PERS Hybrid Retirement Plan - Tier 5

Mandatory for those who become members of PERS on or after March 1, 2026

Welcome to the Hybrid Retirement Plan

The Hybrid Retirement Plan, a governmental plan under Section 401(a) of the Internal Revenue Code, is available to those who become members of PERS on or after March 1, 2026. This hybrid plan consists of two components: a defined benefit plan and a defined contribution plan. A Hybrid Plan member who has met the retirement eligibility requirements for PERS will receive a retirement benefit that will consist of a calculated monthly payment from the defined benefit component and the accumulated balance in his or her defined contribution component.

Hybrid Retirement Plan Handbook

Click here to download the Hybrid Retirement Plan Handbook

This handbook provides detailed information about of your hybrid retirement plan.

Defined Contribution Component Information

Click here to view the Hybrid Plan Highlights

Click here to view the Hybrid Plan Document

Click here to log in to your Empower account

Frequently Asked Questions

What type of plan is Tier 5?

Tier 5 is a hybrid of a defined benefit (DB) pension and a defined contribution (DC) plan.

How does Tier 5 compare to Tier 4?

This overview gives a point-by-point comparison of the current Tier 4 and the new tier, Tier 5. Click here to view the comparison overview.

What date of hire is the entry date into Tier 5?

The new benefit provisions (Tier 5) only apply to PERS-covered employees hired March 1, 2026, and later.

What are the employee and employer contribution rates for Tier 5?

The employee contribution rate is 9 percent with 4 percent going into the defined benefit portion of the plan and 5 percent going into defined contribution portion of the plan.

The employer contribution rate is 18.40 percent to PERS.

What is the vesting requirement for Tier 5?

Vesting for the defined contribution portion of the plan is immediate upon entry.

Vesting for the defined benefit portion of the plan is eight years.

Does Tier 5 offer a cost-of-living adjustment (COLA)?

Tier 5 has no guaranteed COLA; however, the Legislature may provide an additional benefit for a specific year.

Does Tier 5 offer a partial-lump-sum option (PLSO)?

Tier 5 has no PLSO.

Does Tier 5 award credit for unused leave?

No service credit is awarded under Tier 5 for unused leave.

Does Tier 5 award credit for military service?

Tier 5 allows for up to four years of free creditable service for honorable military service; however, members may purchase additional military service credit under USERRA.

Does Tier 5 allow for early withdrawals?

Under Tier 5, the defined contribution portion of the plan allows for hardship withdrawals.

Does Tier 5 allow for purchase of service credit?

No service credit shall be purchased for out-of-state service, professional leave, or any other non-covered service under Tier 5.

Does Tier 5 provide for a refund payback?

No, individuals reentering the system on or after March 1, 2026, are ineligible to repurchase the withdrawn service credit.

How does the defined contribution (DC) portion of Tier 5 work?

The DC portion of Tier 5 is an individual 401(a) account funded by the member that grows based on investment performance. The member can choose how to invest from a range of professionally managed options. Empower serves as the third-party administrator of the DC portion and offers members the ability to view and manage their DC account online. Also, the balance of the DC portion is portable if the member changes jobs.

What happens if a member of Tier 5 leaves public service before retiring?

A member who leaves covered employment before vesting in the defined benefit (DB) portion of the plan may withdraw his or her own contributions but not the employer’s share.
A member who leaves covered employment after vesting in the DB portion of the plan will have a DB pension available when he or she reaches retirement age.
The member's defined contribution (DC) account stays with him or her whether working for a covered employer or not. The member may keep the DC account balance invested, roll it over, or withdraw it (subject to tax rules).

Will a person in Tier 5 still be able to receive payment at retirement for 30 days of accumulated personal leave as outlined in Section 25-3-93(4)?

Yes. The language of House Bill 1 providing that Tier 5 members do not receive service credit for unused leave (Section 25-11-109[2][d][iv]) does not affect the payment for 30 days of accumulated personal leave under Section 25-3-93(4).

Will a person in Tier 5 still receive a half day of leave awarded upon retirement for each full year of membership service under Section 25-11-109(e)?

Yes. The half day of leave awarded upon retirement for each full year of membership service under Section 25-11-109(e) is not included within the scope of "unused" leave, so they will receive that leave at retirement.