act 120. With a shared risk program, Class T-E and Class T-F members share some of the risk when investments underperform. Because PSERS’ three-year return outperformed the investment performance hurdle mandated by Act 120, the member contribution rate did not change.
PSERS made enhancements to its call center operations and system, moving from a private branch exchange (PBX) based telephone system to a voice over internet protocol (VOIP) telephone system. This change enabled staff to answer thousands of more calls while also positioning PSERS to be able to implement additional enhancements in the future.
PSERS Health Options Program (HOP) reached the 20th year milestone. The Health Options Program became effective January 1, 1994, with plans underwritten by Capital Blue Cross and US Healthcare.
PSERS ranked 10th in private equity returns for large U.S. public pension funds in the Private Equity Growth Capital Council (PEGCC) annual pension study.
2015 - Executive Director, Jeffrey B. Clay, retired in March after 26 years of Commonwealth service and nearly 12 years as Executive Director of PSERS. The PSERS Board of Trustees named Mr. Glen R. Grell as the new Executive Director of PSERS effective May 1, 2015.
Act 120 of 2010 continued to put PSERS on the path toward proper funding. Since 2010, Act 120 has slowly increased employer contributions to the System and has raised the annual required contribution (ARC) to a level closer to other states. The ARC percentage received fell to a low of 27% before Act 120 was enacted. In FY 2015, PSERS received 69% of the ARC and is projected to receive 80% of the ARC in FY 2016.
PSERS provided nearly $6.6 billion in pension and healthcare benefits to its members in FY 2015. Over 90% of benefits were distributed to Commonwealth residents.
PSERS continued to make enhancements to its processes to operate more efficiently and provide quality customer service. A major focus of this past year was the enhancement of death benefit processing. Much of this manually-intensive process became automated, resulting in greater efficiency and improved communications. Additionally, approximately 90% of the retirement benefits processed in FY 2015 were paid in one step. As a result, the average number of days to process a retirement benefit decreased from an average of 23.7 days down to 19.1 days.
PSERS won the award for Large Public Plan of the Year during the Institutional Investor Magazine’s Hedge Fund Industry Awards.
2016 - PSERS is now in the 6th year of a multi-year phase in of Act 120 of 2010. Act 120 made dramatic progress toward addressing funding issues at PSERS. The gradual employer rate increases under Act 120 have raised PSERS’ employer contributions to the 100% annual required contribution (ARC) goal, now referred to as the actuarially determined contribution (ADC), for the first time in 15 years. An ARC includes both the employer’s normal cost and the amount required to amortize the unfunded actuarial accrued liability (UAAL).
PSERS’ Board certified an employer contribution rate of 32.57% for FY 2017-18 in compliance with Act 120. This is the second consecutive year PSERS’ contribution rate provides 100% of the actuarially required rate based on sound actuarial practices and principles and now exceeds the average ARC percentage of 95% for public funds based on the December 2016 Public Fund Survey prepared by NASRA.
2017- Retirement Code legislation was signed into law as Act 5 of 2017. This legislation included significant benefit changes to individuals who become new members of PSERS on or after July 1, 2019. Act 5 created two hybrid options (Class T-G and T-H) and one defined contribution plan (Class DC) option for new members to elect. Existing members who were active on July 1, 2019, had the option to elect one of the new classes if they chose. The membership classes increased to seven: Class T-C, Class T-D, Class T-E, Class T-F, Class T-G, Class T-H, and Class DC.
The PSERS regional office located in Fleetwood (just outside of Reading), PA permanently closed on June 30, 2017.
PSERS Board certified 33.43% as the Employer Contribution Rate for FY 2019, meeting the actuarially required rate for the third consecutive year.
2018 – PSERS successfully completed its pension administration system upgrade. This system is used by PSERS' professionals and employers to execute PSERS' primary pension administration functions for its members. Additionally, this upgrade allows members and employers to conduct transactions for themselves which would have previously required intervention by PSERS staff. Members can now receive correspondence from PSERS electronically.
PSERS Board certified 34.29% as the Employer Contribution Rate for FY 2020, meeting the actuarially required rate for the fourth consecutive year.
2019 –This year was not only PSERS' 100th anniversary, but also a year of new beginnings. PSERS introduced its new logo and slogan ("With PSERS, you're on your way!") as well as implemented PSERS Defined Contribution (DC) Plan. PSERS browser-based administration system continued to allow users to access their pension account online, anytime. PSERS also received approval to begin to use social media in 2019.
