Retirement Plan Comparisons

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Penn State

Both SERS and TIAA-CREF have distinct features which may appeal to an individual faculty or staff member. The following chart compares SERS with TIAA-CREF on several major provisions.

BASIC PROVISION	SERS	TIAA-CREF
Type of annuity	Fixed only. Once your retirement amount is determined it will not change except by legislative action	Both fixed (TIAA ) and variable (CREF) are available. TIAA annuities remain fixed except for special dividends. CREF annuities vary depending on the performance of the stock account, bond fund or money market, global equities, growth account, equity index account, social choice, CREF Inflation-Linked Bond, and TIAA Real Estate
Contribution Rate	Maximum annual earnings considered for retirement plan contributions in 2008 is $230,000. Employees contribute: 6.25% of gross earnings. University contributions are determined annually by the State Retirement Board, as prescribed by state law.	Maximum annual earnings considered for retirement plan contributions in 2008 is $230,000. Employees contribute: 5% of gross earnings. University contributes 9.29% of gross earnings as prescribed by state law.
Income tax on employee contributions	Contributions are not subject to federal income tax. Contributions are considered taxable income when returned to the employee.	Contributions are not subject to federal income tax. Contributions are considered taxable income when returned to the employee.
Administrative Charges	None	None
Interest paid on contributions	4.00% annually	TIAA adjusted annually; 5.25 % in 2008.
Requirements to qualify for retirement income	Full retirement income at age 60 or with 35 years of service Reduced retirement income with 5 or more years service and under age 60	Retirement income may commence at any age. No minimum length of membership is required.
Amount of retirement income	Full retirement = 2.5% x number years service x average earnings for 3 highest years Reduced retirement = same as (a) above times actuarial age reduction factor.	Retirement income depends on age at retirement, the total member and University contributions, and the earnings experience of the TIAA-CREF fund.
Adjustments in retirement income	May be provided by legislation	TIAA annuities may be increased by dividends. CREF annuities are adjusted annually (may decrease).
Vesting rights	Five years of credited service, or age 60 or over with three or more years of credited service.	Available immediately
Disability benefit	Annuity payable after 5 years of service based on years of service, age, and earnings for highest 3 years.	No disability. Annuity payable immediately or at a later date as determined in section above (Amount of retirement income).
Death benefit to a beneficiary	Less than five years of service: member's contributions plus accumulated interest. More than five years of service: amount determined by formula.	Full current value of account based on employee and University contributions. A lump sum refund or various payment options are available.
Purchase of additional credit	The following credits may be purchased: service with any PA state agency, up to five years of military, up to ten years out-of-state teaching service.	A member may make additional contributions directly to TIAA-CREF at any time
Refund provision at termination	Refund of employee's contributions plus accumulated interest if member has fewer than five years of service.	Employee is entitled to the full value of the account. Restrictions apply to funds in a TIAA Traditional Annuity that exceed $2,000. All other amounts are cashable. Employees are not required to transfer funds at termination of their employment.
Portability or transferability	May be transferred if employed by a state agency participating in SERS.	Transferable if employed by another participating TIAA institution.