Updated October 30, 2026. Quick answer: New Jersey PERS Tier 5 members, who were eligible to enroll on or after June 28, 2011, reach normal retirement age at 65. Tier 5 members with 30 years or more of pension membership service credit can retire before 65, with the allowance reduced 1/4 of one percent for each month (three percent per year) under age 65. Normal retirement age is 60 for Tiers 1 and 2 and 62 for Tiers 3 and 4. A member is vested after 10 years of service credit.
Which tier you are in
For Tier 5, the guidebook says: “Members eligible to enroll on or after June 28, 2011”.
Normal retirement age
“For Tier 1 and Tier 2 members, normal retirement age is 60. For Tier 3 and Tier 4 members it is age 62. For Tier 5 members it is age 65.” “Available to Tier 1 and Tier 2 members upon reaching age 60 or older; to Tier 3 and Tier 4 members upon reaching age 62 or older; and to Tier 5 members upon reaching age 65 or older.”
Vesting
“You are vested in the PERS after you have attained 10 years of service credit.”
Retiring before the normal age
“Available to members who have 25 years or more of pension service credit before reaching age 60 for Tier 1 and Tier 2 members, or before age 62 for Tier 3 and Tier 4 members;” For Tier 5: “with 30 years or more of pension membership service credit before age 65 for Tier 5 members.” For Tier 5 members who retire before age 65 with at least 30 years of service, the allowance is reduced “1/4 of one percent for each month (three percent per year) under age 65”.
What the pension is based on
The guidebook’s example: “Example: A Tier 4 member with 22 years of service would receive 22/60 or 36.7 percent of Final Average Salary.” This page reads the Tier 4 and Tier 5 formula as years of service divided by 60, times final average salary. For Tier 4 and Tier 5 members, final average salary is “the average salary for the 60 months (50 months for employees with 10-month contracts)”. “If your last five years are not your highest years of salary, your allowance will be calculated using your five highest fiscal years (July-June) of salary.”
A worked example with invented numbers
Take an invented Tier 5 member with 30 years of service credit who retires at 65. That is 30 years at 1/60, or 50% (computed) of a final average salary of $80,000 (invented, for the computation), which comes to $40,000 a year (computed).
Now take the same member retiring at 62 with 30 years of service credit. That is 30 years at 1/60, or 50% (computed) of a final average salary of $80,000 (invented, for the computation), which comes to $40,000 a year (computed). The reduction is 36 months under age 65 at 1/4 of one percent each, which is 9% (computed). The pension after the reduction is $36,400 a year (computed).
What the documents do not say
The guidebook says vesting takes 10 years and also says no minimum amount of pension service credit is required for a service retirement at the normal age. It does not reconcile the two, so confirm with PERS how they apply to you. The Tier 4 and Tier 5 formula is printed as a stacked fraction, and the 1/60 used in the example is read from it and from the Tier 4 example. Early retirement reductions for Tiers 1 through 4, law enforcement and the other addendum groups are not covered here.
Common mistakes
- Using age 60 or 62 for a Tier 5 member. Those are the normal retirement ages of Tiers 1 and 2 and of Tiers 3 and 4.
- Retiring early at 62 or 63 without the 30 years. For Tier 5 the early route needs 30 years or more of pension membership service credit.
- Forgetting the reduction. It runs 1/4 of one percent for every month under age 65.
Related: New Jersey PERS retirement decisions, the New Jersey PERS COLA for 2027, how public pension decisions work, and whether New Jersey taxes pensions.
Find the right next step for your situation
About how much do you have invested? Pick the range that fits; your next step appears immediately below.
Talk to an advisor about retirement income
For U.S. investors with $250,000 or more in investable assets. WiserAdvisor is an independent service matching you with 2 to 3 vetted advisers. Its form asks for your ZIP code and answers to a few questions; a match is not guaranteed.
Free to request, with no obligation to hire. By submitting, you consent to calls, texts and emails from WiserAdvisor and up to three advisers. Advisers pay for introductions.
Clear Money Guide may earn a referral payment for a qualifying completed form. An introduction is not a Clear Money Guide recommendation.
Opens on WiserAdvisor’s site in a new tab.
Explore advisor help with retirement income
Considering financial advice? Request an adviser introduction with no obligation to hire.
The form is run by Kapitalwise, our advisor-matching partner. Requesting an introduction is free. Submitting the form shares your contact details with advisers, so expect calls and texts. Advisers pay for introductions. Clear Money Guide may earn a referral payment for a qualifying submitted form, whether or not you hire anyone. A match is not guaranteed.
The Kapitalwise form opens here; you stay on this page.
What happens when you press the button
It asks about nine questions: age, investable assets, location; then your name, email and phone number, and verifies the phone by text. Nothing loads and nothing reaches Kapitalwise until you press the button.
Prefer flat-fee or hourly pricing instead? Compare ranges here.
Answer againSources
- NJ Division of Pensions and Benefits, Public Employees’ Retirement System (PERS) Member Guidebook: www.nj.gov
- Related official page (not quoted): IRS Tax Topic 410, Pensions and annuities: www.irs.gov
- Related official page (not quoted): IRS Tax Topic 411, Pensions: the General Rule and the Simplified Method: www.irs.gov
Read from the primary documents linked above on October 30, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer or the IRS itself is the right place to confirm anything consequential.