The Defined Contribution (DC) Plan was successfully implemented with the assistance of Voya Institutional Plan Services (VIPS), as the Third-Party Administrator for the DC plan, and Charles W. Cammack Associates, as the pension consultant. School employees who become new members of PSERS on or after July 1, 2019, can choose from three classes of membership: two consisting of defined benefit and defined contribution components and one that is a stand-alone defined contribution plan. As of June 2020, over 16,000 participants were enrolled in the DC plan. Additionally, current members who were active on July 1, 2019, had a one-time option to elect prospectively into one of the new membership classes; only 10 current members made such election.
Act 1 of 2019 passed and expanded the Public Employee Pension Forfeiture Act. The law mandates that all service and benefits payable to a PSERS member be forfeited if the member is found guilty of, or enters a plea of guilty or nolo contendere to, any crime identified in the Forfeiture Act, when the crime is committed through the member's position as a public employee or official or when the member's public employment places the member in a position to commit the crime(s). In 2019, the law was modified to include all Pennsylvania criminal offenses that are classified as felonies or punishable by a term of imprisonment exceeding five years are forfeitable offenses. Several misdemeanor crimes also are forfeitable offenses.
PSERS Member Self-Service (MSS) Portal reached nearly 150,000 members in December 2019. Those members completed over 163,000 transactions. Paperless delivery helped save over $500,000 in printing and mailing costs.
PSERS also launched its Twitter handle @PA_PSERS and continues to post content daily.
PSERS Board certified 34.77% as the Employer Contribution Rate for FY 2021, meeting the actuarially required rate for the fifth consecutive year.
2020 – Early emergency planning positioned PSERS to remain operational when the state and federal governments ordered large-scale closures in March amid the COVID-19 pandemic. PSERS moved from a 100% on-site presence to a 95+% teleworking presence within three weeks of mandated physical office closings. While office locations, including the member call center, were initially closed, PSERS continued to process daily and monthly benefit payrolls, invest assets, process retirements, respond to member inquiries through emails, and issue refunds, all while working remotely.
PSERS Retirement Exit Counseling (REC) sessions also needed to be migrated to remote technology during this time. PSERS quickly converted REC sessions for members who were retiring, from small in-person group meetings of 8 to 10 members to small group online counseling sessions. Additionally, PSERS provided recordings of the Foundations for Your Future presentation on its website.
The Board of Trustees board and committee meetings were conducted through a hybrid system of in-person attendees and virtual attendees who participated remotely. Public meetings were also streamed online.
PSERS Member Self-Service (MSS) Portal reached nearly 180,000 members in December 2020. Those members completed over 237,000 transactions. Paperless delivery also helped save over $250,000 annually in printing and mailing costs.
PSERS Board certified 34.94% as the Employer Contribution Rate for FY 2022, meeting the actuarially required rate for the sixth consecutive year
2021 - During FY 2021, the Fund earned a positive 24.58% which added $14.8 billion in net investment income. The investment portfolio, which is one part of the System's net position, totaled $72.2 billion, at fair value, as of June 30, 2021.
Since March 16, 2020, most PSERS employees have been working remotely from their homes, with limited visits to physical office locations. PSERS operations and processes quickly adjusted with staff working remotely with only brief interruptions to call center and walk-in, in-person assistance availability. In-person counseling sessions began again in September 2021, while participating in these via a webinar will also continue to be an available option.
PSERS public Board and committee meetings continued to be streamed remotely.
PSERS Prescription Drug Employer Group Waiver Plan received the Federal Centers for Medicare and Medicaid Services (CMS) highest rating, 5 Stars, for this year for use in 2022. PSERS PDP is among only nine other plans in the U.S. to receive this award of excellence. CMS' Medicare Star Rating program rates Medicare Advantage (MA) and Prescription Drug Programs (PDP) based on a number of metrics around quality and performance. Rating criteria is based on a 1- to 5- point system. The ratings help members select the best plans for themselves or their families. This marks the first time PSERS earned a 5 Star Rating in the 15-year history of offering a Medicare Part D program.
PSERS partnered with the Governor's Office of Administration, Office of Information Technology, Geospatial Services to create interactive, web-based maps that visualize PSERS benefit payments and membership by U.S. Congressional districts, PA State Senate districts, and PA State House districts.
In 2021, the System received subpoenas from various federal agencies regarding the certification of the shared risk member contribution rate in December 2020, as well as the purchase and valuation of certain directly held properties. PSERS cooperated fully with the federal investigations and the PSERS Board retained outside counsel to conduct an independent internal investigation of the shared risk calculation and the purchase and valuation of certain directly held properties.
PSERS Member Self-Service (MSS) Portal reached nearly 208,000 members in December 2021. Those members completed over 311,000 transactions. Paperless delivery also helped save over $250,000 annually in printing and mailing costs.
PSERS Board certified 35.26% as the Employer Contribution Rate for FY 2023, meeting the actuarially required rate for the seventh consecutive year.