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Getting Your First Annuity Payment


SERS encourages you to complete all of your retirement-related documents before your termination date arrives.  After you do, SERS and your agency still have more work to do before we can issue your first payment – work that can’t even begin until after your last day on the job.  As a result, you should expect it to take approximately six-eight weeks from your termination/retirement date until you receive your first payment.
  
  • For Commonwealth employees, your "after-the-fact" pay (if applicable) is normally paid two weeks after termination.
     
  • Overdrawn leave and/or agency debts will have a significant adverse impact on this time frame.
       
  • Your annuity payments will be made retroactive to your retirement date.
Normally, your first payment will be an amount representing all of the retirement annuity payments due you from the date of your retirement to the end of the month in which SERS makes payment.  If you elected to withdraw your Accumulated Deductions, your first payment will include the amount of your “Option 4 withdrawal."
 
Example:  An employee who has a termination date of July 20, 2007 normally can expect to receive his or her first annuity payment on approximately September 14.  Typically, that payment will cover all retirement annuities due from July 21 – the first day of retirement – through the last day of September.  Any non-taxable contributions withdrawn under Option 4 will also be included in the first payment. Additionally, the first payment will include any Option 4 withdrawal amount that is not directly transferred to a financial institution.  Any amount the employee chose to have directly transferred will be sent to the employee’s financial institution at the same time the annuity payment is made. 
 
Thereafter, the employee will begin receiving regular monthly annuity payments.  Regular annuity payments by checks are issued on the next-to-last working day of the month.  Regular annuity payments by direct deposits are electronically deposited into the designated accounts on the last working day of the month. 
 
  
Direct Deposit of Initial Payment
 
Employees with Payroll Processed in IES
Commonwealth employees whose active employment bi-weekly payroll is processed through Integrated Enterprise System (IES) can elect to have their initial payment from SERS deposited electronically into the financial institution where their active employee bi-weekly pay is deposited.  This includes any lump sum payment under option 4 that the employee elects to receive and any monthly annuity payments that are due.  However, it does NOT include tax-deferred rollover payments such as to an IRA or a 457 plan because these rollover transactions require separate authorizations.
 
To establish the electronic deposit of your initial payment, IES provides SERS with the information on the financial institution and account where your active employee bi-weekly pay is deposited.   SERS then prints that information on a Member's Validation:  Electronic Direct Deposit of Annuity Payments (SERS-123-A) form for you.  You must review that information for accuracy, and if correct, sign the form approving direct deposit of SERS payments to that account.
 
After SERS calculates and establishes your annuity, we will notify you that the payment will be sent within about 2-3 weeks.  SERS will then send an electronic transaction to your financial institution.
 
Your annuity payment will continue to be electronically deposited into your account until a change is made to your direct deposit, either by you or by your bank (i.e., changing banks or account numbers or due to a merger).
  
Other Employees
Retiring SERS members whose active employment payroll is NOT processed by Integrated Enterprise System (IES) and who elect Direct Deposit will have their initial payment (including any lump sum withdrawals and retroactive annuity payments) sent in paper check form to their home address of record.  SERS also will send an electronic test transaction to the member’s bank or other financial institution to ensure that the account direct deposit information is correct and future payments can be deposited successfully. Generally, it takes about 3 months for a new direct deposit to become effective. 
 
After your new direct deposit is effective, SERS will deposit all monthly annuity payments electronically to your financial institution; however, if the direct deposit electronic test transaction is not successful, SERS will continue to send you a paper check each month until a valid direct deposit is established.  If you continue to receive a paper check for more than 3 months after submitting a direct deposit form, please contact the SERS Disbursement Unit at 717-787-6293.
          
To avoid problems when changing direct deposit to a new financial institution, do not close your old bank account until you are sure your new direct deposit is in effect.
 
Direct deposit forms that SERS processes before the end of the first week of the month will be effective for the pay date at the end of that month.  Forms that SERS processes after the end of the first week of the month will become effective on the pay date at the end of the next month.
 
Even if you elect to have your annuity payments directly deposited, as a retired member, it is very important for you to keep your current home address on file with SERS.  If your address changes, inform SERS of the change in writing (including your Social Security number, the date you want SERS to begin using your new address and your signature). It is important that you notify SERS of any change in your address whether or not your annuity check is mailed to you or deposited directly into a bank or other financial institution. 
 
  
First Payment Timeline
Here’s an approximate timeline noting the major steps involved in getting you that first payment:
 
1.     Receive final payroll report from employer – generally two to four weeks after termination/retirement date.  
You will receive a final pay, typically two weeks after your termination date.  At about that same time (if you do not owe any money to your employer and you provided sufficient notification to your employer), your employer will provide your final payroll information to SERS.  If you do not return all Commonwealth property, have overdrawn leave, or other financial obligations to your employer, processing your retirement will take longer than two weeks.  SERS needs to know and verify your service and salary information to calculate the exact amount of your retirement annuity.  We cannot begin to calculate your actual retirement annuity until we receive the final payroll information from your employer.
 
2.       Calculate Annuity – Generally one to three weeks
 Armed with the information from your employer’s final payroll report, our records and the information you previously provided, a SERS retirement technician will calculate your exact annuity amount.  Depending on the SERS workload, it may take from one day to a few weeks before a technician performs your calculation. This calculation will be delayed if SERS requires additional information.  For example, if you are a multiple service member (combined service credit in both SERS and the Public School Employees’ Retirement System (PSERS)), SERS requires information from PSERS to process your total annuity.  Or, if there are questions concerning your service or salary, SERS will need to contact your employer for further information.  Also, if your retirement package is not complete with your Regional Counseling Center, we will need to contact you for the additional information.
  
3.       Confirm Annuity Calculation – Generally one week
As an accounting safeguard and to be sure members receive the full amount to which they are entitled, each annuity is independently calculated and verified by two separate retirement technicians.
 
4.       Audit of Annuity by Treasury Auditors – Generally within one week
 By law, before SERS can disburse any funds, auditors from the State Treasury must approve the payment. This process takes up to three days.  Only after receiving approval, can SERS send a requisition to request that the Treasury issue payment to you.  Payments are requisitioned on Tuesdays and Fridays of each week.
 
5.       Production of the Retirement Payment – One week
Once SERS requests the payment, the State Treasury requires seven days to create and issue the payment.  Payments that are requisitioned on Tuesday are mailed the following Tuesday, and payments requisitioned on Friday are mailed the following Friday.
 
6.       Postal Delivery – Up to One Week
It can take from a few days to a week (or in rare cases even more) for the check to reach you after the Treasury places it in the mail.