New Jersey PERS Retirement Calculator

Five tiers, two formulas

New Jersey changed PERS for new hires three times between 2007 and 2011, and each change created a tier. Your tier depends on the date you were eligible to enroll, and it sets your formula, your FAS window and the age at which the pension is unreduced. The rules below come from the PERS Member Guidebook (December 2025) published by the Division of Pensions and Benefits.

Tiers 1, 2 and 3 use years of service divided by 55, times a 3-year FAS (your last 36 months, or your three highest fiscal years if they're higher). Tiers 4 and 5 use years divided by 60, times a 5-year FAS. Service Retirement is unreduced at 60 for Tiers 1 and 2, at 62 for Tiers 3 and 4, and at 65 for Tier 5. No minimum service is needed once you reach that age. The 10-year rule you may have heard about is for vesting and Deferred Retirement.

Tiers 1-3: Annual Benefit = Years of Service / 55 x FAS (3-year)
Tiers 4-5: Annual Benefit = Years of Service / 60 x FAS (5-year)

The guidebook's own examples: a Tier 1 member with 22 years gets 22/55, or 40% of FAS. A Tier 4 member with 22 years gets 22/60, or 36.7%. With 30 years and an $80,000 FAS, a Tier 3 member gets $43,636 a year and a Tier 4 or Tier 5 member gets $40,000. That's $3,636 a year less for the same career.

Tiers 2 through 5 have one more limit. Pensionable salary stops at the Social Security wage base, $184,500 in 2026. Pay above it goes into the Defined Contribution Retirement Program, so it builds a 401(k)-style account, not a bigger pension. Tier 1 is capped only by the federal 401(a)(17) limit, $360,000 for 2026 (IRS Notice 2025-67). Tier 1 members who joined before July 1, 1996 may be grandfathered under a higher limit, $535,000 for 2026. The calculator applies the $360,000 cap.

Retiring early

You can retire before your tier's Service Retirement age, at any age, if you have 25 years of service (Tiers 1-4) or 30 years (Tier 5). The reduction is permanent and is figured by the month:

• Tier 1: no reduction from 55 to 60. Below 55, 1/4 of 1% per month (3% a year).
• Tier 2: 1/12 of 1% per month (1% a year) from 60 down to 55, then 3% a year below 55.
• Tiers 3 and 4: 1% a year from 62 down to 55, then 3% a year below 55.
• Tier 5: 3% a year for every year under 65.

A Tier 4 member leaving at 57 with 25 years loses 5%. At 53 the same member loses 13% (7% for the years from 55 to 62, plus 6% for the two years under 55). A Tier 5 member with 30 years who goes at 60 loses 15%. A Tier 1 member with 25 years can leave at 55 with no cut at all.

Leaving early without 25 (or 30) years is different. With at least 10 years you can file for a Deferred Retirement, and the unreduced pension starts after you reach your tier's Service Retirement age. With fewer than 10 years your only option is a refund of your contributions. The calculator handles all of these cases.

The suspended COLA

PERS retirees used to get an annual cost-of-living adjustment. Chapter 78, P.L. 2011, signed by Governor Christie and effective June 28, 2011, suspended it for every current and future retiree. COLAs already added before then stayed in the check. The law lets a pension committee consider bringing the COLA back once a system reaches its target funded ratio (80% of liabilities). That target is measured on the actuarial value of assets plus the special asset value (the present value of future Lottery Enterprise contributions). On that basis the July 1, 2025 actuarial valuation puts the State portion of PERS at 45.8% funded, so the State committee has never been formed. The Local portion reached its target in fiscal 2012 and has a committee.

Retirees sued. In Berg v. Christie, decided June 9, 2016, the New Jersey Supreme Court held that the statutes didn't give them an enforceable contract right to future COLAs.

Here's what that means in dollars. Someone who retired in August 2011 at $3,000 a month still gets $3,000. CPI-U rose from 226.5 in August 2011 to 335.0 in August 2026, about 48%, so that check now buys what roughly $2,030 bought in 2011. That's close to a third of its purchasing power gone. A 2% simple COLA over the same 15 years would have raised the check to $3,900.

Funding

The July 1, 2025 valuation shows PERS at 37.4% funded for the State portion and 71.3% for local employers, on an actuarial value basis. The average retiree or beneficiary on the rolls received $24,198 a year, about $2,016 a month.

For members who joined before P.L. 2010, c.1 took effect, N.J.S.A. 43:3C-9.5 makes the benefit program non-forfeitable after 5 years of service. The statute excludes people who became members after that date, and the Berg decision shows how narrowly courts read it. Base pensions already earned have not been cut. COLAs were.

PERS vs TPAF

If you're a public school teacher in New Jersey, you're most likely in TPAF (Teachers' Pension and Annuity Fund), not PERS. The TPAF guidebook uses the same tier dates, Service Retirement ages and 1/55 and 1/60 formulas. They're separate funds, though, with separate valuations. PERS covers state, county and municipal employees and many other public workers.

Purchasing service credit

PERS lets members buy service credit for some periods, including prior PERS or TPAF service you withdrew, certain military service and approved leaves. Ask the Division of Pensions and Benefits for a quote, since the cost depends on your age and salary when you buy.

Every month counts in the formula, and there's no cap on Tier 5 service. Two extra years for a Tier 5 member with a $75,000 FAS adds 2/60 x $75,000 = $2,500 a year. Buying service can also get you to the 25- or 30-year line for early retirement, which is often worth more than the formula bump.

Social Security and taxes

PERS positions are covered by Social Security, so you'll collect both. With the PERS COLA suspended, Social Security is the part of your income that keeps pace with prices.

New Jersey taxes PERS pensions. There's no exclusion just for public pensions. The general pension exclusion applies if you're 62 or older (or disabled) and your total income is $150,000 or less. It's full up to $100,000 of income, partial from $100,001 to $150,000, and gone above that.