Another method of deciding which plan is better for you is to project and compare retirement income from both plans. You may contact the State Board of Retirement for an illustration of your future benefits under the MSERS. The ORP providers can help you to project your initial income under the ORP.
Remember that you must use the same assumptions (e.g., future salary increases and years of participation) in both programs to ensure the most accurate comparison possible.
Equally important is the use of reasonable rates of future investment returns under any projections of ORP income. If your investment assumption is too high, it could significantly overstate the expected results; too low, and you understate your expected income.
Generally, defined benefit plans like MSERS tend to favor employees who are hired or who begin participation at relatively later ages (49 or older) and who remain employed with the Commonwealth for the balance of their careers.
Defined contribution plans, like the ORP, are generally more favorable to employees who enter the plan at young ages (regardless of whether or not they participate in the plan for an extended period of time) and/or do not stay with the same employer until retirement. This is because they have long periods of time during which the investment earnings in their accounts may compound.