ERS Plan Hire Date Plan Type
The Old Plan Before July 1, 1982 Defined Benefit Plan
The New Plan July 1, 1982 to Dec. 31, 2008 Defined Benefit Plan
GSEPS Jan. 1, 2009 to present Defined Benefit + Defined Contribution Plan
Addendum to last week’s column
The growth percentage of 41.4 percent for the portion of Tattnall County in the 4th Senatorial District is correct.
The balance of Tattnall County in the 19th District lost population, or –6 percent.
The total population for Tattnall County is 25, 20, a total growth rate of 14.4 percent.
Retirement systems in Georgia government—Part 1
There are two administrators of retirement benefits in Georgia, the Employees’ Retirement System of Georgia and the Teachers Retirement System. ERSGA administers benefits for 130,000 active employees and more than 52,000 retirees across seven retirement plans. Although the Teachers Retirement System only administers one retirement plan, it is the largest in the state with more than 222,000 active employees and 87,000 retirees.
Employees’ Retirement System
With nearly 69,000 active members from various participating state agencies, the largest of the seven plans administered by ERSGA is the Employees’ Retirement System (ERS). Members in the ERS plan are divided into three groups based on plan benefits: The Old Plan, The New Plan and the Georgia State Employees’ Pensions and Savings Plan (GSEPS). Plan membership is determined by the employee’s date of hire.
A defined benefit plan (commonly known as a pension) provides retirees with a monthly benefit based on their pre-retirement salary and years of services. A defined contribution plan provides benefits based on the amount the employee and employer contribute to the plan and any returns on that investment. Commonly known defined contribution plans are 401(k) and 457(b) plans. GSEPS combines the traditional pension plan of the defined benefit with a defined contribution 401(k) plan.
The 401(k) plan offers a minimum of 1 percent up to a maximum 3 percent employer match contribution. The normal retirement age for most ERS members is defined as age 60 with 10 years of service or the age of an employee on the date he or she attains 30 years of service. The annual benefits for retirees under the three ERS groups are determined using a calculation that multiplies the number of years of service times a benefit multiplier times the average pre-retirement salary. The employee contribution rate, which is set in Georgia Code, is about 1.25 percent.
In 2009, Georgia moved to the GSEPS plan to manage the growing cost of employer pension contributions and the reflection of a trend to more mobile retirement plans. The state was experiencing turnover of 21 percent among workers in their first five years of employment with the state.
The tradition of prior generations to stay their entire career with the same employer isn’t as prevalent today. The retirement systems needed to adapt to account for this shift. The GSEPS pension plan is attractive to new employees because it allows those who wish to make a career in state government similar benefits of the older defined benefit plans while allowing others the flexibility and portability of a 401(k).
Public School Employees Retirement System
The second largest plan administered by ERS is the Public School Employees’ Retirement System (PSERS). PSERS is comprised of public school employees who work mainly as bus drivers, food service, maintenance workers and paraprofessionals and are not members of the Teachers Retirement System. As of June 30, 2010, there were nearly 40,000 active PSERS members.
Like the Old and New Plans under ERS, PSERS is a defined benefit plan with the employer contribution rate set in the Appropriations Bill each fiscal year. This rate is based on actuary calculations. The PSERS contribution rate of $4, which is set in statute, is deducted from each month’s compensation. The normal retirement age for PSERS members is age 65 with a minimum of 10 years of service. There is no 30-year service retirement option for PSERS members. Retirees are paid a monthly benefit equaling the number of years of service times $14.75. Thus a retiree with 30 years of service receives a benefit of only $442.50 a month under present funding.
If you would like additional information here are some available informational Web sites:
PEW Center report on the growing gap in state pension funding
National Conference of State Legislatures Article on State Reform Efforts
Employees’ Retirement System
Public School Employees’ Retirement System
Teachers’ Retirement System
I may be reached at
234 State Capitol, Atlanta , GA 30334
(404) 656-5038 (phone)
(404) 657-7094 (fax)
E-mail at Jack.Hill@senate.ga.gov
Or call toll-free at
1-800-367-3334 day or night
Reidsville office: (912) 557-3811