Does participating in an optional retirement plan affect my PERA Highest Average Salary (HAS)?

No.  Unlike health and dental insurance, contributing to a 401(k), 457(b), or 403(b) is pre-tax, but not “pre-PERA,” meaning your PERA contribution and your Highest Average Salary is based on your wages BEFORE these retirement contributions.  Therefore, contributing to an optional retirement plan does not negatively impact your other PERA retirement benefit.

For instance, if you made $100 gross wages, and you had a $10 health insurance premium and a $20 401(k) payment deducted from your check, your wages reported to PERA that month would be $90.

Tip: If you’re getting closer to retirement, did you know that you can opt to have your health and dental insurance premiums taken out of your check AFTER tax in order to increase your HAS?  Ask HR about it!

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