The five choices
- Maximum Single Life Annuity
- Maximum monthly benefit for life. If at death you have not received an amount equal to your contributions and interest, the balance is paid to your beneficiary(ies). You may name more than one beneficiary and change them at any time. Retired Member Handbook (3/2014), p. 3; PSERS web page Retirement Benefit Options (fetched 2026-11-11); Exit Counseling 2025-26, PDF p. 18
- Option 1
- Monthly benefit is reduced and a Present Value is assigned to your account. If at death you have not received monthly benefits equal to the Present Value established at retirement, the balance is paid to your beneficiary(ies). Retired Member Handbook (3/2014), p. 3; PSERS web page Retirement Benefit Options; Exit Counseling 2025-26, PDF p. 19
- Option 2 (100% survivor)
- Reduced based on your age and the age of your survivor annuitant (the web page and exit counseling also say gender). At your death the same monthly benefit is paid to your survivor annuitant for life. Only one survivor annuitant. Special rules / federal restrictions may apply to a non-spouse survivor. Retired Member Handbook (3/2014), p. 3; PSERS web page Retirement Benefit Options; Exit Counseling 2025-26, PDF p. 21
- Option 3 (50% survivor)
- Reduced based on your age and your survivor annuitant's age (and gender). At your death, one-half of your monthly benefit is paid to your survivor annuitant for life. Retired Member Handbook (3/2014), p. 3; PSERS web page Retirement Benefit Options; Exit Counseling 2025-26, PDF p. 22
- Option 4 / Customized (Special) Option
- A monthly payment for life based on a plan of your own actuarially equivalent design, approved by PSERS; must provide a level monthly benefit (e.g., a survivor percentage such as 75%, or protecting two people). Retired Member Handbook (3/2014), p. 3; Exit Counseling 2025-26, PDF pp. 23-25
Options 1, 2, 3 and 4 reduce your check by factors that depend on your age and your survivor's age (and gender). PSERS doesn't publish them.
We show the Maximum Single Life Annuity as the upper limit. If you have a PSERS estimate, you can enter its factor.
Handbook p. 22, Monthly Benefit OptionsOne example: PSERS's sample retiree
Class T-D, retiring at 55 with 25 years under the 55/25 rule; her survivor is about two years older. These are her numbers only. Your factors depend on your ages.
| Option | Monthly | Share of maximum | If she withdraws $122,218 |
|---|---|---|---|
| Maximum Single Life Annuity | $2,951 | 100.0% | $2,370 |
| Option 1 | $2,866 | 97.1% | $2,301 |
| Option 2 (100% survivor) | $2,731 | 92.5% | $2,193 |
| Option 3 (50% survivor) | $2,836 | 96.1% | $2,278 |
| Customized option (75% survivor) | $2,782 | 94.3% | $2,235 |
From PSERS's sample estimate. "Share of maximum" is our arithmetic. Exit Counseling 2025-26, PDF pp. 8-23
Withdrawing your contributions and interest
At retirement you may withdraw all or part of your DB contributions and interest in a lump sum (the 'Option 4' lump sum in common usage; PSERS's application calls it Section 4, Withdrawal of Contributions and Interest). Your monthly benefit is permanently reduced; the more you withdraw, the larger the reduction. For classes T-E, T-F, T-G and T-H withdrawing everything can deplete the Present Value to zero, leaving no monthly benefit. Choices: all contributions and interest, a specific amount, or Pre-87 Investment in Contract (tax-free) only. Disability retirees may not withdraw. You cannot take the monthly benefit itself as a lump sum. Handbook p. 21, Withdrawing DB Contributions and Interest ('With a few exceptions'); Exit Counseling 2025-26, PDF pp. 14-16, 29-34; Retired Member Handbook (3/2014), p. 3, Partial Lump-Sum Withdrawal; Handbook p. 23, Disability Options The lump sum is taxed; see taxes on your PSERS pension.
PSERS doesn't publish how much withdrawing your contributions cuts your check. In its sample estimate, every option drops by the same share: the amount withdrawn divided by the account's Present Value.
We use that share only when you enter the Present Value from your own PSERS estimate.
Exit Counseling 2025-26, PDF pp. 18-23An older PSERS handbook (2014) and older summaries of the 2010 law suggest only Class T-C and T-D members can take out their contributions at retirement. PSERS's current exit counseling deck says any member may.
We follow the current deck: every DB class may withdraw, and for T-E to T-H it can leave little or no monthly benefit.
Exit Counseling 2025-26, PDF pp. 14-16More on the options
- Your choices are the Maximum Single Life Annuity, Option 1, Option 2, Option 3, and Option 4 (a customized option).Handbook p. 22, Monthly Benefit Options
- With Options 2, 3 or a customized option with a survivor, you can name a new survivor or change options only if your marital status changes or your survivor dies first. The benefit is recalculated and may go down.Handbook p. 22
- PSERS benefits carry no special spousal rights and need no spousal consent.Let's Talk About PSERS Death Benefits (Mar. 2025), p. 2
- A lump sum paid to you has 20% federal tax withheld, and a 10% early-distribution tax may apply if you are under 55 in the year you leave. Rolling it directly into an eligible plan avoids both at the time of transfer.Exit Counseling 2025-2026, PDF pp. 15-16
Under Options 2, 3 or 4 with a survivor annuitant, you may name a new survivor and/or elect a different option only if your marital status changes or your survivor annuitant dies before you; the benefit is recalculated and may be further reduced. If the survivor dies first and you do not elect a change, the benefit does not change. The option becomes irrevocable after your date of retirement. Handbook p. 22, Changing Your Option; Exit Counseling 2025-26, PDF pp. 24, 44-45
If you die after filing the application but before the effective date of retirement, PSERS presumes Option 1 with the beneficiaries/survivor named on the application. Exit Counseling 2025-26, PDF pp. 44, 47
For a sense of the death benefit: at $2,951 a month, her $122,218 of contributions and interest would be paid out in about 3 years 5 months under the maximum option. Under Option 1, her $620,779 Present Value lasts about 18 years 1 month. After that, nothing is left for beneficiaries. Exit Counseling 2025-26, PDF pp. 8-23
Questions
What are the PSERS payment options?
Maximum Single Life Annuity: Maximum monthly benefit for life. If at death you have not received an amount equal to your contributions and interest, the balance is paid to your beneficiary(ies). You may name more than one beneficiary and change them at any time. Option 1: Monthly benefit is reduced and a Present Value is assigned to your account. If at death you have not received monthly benefits equal to the Present Value established at retirement, the balance is paid to your beneficiary(ies). Option 2 (100% survivor): Reduced based on your age and the age of your survivor annuitant (the web page and exit counseling also say gender). At your death the same monthly benefit is paid to your survivor annuitant for life. Only one survivor annuitant. Special rules / federal restrictions may apply to a non-spouse survivor. Option 3 (50% survivor): Reduced based on your age and your survivor annuitant's age (and gender). At your death, one-half of your monthly benefit is paid to your survivor annuitant for life. Option 4 / Customized (Special) Option: A monthly payment for life based on a plan of your own actuarially equivalent design, approved by PSERS; must provide a level monthly benefit (e.g., a survivor percentage such as 75%, or protecting two people).
Can I take a lump sum from PSERS?
At retirement you may withdraw all or part of your DB contributions and interest in a lump sum (the 'Option 4' lump sum in common usage; PSERS's application calls it Section 4, Withdrawal of Contributions and Interest). Your monthly benefit is permanently reduced; the more you withdraw, the larger the reduction. For classes T-E, T-F, T-G and T-H withdrawing everything can deplete the Present Value to zero, leaving no monthly benefit. Choices: all contributions and interest, a specific amount, or Pre-87 Investment in Contract (tax-free) only. Disability retirees may not withdraw. You cannot take the monthly benefit itself as a lump sum.
How much does Option 2 or Option 3 cost?
PSERS doesn't publish the factors. They depend on your age and your survivor's. In PSERS's sample (retiring at 55, survivor about two years older), Option 2 paid $2,731 and Option 3 paid $2,836 against a $2,951 maximum.
Related: what each option leaves your family, in PSERS survivor benefits.
Source: PSERS Active Member Handbook, Current pa.gov edition (PDF revised Sept. 2023), pp. 21-23. Also: Retired Member Handbook (3/2014), p. 3. Also: PSERS web page Retirement Benefit Options. Also: Retirement Exit Counseling 2025-2026, PDF pp. 8-25, 44. Also: Let's Talk About PSERS Death Benefits (Mar. 2025), p. 2. Last reviewed .